Mumbai: Monsanto Co, the world's largest seed producer, is selling off all rights to its controversial synthetic milk-producing hormone – Posailac - to pharmaceutical company Eli Lilly & Co for $300 million.
The sale includes the `Posilac' brand name for recombinant bovine somatotropin or rBST, its global sales rights and a Georgia-based manufacturing plant of Monsanto.
Under the agreement, Lilly, in addition to the upfront payment of $300 million for the purchase of the Posilac brand and related businesses, will also pay a contingent consideration, details of which are not known yet.
Monsanto said its is exiting non-core business in order to focus attention on its core business of developing genetically modified seeds and pesticides.
Lilly has been distributing Posilac under an exclusive marketing agreement with Monsanto and hopes the deal to expand its veterinary health business. Lilly's animal health division, Elanco, headquartered in Greenfield, Indiana, is the seventh largest animal health company by global sales.
''We're pleased that Elanco is acquiring this business and will continue to provide dairy farmers with this important production tool," said Carl Casale, Monsanto's executive vice president of strategy and operations.
Posilac bovine somatotropin is an FDA-approved animal pharmaceutical used by US dairy farmers to increase productivity, Monsanto said in a release. The company claims to have sold more than half a billion units of Posilac over the past 14 years.
The sale comes amid growing global concerns over genetically modified products. Consumer resistance to the use of hormones in dairy products has forced a ban on such products in Canada and parts of the European Union.
Even US grocery chains like The Kroger Co, coffee-chain Starbucks and the country's largest milk processor Dean Foods Co have all rejected milk that contains rBST.
Monsanto is focusing on crop-agriculture product lines that include herbicidea, as well as modified corn and soybean seeds.
Indianapolis-based Lilly said Posilac would expand its line of animal health products, provide dairy farmers more options and give consumers affordable choices.
Elanco already makes a generic version of Posilac for international sale in a facility in Greenfield, Indiana, east of Indianapolis.