Eden Research plc (AIM: EDEN), the AIM-listed company that provides breakthrough natural bio-control products and microencapsulation technologies to the global agrochemicals, animal health and consumer products industries, provides the following end of year trading update.
2016 has seen the first sales of 3AEY in Italy (where it is sold as 3logy®), Greece (Mevalone™), Kenya (Hawk™) and Spain (ARAW®). In total, sales of 3AEY at distributor level are in excess of €1m with over 85,000 litres sold in those territories. Sales were somewhat above what we and our partners had forecast. This is encouraging particularly as botrytis, which is the fungal disease that 3AEY targets, was not especially prevalent this season in most regions. In some areas, 3AEY achieved a market share of approximately 20%, which is a very good result for a new product to market.
In 2016, it was from partners’ sales of 3AEY from which Eden derived its revenue in the form of royalties. However, it is intended that from 2017 onwards Eden itself will supply its partners with product in most if not all of the above territories, as well as other countries where 3AEY is to be marketed in the future.
Sales of 3AEY are expected to start in France in 2017, subject to regulatory approval, which is still pending. In Portugal, the position is less clear as the regulatory authorities there are, in general, very slow in granting product approvals. The impact on overall sales to Eden is, however, not material at this stage. Based upon our understanding of the timescales involved, it is hoped that approval will be granted in Portugal during the course of 2017, though it is unclear as to whether this will happen early enough to allow for sales of 3AEY in the 2017 season. Approvals of 3AEY are also expected in several new territories. Further updates on these pending approvals will be provided in due course.
Overall, the Company is encouraged by the level of sales of 3AEY and its acceptance into the market. In 2017, we expect to see an increase in sales as market share increases in those countries where sales have already taken place and sales start in new territories.
Eden today announced that it has signed an agreement with Eastman Chemical (“Eastman”) which has granted them the exclusive right to develop the market for Eden’s nematicide formulation, which will be marketed by Eastman as ‘Cedroz™’. As part of the agreement, Eastman will pay Eden an upfront fee, as well as annual milestone payments until 2019 when it is expected that sales will commence. Eastman will also take on the responsibility for the registration of Cedroz™ in each territory covered by the agreement whilst Eden retains responsibility for the registration of the active ingredients and will supply Eastman with its product requirements. The agreement covers 29 countries including the largest markets for nematicide products globally.
Revenue for the year ended 31 December 2016 is currently expected to be in the region of £0.4m with an EBITDA loss for the year of approximately £1.1m. Eden’s cash position is expected to be approximately £1.4m at the end of 2016. The evolution of Eden’s business model in 2016 from technology licensing to product sales has resulted in lower upfront payments, which coupled with the delay in receiving regulatory approval in certain territories has impacted earnings in the 2016 financial year. However, the Board remains confident in the new business model and believes that it will lead to greater returns in the medium and longer term.
|Eden Research plc
|Sean Smith, Chief Executive Officer
||Tel: 01285 359 555
|Alex Abrey, Chief Financial Officer
|Shore Capital and Corporate Limited
|Stephane Auton/Patrick Castle
||Tel: 020 7408 4090
|Walbrook PR Ltd
||Tel: 020 7933 8780 or email@example.com
||Mob: 07980 541 893
||Mob: 07584 391 303
Eden Research is a technology development and commercialisation company with intellectual property and expertise in encapsulation, terpenes and environmentally friendly technologies to provide naturally occurring solutions for the global agrochemicals, animal health, and consumer product industries.
Eden’s encapsulation technology harnesses the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can also be used with both natural and synthetic compounds to enhance their performance and ease-of-use. The technology uses yeast cells that are a by-product of numerous commercial production processes to deliver a slow release of natural compounds for agricultural and non-agricultural uses. Terpenes are already widely used in the food flavouring, cosmetics and pharmaceutical industries.
Historically, terpenes have had limited commercial use in the agrochemical sector due to their volatility, phytotoxicity and poor solubility. Eden’s platform encapsulation technology provides a unique, environmentally friendly solution to these problems and enables terpenes to be used as effective, low-risk agrochemicals.
With leading consultants in their respective fields, the Company is developing these technologies through innovative research and a series of commercial production, marketing and distribution partnerships.
The Company has a number of patents and a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry. To date, the Company has invested in the region of £12m in developing and protecting its intellectual property and seeking regulatory approval for products that rely upon the Company’s technologies. Revenues earned by the Company have been modest whilst the Company has concentrated on securing patent protection for its intellectual property, gaining regulatory approvals, identifying suitable industrial partners, and entering into commercial agreements.
In May 2013, the three actives that comprise Eden’s first commercial product, 3AEY, were approved as new ingredients for use in plant protection products. This represents a major milestone in the commercialisation of Eden’s technology and is a significant accomplishment for any company. To illustrate this point, one should note that in all of 2013, Eden’s approvals represented 3 of only 10 new active ingredients approved by the EC.
3AEY has been authorised for sale in Kenya, Malta, Greece, Bulgaria, Spain and Italy.
Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN.
For more information about Eden, please visit: www.edenresearch.com