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Monsanto sells controversial cow hormone for $300M

Monsanto sells controversial cow hormone for $300M

Monsanto Co. is unloading a harvest of controversy with its $300 million sale of the Posilac cow hormone to drug maker Eli Lilly & Co.
Posilac has never been a big part of Monsanto's future growth plans, but the genetically engineered hormone has gotten outsized public attention because of concerns about its effect on human health.
The sale, announced Wednesday, means Monsanto's name won't be associated with a drug some activists call "one of the most hated products in the world."
"I think I would term this addition through subtraction for Monsanto," said Frank Mitsch, an analyst with BB&T Capital Markets in New York. "Did they really need to spend their time defending this product when it's not the reason people are buying their stock?"
Dropping the hot-button Posilac strengthens Monsanto's long-term strategy to focus on selling high-tech seeds to farmers worldwide. Monsanto was founded as chemical firm selling everything from aspirin to herbicide. Now its scientists focus almost exclusively on genetic seed research, and Monsanto plans to double its annual gross profit in four years by developing crops resistant to pests, herbicides and drought.
Monsanto's stock rose $5.22, or 4.6 percent, to $118.08 Wednesday, while Eli Lilly fell 39 cents to $47.41.
Posilac was a profitable and growing business within Monsanto, although the company doesn't break out annual revenue from the hormone, said spokeswoman Danielle Jany. She said Monsanto did not sell the Posilac division because of outsiders' criticism, but said losing the hormone will help the company's long-term bottom line.
"It allows Monsanto to focus on its core seeds and traits business," Jany said.
The Posilac brand will be absorbed into Eli Lilly's Elanco animal health unit. The Indianapolis-based pharmaceutical maker said it might make additional payments to Monsanto for Posilac, contingent on the results of the deal. Monsanto said the sale will be completed "as soon as practical."
Posilac is the brand name for a hormone called recombinant bovine somatotropin, or rBST. It increases milk production in cows, and Monsanto said it sold more than half a billion Posilac units since the product was approved in 1994.
Critics have attacked the drug as unhealthy additive for humans and cows alike. Organic food groups say Posilac injections increase infections in cows, and the hormone might remain in the milk consumed by humans. Some dairy farmers label their milk as "hormone free" in response to the criticism.
A Lilly spokesman did not return a call seeking comment. But the company seems prepared to defend its acquisition.
"Critically, we remain focused on the health and care of the cow in working with farmers to increase global milk supply," Elanco President Jeff Simmons said in a statement.
The Organic Consumers Association released a statement Wednesday suggesting it would continue opposing the use of Posilac, regardless of who owns it.
"Why would Eli Lilly want to pick up (Posilac)?" the statement said. "Because they are partners in crime with Monsanto and the biotech industry _ pushing largely untested and unlabeled genetically engineered products on an unwilling, but often gullible public."
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On the Net:
http://www.monsanto.com
http://www.lilly.com


Updated : 2021-07-24 13:59 GMT+08:00