RE: Mike Walters Report11 Feb 2017 18:57
Rot Not In France - (EDEN)
23/1/2017 (119264)
Rot Not in France
What fun to see The Sunday Times hailing a British biotech business as saviour of French wine. And even greater fun to read that the company concerned is Eden Research (EDEN), where many of us have been sitting patiently for years, hoping for the exciting science behind this business eventually to deliver the goods.
It is getting there, slowly but surely, with the pace of advance governed partly by the need to wait for the passing of the seasons, and maybe constrained by the limited resources imposed by a constantly tight cash position.
The Sunday Times sensation, delivered in a breathless tone which made me wonder whether it could really be aimed at Eden, foreshadowed the news that Eden's 3AEY product for treating and preventing botrytis in grapes had gained authorization for sale in France. This is long overdue. Under EU rules, approval ought to have come maybe 18 months ago, and 3AEY was selling, and selling well, in Kenya, Malta, Greece, Bulgaria, Spain and Italy in time for the 2016 harvest.
Characteristically, the French were dragging their heels blessing something not produced in France, despite substantial evidence that the French wine industry needed it to stop the grape rot, and alternative solutions were bringing ill health and even fatalities in France. Botrytis - grape rot - has hit France especially hard, and Eden says took out 20% of the total harvest, costing producers between Euros 10bn and 100bn annually worldwide, depending upon the weather. The market for botryticides is more than $350m a year.
Eden's established and proven product, which has the crucial advantage that it can be applied almost up the harvest, when grapes are most vulnerable, will be sold in France by partner SumiAgro France, part of Japanese giant Sumitomo, under the name Mevalone. Sumitomo companies already sell it elsewhere in Europe.
At this stage it is not clear who will be supplying the product. Originally planning to sell licences and reap just the royalties, Eden has been developing a new business model. Under this, it has the product made by a third party and supplies it to the distributor, in the process raising profit margins substantially. As suggested in my report of December 21 (Eden Lands A Big One), it is worth studying pages ten and eleven of the agm presentation, available at http://www.edenresearch.com/archives/presentation/Eden_AGM_2016.pdf
While the financial details of the SumiAgro France deal are not public at this stage, it is good news whatever emerges. Italy might be the world's largest wine producer, but the prestige of being associated with French wines is significant, and trials suggest that Mevalone can only improve the end product. Happily, it will be ready to service the vineyards in the crucial April/May season.
There will be a milestone payment to Eden on the French approval, and that follows a payment to Eden after the conclusi