Eden Research is doing well this year.
Flagship biopesticide products Mevalone and Cedroz have received regulatory approval left, right, and center, giving them access to new European markets including Greece, Poland and Italy.
Mevalone was also approved in New Zealand under the brand name Novellus.
Then, in a huge boost to Eden’s IP, California and Florida, the two largest US states for crop production, gave the nod to nematoden slayer Cedroz.
Florida recently approved Mevalone, the mold killer used primarily in grape-growing vineyards
Florida also approved Mevalone, the bortrytis fungus killer used primarily in grape-growing vineyards.
No doubt an impressive streak of endorsements, but it wasn’t easy for Eden to get there.
As chief executive Sean Smith explained in a recent interview, the two-tiered regulatory system in the US has been a major struggle.
Federal approval from the Environmental Protection Agency (EPA) was the first barrier to entry into the important market.
Normally, you could expect a two-year period for approval. It took Eden four years to get Mevalone and Cedroz approved.
Smith pointed to Covid lockdowns as the main driver of this massive slowdown, but one wonders if the Trump administration’s regulatory budget fire may have also helped.
On the other hand, the EPA approved the three active ingredients of the products and the delivery systems that will be the building blocks for future products.
In theory, this should make it easier and faster to get new products federally approved in the US… but then you have the states to worry about.
Some, Smith explained, simply say “thank you so much for your application and your fee, come along and do what you want.”
Others, such as California, are stricter, requiring additional field trials before approval.
By far the largest market for Eden’s products and a “significant force” in the grape harvest, California has yet to approve Eden’s biggest killer app Mevalone.
“That’s the next milestone for us,” said Smith, who said he would keep his ears to the ground for news in the coming months.
‘In the meantime, our distributors are continuing to sell products. In reality, we don’t expect a major revenue impact until the 2024 growing season, assuming California will have the most impact,” he added.
Clearly, with patience, Eden’s addressable market is huge.
For Mevalone alone, the European and US markets are about the same – about €101 million and €95 million ($109 million and $102 million) respectively, which translates to about €3 million in sales in each jurisdiction (slightly less in the US). US) annually for Eden’s range of products at an estimated 40 percent margin.
Specifically for the UK, Mevalone’s addressable market is relatively small compared to other regions, with its 4,000 hectares of vineyards no larger than France’s Chablis region alone.
But that nasty, grape-loving bortrytis fungus grows ‘extremely well’ on the islands due to the favorable weather conditions.
Most UK vineyard operators will cite mold as one of their biggest problems if you ask them, says Smith.
UK approval for Mevalone is still pending, but Eden is hoping for news sometime this year.
Conversely, a country like Turkey, a huge producer of grapes to satisfy the country’s appetite for raisins, is less of a target market due to the hot and dry conditions.
Not only do these addressable market numbers rule out additional pending approvals for Mevalone, they also rule out another huge opportunity for Eden.
As it stands, Mevalone is only approved for a few crops; mainly grapes, but also apples in France, a fruit with a similar disease profile to grapes.
But just as Viagra, to use a crude example, was originally intended for heart conditions before taking on the challenge in other medicinal areas, Mevalone has significant potential to expand into other use cases.
It’s called “label extension” in pharmaceutical parlance, described by the FDA as when “additional clinical data has shown that the drug can safely and effectively treat patient populations other than those for which it was originally intended.”
In Eden’s situation, this means discovering new use cases far beyond what Mevalone is currently approved for.
Smith explains, “The goal we’re jointly focusing on right now is to expand the label to include two other disease targets, which means the target market will multiply by a factor of 10.”
Clearly huge potential, and Eden has already taken steps to expand Mevalone’s label, including filing in France in the coming weeks.
Not enough expansion plans on the board for you? There is also an entirely new product in the works that is being developed in collaboration with US agriscience giant Corteva.
“We’ve been working with those guys over the last few years developing a seed treatment and expect to be able to say a lot more about that soon,” Smith teased.
The future sales potential for this unnamed seed treatment is €21.6 million in the US and €8.6 million in the UK and Europe.
As it looks now, Eden’s share price has underperformed in 2023, with a 3.4 pence market cap of £14 million.
But it’s hard to deny the group’s potential, even if, like regulatory approvals, it may take a little patience.
Keep your eyes open.
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