Eden Research revenue set to beat market expectations

Eden Research plc (AIM: EDEN), the AIM-quoted company focused on sustainable biopesticides and plastic-free formulation technology for use in the global crop protection, animal health and consumer products industries, provides the following unaudited trading update for the year ended 31 December 2023.

Highlights

• Revenue for the year is expected to have increased by approximately 72% to £3.1m, £0.3m, or 11%, ahead of market expectations of £2.8m (FY2022: £1.8m)
  

  
  

• Product sales for the year are expected to have increased by approximately 63% to £2.6m, in line with market expectations (FY2022: £1.6m)
  

  
  

• EBITDA for the year, excluding share-based payments, is expected to be approximately £1.2m loss, £0.7m, or 37%, ahead of market expectations of £1.9m loss (FY2022: £1.7m loss)
  

  
  

• Cash position at the year-end was £7.4m, £0.4m, or 5%, below market expectations of £7.8m (31 December 2022: £2.0m)
  

  
  

• First commercial sales of Ecovelex™ following the grant, according to Reg. EU/1107/2009, of a temporary approval in Italy for use as a bird repellent seed treatment in maize for the 2024 growing season
  

  
  

• First commercial sales of Esseva^® (the tradename of Mevalone in France) to Corteva, Eden's distribution partner for Esseva in France; a key growth opportunity
  

  
  

• California state approval received for Mevalone^® after the period end, in January 2024
  

Product sales

Despite challenging growing conditions which adversely affected demand for fungicides across many of the Company's main markets for Mevalone, new territory authorisations and the positive impact of label expansions in recent years have contributed to a significant increase in product sales from £1.6m to £2.6m, a rise of 63%.

Following the appointment of Corteva France as Eden's distribution partner for Mevalone in France (where it is marketed as "Esseva"), Eden made its first commercial sales to Corteva France in 2023.

France represents a significant opportunity for Eden as it is widely recognised for its high-quality agricultural output. France's vineyards are the country's biggest consumers of plant protection products, including fungicides. Although viticulture represents just 3% of France's agricultural land, the sector consumes 20% of the country's fungicides.

There is also the potential to significantly expand the use of Esseva for the treatment of powdery and downy mildews, for which an application was submitted in 2023. It is currently expected that this label expansion application will be granted in 2024, subject to timely approval by the French regulatory authorities.

2023 also saw approval for Mevalone in New Zealand, Ireland and Poland, the latter of which is acting as the Rapporteur Member State on behalf of the EU central zone.

In addition, sales of Cedroz recommenced after the resolution of production-related product issues and, at the end of 2023, Eden made its first meaningful sales of Ecovelex to Corteva.

In the US, Eden received numerous State-level approvals for Mevalone and Cedroz in 2023, following EPA approval in September 2022.

Sales of Mevalone in the US began in 2023, though these were limited as Eden awaited approval from the regulatory authorities in California, which represents more than 80% of the addressable market for Mevalone in the US.

Just after the year-end, approval of Mevalone was granted in California, resulting in an order being fulfilled for Sipcam Agro USA, Eden's distribution partner in the US. As a result, Eden expects more meaningful sales of Mevalone in the US in 2024.

Ecovelex

In May 2021, Eden signed an exclusive Commercialisation, Supply and Distribution Agreement with Corteva Agriscience ("Corteva"), the fourth largest agriculture inputs company in the world.  The agreement covers Eden's first seed treatment product, Ecovelex, which relies upon Eden's proprietary, plastic-free SustaineÒ encapsulation technology.

Over the last three years, the companies have worked closely together to undertake field trials and other development work and in May 2023, Eden made a full submission for authorisation of the product in the EU and select additional territories. 

In December 2023, Ecovelex was granted a temporary approval in Italy for use as a bird repellent seed treatment in maize for the 2024 growing season under EU regulation 1107/2009, bringing it to the market for the first time. This allowed Eden to sell a significant amount of Ecovelex to Corteva before the year end.

Insecticide

A number of potential commercial partners for Eden's insecticide product ran, between them, a large number of field trials in 2023 and, so far, these have produced encouraging results.

Eden has started to see results from its potential partners come in and is pleased to say that they are, thus far, in line with Eden's own results.

The Company expects there to be a high level of interest for this product, particularly in the key markets of Europe and the US.

Eden has now started commercial discussions with various potential partners to begin the evaluation of who to appoint as distribution partner for the insecticide product and shall update the market during 2024, as appropriate.

Outlook

Eden expects to see further, strong product sales growth in 2024.

This is driven by an expectation of repeat Ecovelex sales, subject to further regulatory clearances, but also increasing sales of Mevalone and Cedroz due to increasing market share and off the back of approvals in additional territories.

In late 2023 Eden concluded a successful fundraise of £9.9m (before expenses), which will allow the Company to expedite the development of its new and existing products and expand into new geographies.

Sean Smith, Chief Executive Officer of Eden Research plc, commented:

"In 2023 Eden achieved several key regulatory and commercial milestones resulting in solid sales performance and revenues which have exceeded market expectations.

A particular highlight was the granting of a temporary approval of Ecovelex in Italy for use as a bird repellent seed treatment in maize for the 2024 growing season, marking the first commercial sales of not only a new product, but an entirely new product category; an exciting milestone which gives an early indication of the long-term commercial viability of that product.

The commencement of sales of Mevalone for use in California following regulatory approval was also an important event and provides us with access to a significant addressable market, which we hope to further capture in 2024.

Looking forward, our successful fundraise in 2023 will allow us to expedite the development of our existing product portfolio, expand into new geographies and develop new product opportunities. In 2024 we will continue to build on the progress made this year to drive sales growth, step-up commercial activity and push forward apace with our product plans.

I look forward to updating shareholders throughout the year with news of the exciting, significant progress we expect to make."