1. Monsantos Biotech Pipeline August 31, 2004 Doug Rushing Director, Technology Development

2. Monsanto Has a Unique Set of Offerings Chemistry CustomerSolutionsTraitsSeeds Providing Innovation Upon Which Growers Depend 2 3. Technology DevelopmentTechnical arm for U.S. business Move technologies from research to the marketplace Lead commercial launch Provide technical support for all products Manage technical issues100 Technology Development Reps in the U.S. and Canada 3 4. Science Is Continuously Improving the Quantity and Quality of Food Production 10000 BC1900-1950 1980 20001800s1950-19802001 Fermentation & Mendels Pea,Antibiotics,GeneDNA, Human Genome, Leavening Pasteurization, Human Nutrition,Sequencing, Darwins Species,Plant Genome,Preservation, Biotech Crops,PasteursFortification,Animal Genome Crop Breeding Green Revolution Human InsulinMicrobesBuilding on centuries of science, biotechnology is acollection of tools used to improve and enhance plants,animals, and microorganisms for the benefit of society.4 * Photo credit: AAAS, ARS, Nature 5. Commitment to Safety is a Top PriorityLineSeed Variety Crop Gene Sales & ProductLineSeedVariety Crop Gene Sales & ProductSelectionProduction DevelopmentTransformation DiscoveryMarket ConceptSelectionProduction DevelopmentTransformation DiscoveryMarket ConceptTesting and Continuous QC SafetyComprehensiveselection of linesprotocols, auditsassessment ofregulatoryand varietiesand standards genes / proteinsreview EquivalenceQuality Choice of genesFood EquivalenceQuality Choice of genesFood Agronomics Purity Source of genesFeed Agronomics Purity Source of genesFeed Efficacy Performance EcologyEnvironment Efficacy Performance EcologyEnvironment Business Stewardship Biotech Stewardship Regulatory Stewardship Business Stewardship Biotech Stewardship Regulatory Stewardship Best Vector Practices SOPs for Regulatory Submissions Health and Environmental Best Vector Practices SOPs for Regulatory Submissions Health and Environmental Transformation BP USDA Field Trials Compliance Program Stewardship Council Transformation BP USDA Field Trials Compliance ProgramStewardship Council EAT Assessment NIH Laboratory Guidelines Institutional Biosafety Committee EAT Assessment NIH Laboratory Guidelines Institutional Biosafety Committee Gene Quality Control Good Laboratory Practices (GLP) Biotech Stewardship Workgroup Gene Quality Control Good Laboratory Practices (GLP) Biotech Stewardship Workgroup Environmental Criteria USDA/APHIS Field Test Audits Global Seed Quality Audit Team Environmental Criteria USDA/APHIS Field Test Audits Global Seed Quality Audit Team Metabolite Analysis EPA/FDA Inspections and Study Audits Crisis Management Team Metabolite Analysis EPA/FDA Inspections and Study Audits Crisis Management Team 5 6. Monsantos R&D Strategy Drives Innovation Platforms Markets Products Focus on corn,Balance near- Invest 10% of oilseeds, cotton, and long-term sales in R&D swine, dairygrowth pipeline Differentiate Feed & processCommercialize genomics, traits via JV high- margin breeding and traits and seeds biotechnology Downstream partnerships forStrengthen Drive proprietary food quality traits Animal Ag and position and Roundup speed to market Selectively apply technologies to specialty crops Technology strategy has delivered results and helped transition Monsanto to an Ag Biotech focused company 6 7. Global Expansion of Ag Biotech Traits Continues >10% annual growth since 1996 introduction Planted by 7 million growers in 18 countries in 2003 Impact on US Agriculture200 Current and potential products180 canola160 cotton 46 Million pounds AI / yrcorn140 Potential impact:soy M. Ac.120Pesticide reduction 117 M lbs100 4 Billion pounds harvested 80crops / yr 60 Potential impact: 40Yield an additional 10B lbs 20 +$1.5 Billion grower benefit / yr0 Potential impact: 2004(F) 1996 19971998 19992000 20012002 2003 Addl economic benefit of $1BSource: Gianessi et al., 2002. NCFAP (National Center ofFood and Agricultural Policy) Source: ISAAA (International Service for the Acquisition of Agri- 7Biotech Applications) & Monsanto estimates 8. Customer Satisfaction With Traits Is High Percent of Customers Very or Somewhat Satisfied 100% 80% 60% 40% 20% 0%Roundup RoundupYieldGard Roundup Bollgard/ ReadyReady Corn Corn BorerReady RoundupSoybeansCorn Cotton Ready CottonSource: Marketing Horizons Trait Satisfaction Studies (2002) 8 9. Monsanto R&D Investments Deliver ResultsUS Field Test ApplicationsUS Plant Biotech Patents5000 10004000800300060020004001000200 00F w atw atyer yer F nto ntoon on entS entDo DoS BA BAP BaPBa nsa nsa ng ng Du Du Sy SyMoMoU.S. Trait Acres (2003, M. Ac.) USDA Biotech Approvals70 35 30 60Monsanto traits 25 50Competitive trait offerings 20 40 15 30 10 205 100 0 F w atyernto onola entS orncks ola ton tton ornsoy n n nI&II nDoks cor corcor cor BA tacPcan Ba canWc cot cstansa ng RR ton DuRR lexIMIYG LL rn sRRRR CR Sy LL cotMo rcu CoCoBGHeSource: Monsanto internal and USDA database, June 2004 9 10. Delivering the Pipeline, Advancing New Products Phase 4 Phase 2 Phase 3LaunchDiscovery Phase 1 Monsanto 2003 Gene/trait Proof ofEarlyAdvanced Pre-launchMarketidentification conceptdevelopmentdevelopment LaunchAnnualHigh-throughputTest gene Field trials and Efficacy andProductRegulatoryReport screeningin plantspre-regulatoryregulatory dataintroductionapprovals Conservation RoundupHigh-yielding YieldGard IIConservation InputGrain yieldtillage elite Ready /corninsect- tillage eliteSeed size & Traitnumbergermplasm YieldGardprotected corngermplasm High-yielding Candidates Nitrogencorn Rootworm, II cornDensitysoybeansRoundupCarbon RoundupYieldGardReady and YieldgardDroughtStress ProductionReady Flex Rootworminsect- Plustoleranttolerance benefit cotton cornprotectedcornYieldgardInsect control RoundupsoybeansBollgard IIRootwormCRW IIDroughtReady WheatNematodeinsect-stackstolerant HybridRoundup protectedsoybeans RoundupReady cotton Ready canolaDisease OmniSoy Omega-3 for Low linolenic HighImprovedProtein Outputhealthier oil food uses acidfermentable energy feedenhancementsTraitProtein contentfor food uses Improved- soybeansstarch corn corn Amino acid Candidates protein soy for for foodfor ethanolImproved- Processor balancefoodLipid energy corn IIImproved- Processor preferred eliteImproved- Consumer enhancementsfor feedenergy corn preferred elite germplasm Oil contentprotein soy forbenefit for feedgermplasm inin key cropsImproved Fatty acid balancefeedkey cropsCarbohydrateprotein cornImproved-oilenhancementsfor feedsoybeans forBioactivesprocessingOn May 10, 2004, Monsanto announced it is deferring all further efforts to introduce Roundup 10 Ready wheat until such time that other wheat biotechnology traits are introduced. 11. Success in Traits Business Is Supported by Integrated Platforms for BreedingMarker Assisted BreedingSeed is the delivering vehicle Accelerates Hybrid CornPerformance New BreedingNetwork of Breeders TechnologyYield160Molecular Breeding150TraditionalBreeding Crop Analytics140TemperateSubtropical Tropical SubtropicalGlobal GermplasmTemperate1301 23 4 50Year11 12. Roundup Ready Trait Is Significantly Expanding in Corn MarketU.S. Roundup Ready Corn Acreage Growth Market Potential25Millions of acres (including stacks) Current forecast of20M acres in 2005 2020U.S. season 16Stacking with other15traits to further12expand the acreage10Could reach 50M7.8acres via: 4.6 Channeling52.7 2.1 Improved European0.9regulatory situation0 19981999 2000 2001 2002 2003 2004F 2005F12 13. 13 14. Only YieldGard Are Treated With Chemical 15M Acres Rootworm Market Fit:All 37M Infested Insecticides Acres WAWA MEMEMTNDMTNDMN MN MIMIVTNH OR VT NH OR IDID WI WISDSD NY MA NY MA MI MI YieldGard Rootworm CTRI CT RIYieldGard Rootworm WY WY IA IA PAPANJNJ Advantage:NENE Advantage:OHOHNVNV MD DE MDDEIN UTIN IL UT ILWV Why Dont Farmers Treat?WV CO Superior Performance:CAWhy Dont Farmers Treat? COCA Superior Performance:VA KS VA KS MOMO KY KY 18 bu. advantage over 18 bu. advantage over Cost vs. inconsistent Cost vs. inconsistentNCNCTN TN untreated untreatedOKOKcontrolcontrolAZAZAR NM SCAR NMSC Simplicity: Control in the Simplicity: Control in the ALGA MSAL Hassle factor & GAMS Hassle factor & seed, no hassle seed, no hassleTX inefficiencies atTXLAinefficiencies atLA plantingUse: No harmful Safe to time plantingUse: No harmful Safe to time FL FLCRW Acres CRW Treated Acres chemicals chemicals Exposure to hazardous Exposure to hazardous 25,000 or More -Infested25,000 or More chemicals of rotation Expansion chemicals of rotation Expansion 25,000 or More -Treated resistant CRW: market resistant CRW: marketmay grow even largermay grow even larger despite many more acres of infestation Corn Trait Mix Assessment Doane Marketing Research Study MHI Feb 2004 and Doane Marketing ResearchCompany Confidential Company Confidential 14 15. YieldGard Plus Controls Both Corn Borer and RootwormNumber of DemosFull regulatory approval for broadcommercial launch in 2005400 7932004 YieldGard Plus1941Demonstration Program Provide early adopters a chance to 26,881 Acresexperience YGPL technology in 2004 53,291 Acres 13,038 Acres(Theoretical Maximum Acres) Equally divided between 2004 Field ResultsAsgrow/DEKALB and SeedPartners Compare side-by-side YGPL vs.growers choice of hybrid + insecticide(e.g., Aztec or Poncho 1250) 15 16. Expanding the Corn Trait Portfolio for Enhanced Agronomic Performance and Crop Value Monsanto Corn Trait PipelineValue Creation Portfolio Yield & Stress Tolerance TraitsHi ProteinYield II Corn Food / Feed Quality Traits High Trp. YGRW II YGRW IICorn Agronomic Traits High Oil Yield IYield I Yield ICornYGCB II YGCB II YGCB IIYGCB II & Stacks& Stacks & Stacks& StacksHigh Lys. High Lys.High Lys. High Lys.High Lys. CornCornCornCorn Corn RR + YGCB RR + YGCB RR + YGCBRR + YGCB RR + YGCBRR + YGCB + YGRW + YGRW+ YGRW + YGRW+ YGRW+ YGRW YGCB + RR +YGCB + YGCB + YGCB + YGCB + YGCB +YGCB +YGRWYGRW YGRW YGRW YGRW YGRW YGRWYGRW YieldGardYieldGardYieldGardYieldGard YIeldGardYieldGardYieldGard YieldGard RR + YGCBRootworm RootwormRootworm Rootworm Rootworm RootwormRootwormRootworm RoundupRoundupRoundupRoundup Roundup RoundupRoundupRoundupRoundup ReadyReady ReadyReadyReady ReadyReady ReadyReadyYieldGardYieldGardYieldGard YieldGardYieldGardYieldGard YieldGardYieldGardYieldGard YieldGard CornborerCornborerCornborer CornborerCornborerCornborer CornborerCornborerCornborer Cornborer 1996 19982003 20042005 2007200920122013 201416 17. Drought Tolerance in GreenhouseCorn & Soybeans CornSoybean Control With Gene Control With Gene Control With Gene Control With Gene New biotech traits in the development pipeline17 18. Drought Tolerance Leads Advanceinto 2003 Field TrialsCorn with gene Corn without geneMid Summer Vegetative Drought Tolerance Drought Tolerance Improves Grain Yield 18 19. Cold Stress Tolerance ResearchDiscovery of cold tolerance gene andLow stand establishment and its testing in model plantsdelayed emergence limit cropyield and use of conservationArabidopsis Control Arabidopsis Controlfarming practices Cold Cold StressStress Germination GerminationProduct Conceptw/ Gene Screen ScreenEarly seedling germination andgrowth tolerant to cold wetControl Controlconditions Cold StressedGrower BenefitsRiceHigher yields and better standestablishment on conventionaland no-till acresFlexibility in planting and earliercrop emergence (~7 days) Control With Gene Control With Gene 19 20. Cold Stress Tolerance GenesAdvancing Into Crops2004 Results: Confirmed lead under cold germination screen. Geneincreases both the extent and uniformity of germination under cold, wetconditions. Phase: DiscoveryCorn Seed ControlCorn Seed With Gene20 21. Improved Soybean OilComposition for Food Low Saturates with MidNew Product Pipeline: Oleic and Low Lin3 step change improvementsMid Oleic andReduce Saturated FatLow LinLow Linolenic andImprove Flavor & Shelf Improve CardiovascularSoy OilLife with Oxidative Health EliminateStabilityTransgenic Trans-fatsBreeding Breeding LinolenicLinoleic SatsOleic18:318:2 18:0 / 16:0 18:1Standard Soybean Low Lin Mid Oleic + Low Lin Zero Sat + MO + LL 21 22. Omega-3 Biofortification ResearchOmega-3 Deficiency Implicated in CVDOmega-3 fatty acids are essential JapanRecommendationsRatio dietary omega-6:3constituents in human diet: 4:1 are for a ratio of 4:1omega-6 to omega-3 CanadaAmerican Heart Assn & American UKDietetic Assn and > 1600 researchstudies support health benefitsUS Diet80:1 Product Concept50 CV deaths/100,000 200Vegetable oils enriched with% general population stating they% general population stating theybio-available omega-3 39.1% consider their diet deficient in consider their diet deficient in32.0%Benefit 30.9%29.4%New consumer product options 24.9% 23.1%for omega-rich foods Folic Acid 18.7% Omega-3 Whole GrainsQualified health claimsSoy Protein Vitamin C Vitamin EEnvironmental sustainability FiberEconomical supply 22 23. Renessen JV: Biotech to Improve Cropsfor Animal Production & Grain ProcessingMonsanto Cargill Biotech Seed &Grain Grain Biotech Seed &Grain GrainGrowerGrowerTraitsGermplasm handlerprocessorTraitsGermplasm handlerprocessorFrom concept to newproduct field trials inless than 5 years High value corn High value soybeans with increasednutritional densityMonmouth, IL 07/23/0323 24. Monsantos CommitmentLeading Technology Provider Traits New product conceptsLargest Germplasm and Seed Provider Commercial access to elite germplasm Long-term participation in new discoveriesBroad Licensing Company Access to customers with new products Expansion into new markets Monsanto is an agriculture focused Company 24