Shares in Eden Research (EDEN:AIM) ripen 4.2% to 12.5p at the open as the breakthrough biopesticides play announces new distribution agreements with commercial partner Sipcam, an Italian multinational specialising in making and marketing agrochemicals.
Covering additional territories, these new agreements demonstrate further fruitful progress with Eden’s first product, Mevalone, and importantly, only deepen its relationship with family-owned firm and 9.89% shareholder Sipcam.
These fresh deals cover China and Japan, marking Eden’s first foray into the Far East and presenting a particular growth opportunity in China, the world’s largest grower of grapes.
WHAT DOES EDEN DO?
Eden Research provides breakthrough biopesticide products and ‘natural microencapsulation technologies’ to the global crop protection, animal health and consumer product industries and is now successfully commercialising its technologies.
Shares highlighted Eden’s exciting growth prospects at 8.25p here in March - the shares have cultivated a palate-pleasing 52% gain since - noting that its significant investment in intellectual property and registrations has created a competitive advantage in a global agrochemicals industry increasingly shifting towards biological products.
Today, Eden announces that Sipcam wishes to expand the footprint it has to sell the micro cap’s first fungicide product, Mevalone, in a number of additional territories, showing the confidence and belief Sipcam has in Mevalone and Eden’s Sustaine technology (see below).
Sipcam has exercised the option it holds for new distribution deals in additional territories, bringing an €900,000 option exercise fee into Eden’s coffers, and will be appointed the exclusive distributor of Mevalone in the USA, Brazil, Mexico, China, Argentina, Chile, Japan and South Africa.
It is already the exclusive Mevalone distributor in Italy and Spain, as well as Australia and New Zealand; as such it has good product knowledge and insight into the grape fungicide market and is well-positioned to commercialise Mevalone in new markets including China and Japan.
BATTLING BOTRYTIS
Mevalone is primarily used as a treatment for the grim-sounding ‘botrytis’ on grapes. Botrytis is a fungus that affects many plant species, but it is particularly problematic for grape growers due to the rapid progression of the disease and its significant impact on crop yield and wine quality.
The good news for grape growers is Mevalone is highly effective in the battled against botrytis. Furthermore, its efficacy compares favourably with the conventional chemical products that currently dominate the botryticide market, but without the concerns of pesticide residues and disease resistance.
Eden’s CEO Sean Smith is particularly upbeat about the potential of Mevalone in the United States, the largest market in the world for crop protection products, a major grapes producer and also the fourth largest wine producer in the world.
House broker Shore Capital comments: ‘In addition to the new distribution agreements to be signed by the two parties, collaboration work continues with Sipcam in respect of Eden’s natural microencapsulation technology, Sustaine, which is being assessed for synergy with a number of active ingredients used in crop protection.
‘Using the Sustaine technology potentially brings a number of advantages to existing conventional and natural active ingredients such as enhanced efficacy, formulation stability, patent protection, time-release and resistance management.'
