29 November 2001
DRUGS GIANT DROPS MONSANTO
...having obtained G D Searle, Pharmacia does not want to be saddled with a bioengineering company that is turning off investors.
Once an $8bn (£5.63bn) company, Monsanto was the most profitable life sciences corporation on the planet... But growing consumer resistance to GM foods, particularly in Europe, has shattered Monsanto's grand illusions.
Drugs giant drops GM subsidiary
Wednesday November 28, 2001
Pharmacia, the drugs giant, today announced plans to spin off Monsanto, its controversial bioengineering subsidiary, in the second half of 2002.
Pharmacia only completed its acquisition of Monsanto in March last year, largely to gain access to its drug unit G D Searle, which developed Celebrex, the best-selling arthritis drug.
Analysts say Monsanto's bioengineering business has dragged down Pharmacia's share price amid a growing backlash against genetically modified foods.
"These are two distinct businesses serving different markets and customers," said Pharmacia's chief executive, Fred Hassan.
He added that Pharmacia intends to focus on its core prescription drugs unit. The company currently owns about 85% of Monsanto.
Monsanto will face an uncertain future, having thrown in its lot with Pharmacia after coming under heavy pressure to split its drugs and agribusiness units or join forces with another company.
Allying itself with Pharmacia appeared to be the solution, but having obtained G D Searle, Pharmacia does not want to be saddled with a bioengineering company that is turning off investors.
Once an $8bn (£5.63bn) company, Monsanto was the most profitable life sciences corporation on the planet, with enough money to hire senior members of the former Clinton administration to smooth its way through Washington.
Monsanto thought its mastery of genetics would lead to new generations of crops, drugs, chemicals and industrial materials to suit the needs of the world's burgeoning population.
But growing consumer resistance to GM foods, particularly in Europe, has shattered Monsanto's grand illusions. A year ago, Monsanto publicly apologised for its arrogance.
Hendrik Verfaillie, Monsanto's chief executive, said then: "Even our friends told us we could be arrogant and insensitive. We were blinded by our enthusiasm. We missed the fact that this technology raises major issues for people - of ethics, of choice, of trust, even of democracy and globalisation."
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