Last checked at 
LONDON (Alliance News) - Eden Research PLC on Wednesday said it has signed a commercialisation deal with a subsidiary of US-based Eastman Chemical Co, as it said its revenue for 2016 is set to halve year-on-year.
Eden, which makes natural microencapsulation technologies for the agrochemicals, animal health and consumer products industries, said it has signed a commercialisation deal with Taminco BVBA, a unit of Eastman, which will give the US company the exclusive right to develop Eden's nematicide formulation for commercial sales. The product will be marketed under the Cedroz brand name.
A nematicide is a type of chemical pesticide used to kill plant-parasitic nematodes.
Eastman will pay Eden an undisclosed upfront fee as part of the deal, in addition to milestone payments through to 2019 when it is anticipated sales of the product will commence. The agreement will cover 29 markets globally, Eden said.
Separately, Eden said its revenue for the year to the end of December will be around GBP400,000, compared to the GBP883,312 it made a year before. It anticipates an earnings before interest, tax, depreciation and amortisation loss of around GBP1.1 million, widened from a GBP200,000 loss a year before.
In 2016, the group has shifted its business model from licensing its technology to product sales, which has meant it has received lower upfront payments. This has combined with delays in securing regulatory approval for its products in certain countries to weigh on income.
Eden said it remains confident on its medium-term outlook. Sales of its 3AEY fungicidal product, for treating botrytis in wine grapes, are due to start in France in 2017, subject to still-pending regulatory approval being received.
Eden also is still awaiting regulatory approval for 3AEY in Portugal but said authorities in the country are "in general, very slow in granting product approvals". This, however, should not have a material impact on Eden, it said.
Overall, the company said it was encouraged by the level of sales for 3AEY and expects to see sales of the product rise in 2017 as it wins market share in countries where the product has been approved and as sales start in new countries.
Shares in Eden were down 17% to 11.62 pence on Wednesday.
By Sam Unsted; samunsted@alliancenews.com; @SamUAtAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.