Eden Research plc (LON:EDEN), the AIM-quoted company focused on sustainable biopesticides and plastic-free formulation technology for use in global crop protection, animal health and consumer products industries, has provided the following unaudited trading update for the year ended 31st December 2021.
Highlights
· Sales of Cedroz and Mevalone are expected to have increased overall by approximately 4% in volume and by 6% in value to €1.3m (2020: €1.2m)
· Product sales are expected to have remained flat in GBP terms at approximately £1.1m (2020: £1.1m), due to adverse foreign currency exchange rates
· Revenue for the year is expected to be approximately £1.4m (2020: £1.4m) with a loss before tax and statutory operating loss of approximately £3.4m (2020: £2.2m)
· Adjusted EBITDA (excluding Share Based Payments) is expected to be approximately £1.9m (loss) (2020: £1.5m loss)
· Cash position at the year-end was £3.9m, in-line with management expectations (2020: £7.3m)
· Development of Eden’s seed treatment and insecticide products continues on track with good progress made in 2021 and the Corteva partnership has moved into the next stage of development triggering a milestone payment to Eden
· Significant expansion of the Company’s addressable market was achieved as the labels for both Mevalone and Cedroz were expanded with the addition of new countries, disease and crop targets
Corteva
In May 2021, Eden signed an exclusive Commercialisation, Supply and Distribution Agreement with Corteva Agriscience (“Corteva”), the fourth largest agriculture input company in the world. The agreement covers Eden’s first seed treatment product which uses Eden’s proprietary, plastic-free SustaineÒ encapsulation technology.
During the last year, the two companies have worked closely together to undertake field trials and other development work and have recently agreed to move into the next phase of the agreement. The decision by Corteva to move into the next phase of development under the Agreement is clearly positive and has resulted in a milestone payment being due to Eden. Further development work, including regulatory field trials, is now underway.
It is still currently expected that launch of the product in the European Union will occur in time for the 2024 growing season, although both companies acknowledge that this is an estimate and is open to revision, dependent on development and product registration.
The seed treatment market is globally worth approximately US$6.5 billion annually with an estimated annual growth rate of between 10 and 12 percent. Eden estimates product sales arising from the successful development and registration of this seed treatment product may reach €20m per year in the short term following launch with significant opportunities for growth in excess of this figure.
Product sales and development
Product sales in 2021 continued to be affected by the global pandemic and its impact on the travel and leisure industries and adverse weather conditions which resulted in wine grape production and, therefore, the use of associated crop protection products, being significantly reduced.
In addition, regulatory processes around the world continued to be impacted with regulatory agencies adjusting to new work practices and still catching up with workload which had increased during 2020. As a result, a number of product authorisations which had been expected, and which should have resulted in product sales in 2021, were delayed.
However, during the year, authorisation was received for the sale of Eden’s bio-fungicide in Spain for use on a range of new crops including strawberry, cucumber, tomato, lettuce, herbs, and a range of berries. Additionally, the approval in Spain expanded to include important disease targets such as Sclerotinia, Monilinia, Alternaria, and Phytophthora. Eden and its partners are working to expand the label for Mevalone® in a number of additional countries.
In addition, Eden’s commercial collaborator, Eastman Chemical Company, received authorisation for the sale of Cedroz™ in Italy.
Finally, at the end of the year, French regulatory authority ANSES granted full authorisation of Eden’s bio-fungicide for use on pome fruits (such as apples and pears) to prevent post-harvest storage diseases.
The positive impact of these authorisations on product sales is expected to be realised from 2022.
Development work continued apace in 2021, including on Eden’s insecticide and seed treatment products, as well as third party active ingredients which use Eden’s proprietary Sustaine® technology.
U.S.
Eden currently still awaits approval of its active ingredients, as well as Cedroz and Mevalone, in the U.S. by the Environmental Protection Agency. The Company has a good understanding of the process that remains and expects to update shareholders with further news on this in the coming months. The approvals are expected to significantly increase the addressable markets for Eden’s products.
In October 2021, Eden announced that its shares will be traded on the U.S. OTC market which provides U.S. investors with the ability to trade in the Company’s ordinary shares in U.S. dollars and during U.S. market hours.
In the first half of 2022, Eden expects to focus some of its efforts on increasing visibility to these US investors, tied in with the anticipated U.S. EPA approvals.
The U.S. has one of the largest food markets in the world, and its ongoing growth presents a significant opportunity for biopesticide market participants. As the only AIM-quoted company focused on biopesticides, we believe that Eden offers a unique proposition for U.S.-based investors seeking to participate in the rapid growth and promising future of sustainable agriculture.
Sean Smith, Chief Executive Officer of Eden Research plc, commented:
“Given the particularly difficult backdrop created by the global pandemic and adverse growing conditions in many of our operating territories, I am pleased to report good commercial, regulatory and development progress. Product sales volumes have increased and this trend is set to accelerate in 2022, based upon our expanded list of authorisations, anticipated authorisations and a return to market conditions that are more in-line with the pre-pandemic environment. We continue to carefully manage our costs and cash position, with sufficient funding in place for the foreseeable future.
Good progress is being made with Corteva and with every few months that pass, we become increasingly confident in that project, the outcome of which could be meaningful sales initially in the EU alone. EPA approval in the U.S. should also provide further, significant product sales opportunities which we are well prepared to fulfil.
We look forward to an exciting year ahead and would like to thank shareholders for their continued support.”
