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Monday, December 20, 2010

Monsanto (NYSE:MON), Dow (NYSE:DOW) Get Competition from DuPont (NYSE:DD), Syngenta (NYSE:SYT) on SmartStax

DuPont (NYSE:DD) has licensed Syngenta's (NYSE:SYT) corn rootworm trait MIR604 in order to compete more effectively against Monsanto (NYSE:MON) and Dow Chemical (NYSE:DOW) and SmartStax.

Pioneer Hi-Bred, which is wholly-owned by DuPont, will market and sell the seed for them.

By combining Syngenta's corn rootworm trait MIR604 with Acremax XTRA, Dupont's Pioneer should be able to compete against SmartStax, as it would offer above ground and below ground action.

That should allow Pioneer to win regulatory approval for 5% integrated refuge product, which would provide the type of convenience that is offered by SmartStax.

Pioneer is working toward having the hybrids on the market for 2012-2013.

With it being vital for DuPont to have a product that can compete against SmartStax, they're going to have to pay a hefty price to get it via the licensing agreement with Syngenta, which says may end up being more than $400 million via cumulative payments.

Eventually Dupont may choose to use its own proprietary trait to replace MIR604, but that wouldn't happen for several years if they choose to go that route.

DuPont closed Friday at $49.86, up $0.41, or 0.83 percent. Dow closed at $33.94, down $0.40, or 1.16 percent. Monsanto closed at $64.60, gaining $1.60, or 2.54 percent. Syngenta closed at $56.99, down $0.39, or 0.68 percent.

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