Replies to post #47 on Monument Circle Acquisition Corp (MON)

[Democritus_of_Abdera]

Re: Refuge-in-a-Bag...

As I mentioned in #msg-43809790, Pioneer Hi-Bred’s Optimum AcreMax (Refuge-in-a Bag) could be a serious short-term headache for Monsanto if the EPA approves the requested 5% mix. On the other hand, approval as a 20% mix would be very favorable to Monsanto since SmartStax would not have a serious competitor with regard to refuge reduction.

Pioneer has indicated that they expected an EPA decision soon. So, I was keen to hear what DD said regarding this topic in their CC today. In fact, very little was said. The only reference to this product was in the Q&A:

<Jeff Zekauskas from JPMorgan> Hi. Good morning. I think DuPont’s been expecting some approvals on refuge reduction in corn in the United States for maybe six months that haven’t yet come through. Have you changed your attitude toward the probability of being granted the reduction? Or is there some change in your refuge reduction strategy going forward?

<Ellen J. Kullman, Chairman and Chief Executive Officer DD> There’s no change in our strategy going forward, Jeff. We expect, as you know, and I stated that I personally as I’ve analyzed it, remain confident that we will bring this into North America this season. The EPA has indicated support for refuge in a bag. Now what number they come out with, we’ll see. But I remain positively disposed, in terms of the way the discussions that we’ve been having with them. So while we’re not going to speculate on it, I remain confident in it.

[DewDiligence]

Re: Refuge in a Bag

At the end of February, Pioneer formally submitted papers to EPA for the industry’s first “in the bag” seed refuge system, Optimum AcreMax, to address corn rootworm protection… the Herculex rootworm trait is unique in how corn rootworm larvae react. Larvae nibble on roots with the Herculex CRW protection, but they don’t like the taste, so they leave the roots alone. Because the larvae don’t actually eat the treated roots, they’re unlikely to gain resistance, the main reason for refuge areas, [DuPont’s] Belzer said.

Still, Herculex CRW is the only anti-rootworm trait in AcreMax, which means that bugs need only to overcome one MoA to become resistant to the product.

In contrast, the rationale for the refuge reduction to 5%* for MON’s SmartStax is that there are multiple MoA’s against both above-ground and below-ground insects. Mathematically, having two or more MoA’s against a given insect is very much more effective than having only one. If, for the sake of discussion, we assume that an insect has a 1% probability of developing resistance to one MoA, then the probability of the insect developing resistance to two independent MoA’s is .01x.01=0.01%. This is one hundredth the probability of resistance to a single MoA, which makes the likelihood of a sustainable colony of resistant bugs very much smaller.

*Outside the cotton belt.