Science in the Triangle

Bayer CropScience is jockeying for a better spot in the lucrative U.S. seed market.

The German company, which employs about 400 at its U.S. headquarters in Research Triangle Park, announced Wednesday that it wants to buy Athenix, a venture-backed neighbor with 65 employees. Financial details of the deal were not announced.

Over the past nine years, Athenix has developed in its labs genetic traits that allow corn and soybean seeds to grow into plants able to withstand Roundup, a weed killer popular on farms.

Analysts project genetically modified crop seeds to generate about $15 billion in annual sales in 2015. But Bayer CropScience was a latecomer and until now has been a bit player among the six competitors in the U.S. crop seed market, which Monsanto dominates.

Buying Athenix could give Bayer CropScience a chance to catch up - particularly in the race to win farmers over with new seeds for hardier corn, the largest crop grown in the U.S. and a critical component in food, animal feed and fuel ethanol.

All of Athenix’s employees will join Bayer CropScience once the sale is completed, which could happen in a month or so, said Markus Andres, Athenix’s chief operating officer and co-founder. Initially, everybody will continue to work in the former Paradigm Genetics building, where Athenix moved two years ago, Andres said.

But Athenix’s work force and technology will be key to expansion plans Bayer CropScience announced in May. The expansion includes a research and development center in Morrisville and is projected to create up to 128 jobs over five years.

“We’re the nucleus for this R&D group,” Andres said.

Founded in 2001, Athenix discovered an antidote to Roundup in microbes, microorganisms found in the soil.

Researchers mined pieces of microbial genetic information and inserted them into cells of corn, soybean and rice plants. The technology resulted in plants containing a microbial gene. Sprayed with Roundup, the plants that grew from the genetically modified seeds stayed healthy and green.

Roundup was developed by Monsanto in the early 1970s and the company has had a lock on how to make crops resistant to the herbicide.

In 2006, Jerry Caulder, Athenix’s chairman and a former senior executive with Monsanto, hinted at the possibility that Monsanto might swoop in and buy Athenix before the competition. Athenix has had a research collaboration with Monsanto and last year the collaborators and RTP neighbors decided to build a shared green house.

But Bayer CropScience was the neighbor that came calling as a buyer.

Athenix, which raised a total of about $53 million in venture capital, considered an initial public offering of stock to continue to fund operations, Andres said. But Wall Street, mired in a financial crisis for the past 18 months, didn’t look receptive.

That left a sale as the best alternative for investors, founders and employees, Andres said.

He added that Athenix plans to continue its research collaborations with Monsanto, Syngenta and DuPont once it becomes part of Bayer CropScience.