Eden Research plc (AIM: EDEN), the AIM quoted company that develops and supplies breakthrough biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries, provides the following unaudited trading update for the year ended 31 December 2019.
Revenue for the year is expected to be approximately £2.0m (2018: £2.8m) with a loss before tax and statutory operating loss of approximately £1.4m (2018: loss of £0.5m).
Trading update highlights:
- Operating loss for the year of £1.4m is in line with market expectations
- The majority of the £2.0m of revenue was derived from product sales £1.7m (2018: £1.6m), achieved despite unfavourable growing conditions in the Southern EU, with milestone and upfront payments making up the balance
- First marketing authorisations received for Cedroz, the Company's second commercial product which is being marketed by Eastman Chemical
- One-year exclusive Evaluation Agreement signed with Corteva (NYSE: CTVA), the fourth largest agriculture input company in the world, covering seed treatments (post year-end)
During the year, Eden made good commercial progress, with the first marketing authorisations received for Cedroz, the Company's second commercial product, a nematicide which is being marketed by Eastman Chemical in Malta, Belgium and Mexico. Further marketing authorisations are expected during the course of 2020, which will result in an expanded footprint from which Eden will ultimately realise revenue from product sales.
In addition, Eden signed exclusive distribution agreements for the Company's first commercial product, a fungicide marketed as Mevalone, with Sipcam Oxon for Portugal and Benelux and with Sumi Agro Europe in five new markets across central Europe, including Germany and Poland.
The well-publicised hot and dry growing conditions across southern Europe during the peak 2019 growing season negatively impacted the development of Botrytis and this resulted in botryticide usage generally being impacted. Despite the resulting overall contraction of the botryticide market, product sales revenue increased as a whole compared to last year. The crop protection business is well-known for its sensitivity to growing conditions, but as the Company's geographical footprint and product portfolio expand, it expects to be more insulated from the variability of the weather.
Post year end, Eden has announced that its three EU-registered active ingredients, geraniol, eugenol and thymol, have all been approved for use in organic farming, following inclusion in the EU's Organic Production Regulation. This opens up new commercial opportunities for the Company and is relevant to all products that utilise the Company's three EU-registered active ingredients.
The Company has also signed a one-year exclusive Evaluation Agreement with Corteva, which allows Corteva time to evaluate Eden's Sustaineä encapsulation technology and several formulations in specific seed treatment applications in certain major territories and, if successful, will lead to Corteva being granted exclusive distribution rights, on terms to be negotiated. The overall global seed treatments market is in excess of $5 billion per year, and the opportunities being pursued by Eden and Corteva represent a meaningful percentage of the overall market and will initially target several major crops, including broad acre crops. This represents Eden's first collaborative development efforts in the area of seed treatments as well as the first disclosed collaboration with a global leader in agricultural inputs. Additionally, this is the most advance work done to date on major broad-acre crops.
Sean Smith, Chief Executive Officer of Eden, said: "The Company has made significant progress in 2019 which will ultimately result in an expansion of product sales revenue in new product markets and geographies. Marketing authorisations and commercial partnerships are key to the future success of Eden and so it is pleasing to have been able to announce a number of these during the last year.
In addition to expanding our commercial footprint through the introduction of new products into new geographical areas, it is also important for us to fully exploit the investment we have made in Mevalone thus far, which is what we expect to achieve by having entered into new distribution agreements with Sipcam Oxon and Sumi Agro Europe covering several important new territories in 2019.
Looking forward, we expect to be able to announce further marketing authorisations for both Mevalone and Cedroz as well as progress that is being made with existing and new partners in areas such as seed treatments, insecticides and other applications where the use of our active ingredients and Sustaineä encapsulation technology can bring important benefits to our commercial partners, growers, and ultimately consumers who benefit from sustainable agriculture."