LEVERKUSEN, Germany -- Bayer AG has joined the race to develop genetically modified plants that yield higher amounts of active ingredients for foods and medicines, according to company research director Pol Bamelis.
He said the German chemicals-and-pharmaceuticals company plans to form joint research ventures with U.S. or European biotech companies to speed up its development process and help it compete with its more entrenched competitors, such as American agrochemical giant Monsanto Co.
Until now, Bayer had limited its genetic agrochemical research to investigating the way plants generate protective agents. The company was seeking genetic weaknesses in plants that could be offset by newly developed chemicals. Now, focused research into transgenetic plants is generally considered a more promising field. Food plants that generate more flavor or scent and medicinal plants that generate more active components can add value and lower costs.
Growing Research Budget
Mr. Bamelis declined to comment on Bayer's total investment in the new field. But German rival BASF AG has committed 700 million euros ($638.3 million) to plant biotech research over the next 10 years.
Mr. Bamelis stressed that the first goal was simply to develop the plants; only after that goal had been reached would marketing strategies be discussed. Bayer plans to announce its first research agreement for genetic technology in the next few months.
Bayer's total research budget will be bumped up 10% this year, to 2.4 billion euros, said Mr. Bamelis. The bulk of the bigger budget will go toward joint ventures with research-intensive partners in the health and materials development fields. The company has already invested more than 1 billion euros in joint-research ventures to date, with the aim of each joint project yielding two new medicines a year. One of the projects, with U.S. biotech firm Millennium Pharmaceuticals Inc., has yielded a potential cancer treatment slated to start clinical tests this year. Full development of the medication is at least five or six years away, Mr. Bamelis said.
He dismissed the view of some analysts that outside researchers would eventually take over all product development, leaving pharmaceutical companies as little more than marketing agents.
Growing Chances for Success Seen
"A solid pharmaceuticals operation that wants to survive and prosper needs to keep the key to research and development in its own hands," he said, adding that farming out 30% of a company's research would be a "healthy limit." Overall, 20% of Bayer's current research-and-development outlays go to outside companies.
"Biotech companies with big ambitions want increased cooperation with the pharmaceuticals companies," he said. "They want to participate in the market, but not in the marketing."
Mr. Bamelis disputed a report by Lehman Brothers that said research would become noticeably more expensive because the interaction of genes and proteins is more complicated than initially assumed. "I don't see the productivity of our pharmaceutical research sinking," he said. "The development of new medicines will remain expensive, but the chances of success will rise at the same time as more new windows for potential medicines are opened."