Monsanto Co. said Thursday that it purchased genetic assets developed under a six-year agreement with biotech company Icoria Inc. for nearly $6.8 million in cash.

Monsanto paid nearly $4.8 million cash for assets developed under an agreement with Icoria to research agricultural transgenic traits, such as increased growth rates and stress resistance. Monsanto said many of the genes developed under the agreement have already moved into its research and development pipeline. The company will pay Icoria the remaining $2 million by January 2006.

Icoria expects a $15 million upswing from the transaction as it plans to focus more on its health care products pipeline for the diabetes, obesity and metabolic disorder markets.

Along with the cash payment, Icoria expects to save $5.2 million from reduced lease obligations as Monsanto takes over Icoria's research facility in Research Triangle Park, N.C.

Icoria also will save $4 million on lower general and administrative costs as about 60 employees, or a third of its work force, go to Monsanto. The company also expects about $3 million in net cash flow benefit from the amendment to the agreement that made the sale possible.

The companies expect the transition to be fully implemented by May 9.

Source: Yahoo News