Martek will pay SemBioSys Genetics US$10 million in research and milestone payments as well as undisclosed royalties on new product sales for the use of its safflower biotechnology.
SemBioSys has developed a variety of proprietary genetic engineering technologies for recombinant protein production and metabolic engineering of oilseeds including safflower. These technologies are ideally suited to the production of high-value lipids in oilseeds.
Martek, which this week reported its first profits since founding in 1985, is expanding production capacity for its DHA derived from microalgae, in response to a significant boost in demand over the last two years. It recently bought assets of contract fermentation business FermPro Manufacturing. The firm's blend of DHA and arachidonic acid is now used by four of the leading infant formula makers.
The agreement with Calgary, Alberta-based SemBioSys Genetics, which was spun out of the University of Calgary in 1996, is expected to last some years and lead to new products for both nutraceutical and pharmaceutical applications.
Standard & Poor's yesterday raised its 12-month target for Martek's shares to $75 from $72.