Eden Research plc (LON:EDEN; OTCQB:EDNSF), the AIM-listed company specializing in sustainable biopesticides and plastic-free formulation technology for use in the global crop protection, animal health and consumer products industries , provided the following unaudited business update for the six months to June 30, 2022.
· Turnover should be approx. £1.0m (H1 2021: £0.8m) an increase of c. 33%; on track to meet annual targets of £1.4 million.
Product sales are expected to be around £1.0m (H1 2021: £0.7m), an increase of approx. 54%.
Adjusted EBITDA (excluding share-based payments) is expected to be a loss of around £0.8m (H1 2021: £0.8m loss), resulting in an overall pre-tax loss of £1.3m (H1 2021: £1.8m loss) .
Cash position at balance sheet date 30 June of £1.9m (HY 2021: £5.8m), however the Group had unaudited cash of £2.7m at 15 August 2022 following a tax refund and receipts from end-of-semester debtor transactions.
· Development of Eden’s seed treatment and insecticide products continues to progress well with positive and early indications from 2022 field trials received.
EPA clearance expected before the end of the year for Eden’s three active ingredients, as well as Mevalone and Cedroz, enabling significant sales of both products in 2023.
Product sales growth
Sales of Eden’s fungicide product, Mevalone, were robust in the first half of the year with the impact of the waning Covid-19 and demand for Eden’s products returning to pre-Covid levels, despite difficult growing conditions.
In addition, sales in new markets and areas of use have increased, as the receipt of product clearances translates into sales through our distributors. The continued diversification of uses for Eden’s products not only contributes to sales growth, but also to an increased level of resilience in the business as the company moves from one crop and disease target to many.
In May 2021, Eden signed an exclusive marketing, supply and distribution agreement with Corteva Agriscience (“Corteva”), the world’s fourth largest agricultural input company. The agreement is for Eden’s first seed treatment product that uses Eden’s proprietary Sustaine® plastic-free encapsulation technology.
We have continued to work closely with Corteva and testing to date has shown early indications of successful testing for the current season. Our goal is to seek regulatory clearance as soon as possible, which if successful will result in Eden selling the product to Corteva in time for the 2024 growing season, although this timeline is currently an estimate and remains subject to the submission of an application for regulatory approval by the competent authorities.
We are focusing on the EU and UK as initial markets for this product, which currently have an addressable market of 40 million. Over time, it is expected that we will be able to market the product in other geographies, including the United States, where the addressable market is approximately 240 million. Eden estimates that the peak product sales resulting from the successful development and registration of this seed treatment product for a specific application in all of these territories could be at least €33 million per year.
We began receiving, collating and reviewing results from our own insecticide field trials from 2022.
Additionally, samples have been sent to a long list of third parties who are undertaking their own field trials in the second half of this year.
At the end of the year, we will then review the trial results and seek commercial agreements with appropriate interested parties.
Eden is awaiting approval of its three active ingredients, along with Cedroz and Mevalone, in the United States by the Environmental Protection Agency. The approvals are expected to significantly increase potential markets for Eden’s products and pave the way for future product approvals based on registration of Eden’s three active ingredients.
The United States has one of the largest food markets in the world and its continued growth presents a significant opportunity for players in the biopesticides market. As the only AIM-listed company specializing in biopesticides, we believe Eden offers a unique proposition to investors looking to participate in the rapid growth and promising future of sustainable agriculture. EPA approval of Eden’s products, and subsequently, the company’s insecticide offerings in the future, will open up significant revenue opportunities for Eden, with a total market potential of €500m – around €94m for Mevalone, €189m for Cedroz and €237m for insecticides.
Sean Smith, CEO of Eden Research plc, said:
“The first half of the year provided positive indications that we are on track for significant product sales growth and we enter the second half of the year with confidence and a well-managed cash position.
Growing conditions can play a significant role in determining full year results, but we are encouraged by the strong first half and the underlying demand for our products that these interim results represent.
We look forward to updating the market in due course on some of the exciting projects we have underway and would like to thank shareholders for their continued support. »