Eden Research (LSE:EDEN) — Investor Presentation

0:01 Good afternoon, and welcome to the EDEN RESEARCH PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll, and I'd now like to hand you over to Sean Smith, CEO. Good afternoon to you, sir.

0:29 Good afternoon. Thanks, Alessandra. And thank you, everybody, for joining, for your interest, and for your time. We'll move straight ahead into the company presentation following our preliminary results. Just for those who don't know the story, EDEN RESEARCH is an analyst company focused on sustainable pesticides for crop protection and a number of other critical markets where we focus on the delivery of sustainable chemistry using plastic free, polymer free encapsulation technology. I'm Sean Smith. I've been chief executive for approaching ten years. My background is I've been in the chemical industry the vast majority of my career. I joined EDEN at a time where the business was structured as a licensing business and led the transformation of the business from a licensing company into a product development registration and commercialization company.

1:22 My background is long term in the chemical industry in a range of commercial roles from sales and marketing through to business line management. And I'm Alex Avery. I'm the CFO. Been with the company for over thirteen years now. I listed the company on AIM in 2012.

1:39 I'm an FCCA fellow of the Chartered Certified Accountants. Started off in audit for about five years and then moved into private equity and then moved to EDEN in 2011.

1:51 Okay. So working through a number of key points here. The first thing that I'll say is that, as I mentioned earlier, we're a company that's very much focused on the delivery of sustainable crop protection products for professional agriculture and, more recently, moving into the area of home and garden or nonprofessional uses as well in select territories. The company has developed a portfolio of property ranging from patents, trademarks, and trade secrets into and also, critically, a series of registrations, which are for our industry, and you'll you'll pick this theme up as we move through the conversation today, regulatory approvals, which are key for our industry. It's it's important to highlight that regulatory approvals for us are a double edged sword. They are what creates opportunities for us, but what also is is a a rate limiting step for our expansion or can be in any case. And on a positive note, also regulatory clearance is something that gives us an opportunity to defend our business over time.

3:00 We, as I mentioned earlier, develop, register, and commercialize products. Our go to market strategy relies very heavily on commercial partners in each key territory in which we operate. And so we're not putting, you know, a 100 people on the ground in France to go knock on the door of farmers. We're partnering with, for example, in France, the likes of Corteva or in Italy, for example, the likes of SIP Cam Oxen to do the demand development for us to inventory the products, to lead the marketing efforts of the products, and ultimately to sell to growers. So that that way, we're leveraging the local knowledge of experts in their area, in their market, and accessing the largest possible market share we can.

3:47 Key statistics for us, and there are a number of these regulatory approvals, as I mentioned earlier, are absolutely critical for EDEN. They are what define our addressable market. So to give you an example, when we first launched Mevalon, our first product, which is a grapevine fungicide intended for treatment of a number of different diseases across horticultural crops, The very first label that we had, and we refer to it as the label, which is essentially what we are allowed to sell the product for, was targeting one disease, detritus on one crop, grapes. Crop uses, if you refer to the chart here where we have today over a 100, crop uses in those days, just a number of years ago, were one.

4:32 Today, through a lot of hard work from both EDEN and some of our partners, we've expanded that to 100. And what that means is that we have a much larger addressable market today than we have in the past. So sustainability in agriculture, it seems as if one can't, have a conversation these days about, anything without talking about sustainability. But for us, sustainability isn't just a word that's that's fashionable at the moment, or it isn't just about something that that will come and go today or tomorrow. It's more about how we do things. And in agriculture, what does that mean? Well, it ultimately means taking an approach to growing crops, producing crops that is sustainable, not just today, but for the indefinite future.

5:24 Not depleting our soil resources, not affecting overall the the health and well-being of farmers or the environment, and that's absolutely critical. And for us, how do we do that? Well, we approach that with plant based chemistry, and we'll go into the details a bit later. What's most important to note is that there is a very significant drive across the world in agriculture to move from less sustainable practices to more sustainable practices. And what's driving that, largely speaking, is consumer sentiment and concern about the use of pesticides in the environment and the presence of pesticide residues on the crops. These are critical drivers coming from consumers, ultimately flowing through to policymakers, and eventually into regulation.

6:16 What does that translate into even further? Well, for farmers, it means a narrowing selection of available pesticides that they absolutely need to do their job effectively. Land is not getting any more plentiful or any cheaper, and, critically, the population is not getting any smaller on a global basis. And so what that means is that a farmer needs to be able to produce as much or more of a given crop as they have in the past, but they need to do so in a more sustainable way. And that is the direction of travel in our industry as well as a number of other industries, I should mention. The market potential for what we call biopesticides is very significant. So overall, the global crop protection industry is north of $60,000,000,000 a year, and that is growing at a substantial rate. But within that overall industry is the biopesticide industry, which is estimated to reach about $11,000,000,000 per year by 2027.

7:18 And we see it actually growing at a bit more than 15% per annum driven by the same dynamics that I've just mentioned, specifically regulatory pressure to drive practices toward more sustainable practices. And, again, here, we highlight some of the key drivers for us, consumer concerns over food safety, as I mentioned earlier. Farmers seeking equally effective alternatives to the conventional chemistry that they've used historically. And, of course, regulators coming in and systematically removing historic pesticides from the market, therefore creating problems for farmers who need to maintain their yield in order to maintain sustainable businesses themselves. We'll move on from the very high level background that describes the company, and we'll move into the progress that we've made over the course of 2023 as we discuss our preliminary results.

8:14 For those of you that know the story very well, when we get to the end of this, it's sort of a natural breaking point. But after the highlights from 2023, we'll also go into a lot more detail about our products, about how they perform, about what the size of the market opportunities are. And so, if you're not familiar with the story, if you'd like to become more familiar, stay with us after the the results, portion of this presentation. So moving on to commercial and operational highlights. And, again, this is is, critical for those that have been following the story. We have achieved some very significant milestones in 2023, and most notable amongst those is the temporary approval for EcoVelix,

8:58 our third product, which is a seed treatment that we've developed in conjunction with Corteva, which has been authorized for use on a temporary basis in Italy for the 2024 growing season. Why is that important? Well, there are a number of reasons, and and critically from a financial perspective, it's given us the opportunity to sell a reasonable quantity of material to Corteva who will ultimately treat the main seed in question and sell it to growers. And in fact, that's already been completed, and we're now just awaiting the planting of that seed in Italy on a commercial basis for the first time, which is a very exciting, landmark development. Very quickly, I'll I'll pause to explain who Corteva is. Corteva is one of our handful of commercial partners, which is one of the world's largest crop protection companies or a fully integrated business.

9:53 It was actually formed a number of years ago when the agriscience businesses of Dow and DuPont merged. So the emerging company is called Corteva. They are, in fact, the world's largest agro sized pure play company doing everything from crop protection products all the way through to seed and a whole an increasing range of services that they offer their customers who are ultimately farmers.

10:19 Moving along, we've continued to and we'll we'll go into, by the way, a lot of detail about EcoVelix a bit later in this presentation, what it is, what offering we're bringing to farmers, why there's a demand for it. So so rest assured if you have questions about that, we will get to those, and then, of course, we can cover those later. Keeping to the theme for us in 2023, we have continued to work very, very hard to expand the label for what is now our first two products, Mevalon and Sandros. And what does that mean referencing my earlier comments about the label? The label is the the document effectively that defines from the regulator what it is that we can do with our given product.

11:06 It's very similar to the pharmaceutical industry. If something is unlabeled, you're allowed to do it. And if it's off label, well, in theory, you're not. So it's an important point to note. And, again, we'll get into the detail about the products, but the most important point here in terms of the operational highlights and the commercial highlights for 2023 is that we have secured new regulatory approvals in a number of key territories. And in particular, in The US, we have expanded the total number of states that have authorized the use of both of these products to 17, including the critical states of Florida and California. Very And briefly, I'll just mention to you. Some of you who are are really switched on in terms of geography will say, well, hang on a minute. There are 50 states in The US. Why did you only get approval in 17?

11:56 That's a great question. The main reason for that is there are only 17 states in which we consider the, agricultural output to be relevant to these two products in the short term. So for example, North Dakota doesn't grow a lot of grapes. I won't say none, but I don't think they grow very many anyway. And and so you get the point. Far and away above all in the other states, California and Florida are key for us as our states such as Washington state, Oregon state, New York state, and a handful of others. And so we're very pleased to say that our local distribution partner, which is Sipcam Oxen Group in The US, are very hard at work today selling mevalon for use in California and a number of other states. In addition to that, we've also secured regulatory approvals for mevalon in a number of key additional countries, including New Zealand and, critically, Poland. And I'll touch on Indolete in a moment. But with Poland, why that is significant is that Poland has been acting on behalf of the Central European zone when it comes to crop protection. They've been acting as what's called the repertoire member state for the Central Zone. And what that means is that they have reviewed our dossier.

13:09 They've granted us authorization, and now it's a matter of time before the other concerned member states within that zone also grant the regulatory approval. So that is a work in progress, and we expect those authorizations to come through over the course of the next year or so. Also, touching very briefly upon Italy. Italy is a a reflection of an expanded label. So we're working with Sipcam Oxen, who are a distributor in Italy. We've been working very, hard to, again, expand the label. And, again, just to highlight the point, that means that we've been working very hard to expand the overall addressable market, therefore, leading to greater commercial progress or an increasing sales. In addition to that, our number two priority at the moment is development of a fourth product from the portfolio, and that is an insecticide.

14:02 Again, based on the same portfolio of active ingredients and our formulation technology, bringing that to the market as quickly as we can to fulfill some unmet needs. Here, what we're very pleased to say is that over the course of, 2023, significantly more than a 140 field trials were run by a series of potential partners who are very interested in bringing that product to market. And so those trials have produced some very encouraging results. We have ongoing conversations with a number of potential partners, some of which are names that you would well recognize, and we are looking to bring that product to market as soon as humanly possible, obviously, subject to registration.

14:50 And last but not least, we were successful during very challenging market conditions in raising 9,900,000 gross to ensure that we'll be able to continue to accelerate product development and the efforts that we began about four years ago on the back of a fundraise in early twenty twenty. And we will continue to build our in house capabilities and to expand the portfolio of products and registrations that will allow us to address an increasingly large market. So just in terms of the numbers, we've seen really good growth in revenue overall over the past three years, 50% between '21 and '20 '2 and seventy eight percent in 2023, taking us to 3,200,000 of revenue.

15:38 The bulk of that is product sales. That's a key metric for us, and we've seen that also grow nicely from 1.1 to 1.6 and up to 2.6 in 2023, seeing an increase of 63%. The operating loss has narrowed, again, consistently over the past three years down to 1.9 ahead of the market expectation of 2.8. And in terms of revenue, we ended up exceeding the market expectation, which was set at 2.8. And then in terms of cash, we ended the year, thanks in part in great part to the the fundraise at 7,400,000. We're pretty much a low overhead business. Sean already explained that we we commercialize our products through these partners such as Cortiva. So we don't have a large Salesforce, for example. We're a relatively lean organization.

16:26 We do expect to increase overhead slightly in 2024 because we are taking on some key staff in terms of commercial in particular. However, we do remain and have been some time debt free. Okay. Moving right along. News flow, out through the course of 2024, continuing the theme of expanding the portfolio of approvals that we have and supporting new product development. We anticipate, as I mentioned earlier, for the Central European Zone countries, which include Hungary, Germany, Austria, and a number of others to follow on from Poland's authorization for Mevalon.

17:10 Here, we are seeking authorization for approval to treat apple storage disease and also, botrytis on grapes. And once those authorizations are secured, rest assured, we will continue to work as we have historically to further expand the label on an increasing number of significant crops and for an increasing number of significant uses.

17:33 In addition to that, following on the very good progress we've made in 2023 and further progress we expect to make in 2024, we expect to have something to say about how we will bring our insecticide product to market in 2024. We expect that news to land before the year end or very early We are considering a number of options ranging all the way from one select global partner all the way through to a portfolio of regional and national partners to bring that product

18:05 to market. There are a number of considerations here, but what I will say, and I'm very happy to say, is that we have a significant amount of interest from some very significant and very good potential partners for that product. So we're we're quite pleased with that. What I will say is also that product has gone from strength to strength. So in our industry, and very similar to pharma, when you begin a development program and you ultimately identify a formulation that you're going to bring forward, there's always a fairly risky step. And as you bring that product forward through that development cycle, you are subjected to a good number of risks. So risks that you can't make the product risk, that the product is unstable, risks that the regulator will not be pleased. The the key step that's you know, that that I'm pleased to say we've made some very good progress with, in particular, is demonstrating the efficacy of the formulation across a range of different important tests and and seeing that in the field. That's that's really critical. We can do a lot of stuff in the lab here, in South Oxfordshire, but it's not really until we bring that product out into the field in field use conditions that we can really observe what its benefits are. And and, you know, we're very pleased with the progress we've made in '23 and are looking forward to further progress in '24 with a similar number of trials being run this year.

19:26 Also, I want to highlight that, we mentioned the temporary approval that was granted in Italy at the very end of 2023 for EcoVelx RC treatment. We are pursuing that again, in 2024. I should highlight that there's no guarantee that we will get it. Temporary approvals are, at times challenges. They are always led by farmer demand, and they are always subject to the judgment of the regulator. And so we are encouraged and hopeful that the regulators in Italy and perhaps a number of additional countries will see, that there is very strong farmer demand and a very strong need for that product and that they will be kind enough to grant farmers the ability to use that product on a temporary basis again for the 2025 growing season.

20:17 Furthermore, with Cedros, which is our second product, there's a nematicide.

20:22 Last year, our partner demonstrated that Cedros had good efficacy against a pest called wireworm. Wireworm is a is a larval stage of a of a beetle that affects a fairly wide range of crops, in particular, potatoes. And we are expecting to not only go for another temporary authorization for Cedros in a select number of countries, but moreover, to begin pursuing full regulatory authorization for Cedros against that pest target, thereby, again, sticking with the theme, expanding the market overall for the product. Next is we expect to engage in additional commercial agreements for what are called home and garden applications.

21:07 So you may recall that last year, we appointed Sipcam in Italy as our distributor for Mevalon for home and garden applications in Italy. And that was somewhat of an opportunistic situation that developed, but we're very pleased with the outcome of that. And SIP CAM were doing a very good job bringing that product to home growers in Italy. We have a number of active conversations for a number of additional key territories across Europe, Western Europe, Eastern Europe, etcetera, with some very interesting potential partners, and we hope to have much more to say about that through the course of '24 subject to ongoing trials work and, successful commercial negotiations. And then last but not least, and we'll touch upon this later in the presentation when we talk about the potential for our products, but we are pursuing a major label expansion from Mevelyn in France and a number of other countries.

22:01 And we are expecting the French authorization to come through, before the end of the year, subject to regulatory action. And I I will always issue a cautionary note predicting the timing of regulatory approvals for anyone in our industry is a challenge. We give our best estimates as to when we expect these, but quite often, as is the case with many of our situations, this happens a bit later than one might anticipate. So not because of problems, but because of the the complexity of the regulatory process and the fact that the regulators have a very challenging job for them. So moving on to our products, we'll talk a little bit about, you know, some more detailed background behind EDEN and what we're doing and what the the items that form the basis of the the financial results we've just shared with you.

22:53 Our product focus is really based upon two platforms. One is a portfolio of active ingredients that are all derived from plants. So rather than work with synthetic conventional chemistry, as is the the norm, historically, anyway, in the pesticide industry, we are working with natural compounds that are derived from plants themselves that make up a part of a plant's own immune system. We're taking those. We're combining them in in in a very specific way, and we're packaging them with what we have branded sustain, which is our formulation technology, which is derived from yeast. It's a biodegradable solution that is very, very effective at packaging up very, very specific types of chemistry.

23:44 This technology is the basis of all of our commercial products today and serves as a platform for further development, not only for our own products, but also potentially for third party products. So beginning with that basis and those two technology platforms, we have launched our first product, which is a fungicide called Mevalon. It's actually sold under a number of different trade names depending upon the country, but I I won't get into that detail here. It's it's it's far too much. But in any case, that product initially started off as a botrytiside on grapes, as I mentioned earlier, and increasingly, we are expanding its label to include a whole range of different crops and a whole series of new diseases, and we're we're very excited about those developments.

24:30 In addition, our number two product is a product called Cedros. Here, we have partnered thus far exclusively with Eastman Chemical, which is a US based multinational with a crop protection business that's based in Belgium. They have been bringing Cedros forward to a list of a total of 29 different countries across the world, targeting specifically nematodes, which are if you don't know, you'd be forgiven, certainly. These are microscopic parasitic worms that affect a very broad range of crops. They cause all kinds of damage to the root system, and subsequently, they affect in a very dramatic way crop yield and, ultimately, the farmer's profits. Cedros is a very effective product that's being used right now increasingly across Southern Europe, and we also have authorization in The US, and Mexico, and an increasing list of countries around the world.

25:29 We've already talked about the insecticide just a moment ago, the as of yet unnamed insecticide. This is a product that's being developed to target a range of what are called sucking insects, and we'll get into the details a bit later. And then last but not least, of course, is EcoVelix. EcoVelix is a seed treatment that we've, developed in conjunction with Corteva, as I mentioned earlier. And in particular, we're starting off with the use of EcoVelix as a bird repellent to protect farmer yields. And, again, we'll get into the details in a moment, but initially, we're targeting maize. All of our active ingredients and, subsequently, all of our formulations are exempt from pesticide residue limits. This is a key differentiator for our product. We are allowed for organic agriculture in The EU. The products can be used right up to the point of harvest, and we see equal efficacy when compared to conventional chemistry.

26:25 Farmers don't buy products that don't work, and they don't pay a premium for products, generally speaking. But what we are able to do is deliver efficacy on par with conventional chemistry with all kinds of ancillary benefits ranging from the residue limit exemptions all the way through to the organic status and, ultimately, the efficacy that farmers expect. This outlines the typical common denominator type characteristics of our products. We've already talked about a number of those, but I will tackle very quickly, the fact that our products do not have a susceptibility to the acquisition of resistance from the target pests that we're working with, whether they be insects or disease.

27:14 This is something that you might recognize from the pharmaceutical industry in that antibiotic use has led ultimately to the emergence of resistance for a whole range of different bacterial pathogens that are significant for human health. In this instance, exactly the same thing happens with pathogens that are relevant for plant health. And because of the mode of action that our active ingredients and, ultimately, our formulated products rely upon, we don't have issues with this. And so increasingly, we're seeing our products used, excuse me, by farmers as a part of a program to tackle resistance resistance ultimately, and this creates some very significant additional opportunities for us.

28:00 So what we've done is to create for each of our products a page that looks very much like this. This is from Mevelone, our first product, which is a biofungicide. Initially developed to target botrytis on grapes. We launched it in 2016. The table at bottom left hand side shows the number of countries in which mevalon has been authorized over the years, the number of disease targets, and most importantly, the number of crop uses, which Sean referred to at the very start. And you can see we've increased that significantly over the years. Why that matters, that that directly relates to the addressable market for each of the products. So on the right hand side, the bottom right hand side of the table, the top line is showing the overall addressable market, which is saying if we sold a 100% of into the market, these are the numbers that could be achieved.

28:47 Of course, we're not gonna be able to do that. We will be looking at to get a percentage of each of those markets. We split it between the current position, so this is where we do already have regulatory approval. The US is a slightly different color because we've only just achieved regulatory status there. But in the Southern EU, for example, we've had that for a number of years. We see peak sales at around €3,000,000, and we're getting close to that as we stand. The US has very similar opportunity at around €2,800,000. And the Central EU, where, again, we're expecting those approvals to come through, albeit we've already got Poland, That's around a similar number of €3,200,000. And then the rest of the world, we have applications in countries in, like, South America, countries within South America, the likes of Brazil, Argentina, Chile, and so on.

29:34 And there, we see the potential revenue being around 5 or so million euros. So overall, a €15,000,000 opportunity for this product. The current status is already approved in the southern EU, approved in Kenya, Australia, and now New Zealand, and Poland. We're awaiting The UK as well, and we actually are hoping and expecting that to come this year as well. And as I mentioned, some submissions pending in various other parts of the world too. Okay. So I think it's important to highlight how our products perform. And so first of all, we won't get into a lot of detail around this because there is a lot of detail to get into if interested. But the the key point here is that our product is performing in the case of Mevlone and all of our products, in fact, on a basis which is comparable to that of conventional chemistry that's in the market. I I will highlight here that these are, charts from actual field trials. So these are GEP quality trials. They're registration trials. These aren't part this isn't marketing data.

30:39 This is actual data. And and you as you can see in this particular instance, these are average values taken from across 13 replicated field trials in Southern Europe. And, again, what you see is, Mevelyn having a very high level of, control when it comes to controlling the incidence of disease. And, ultimately, to combating disease, again, you see performance roughly equivalent to those of the conventional chemistries. Again, as I mentioned earlier, farmers are not gonna buy products that don't work. We have had, extremely positive responses to our products. One of the distribution partners mentioned to me the other day that, in in a key territory for us, said, yeah, the challenge is to get it into farmers' hands. It's never to keep them using it because at the end of the day, once you've got them on board, they're gonna continue to use the product because it it it is very high performing, and farmers love using it because it's easy to use. It delivers a lot of benefits to the grower, and they don't have concerns they have around many conventional chemistries.

31:48 So now we move on to the second product, the bionemasicide, which we're commercializing in conjunction with Eastman Chemical. The agreement, as Sean mentioned, covers 29 different countries. We recently got The US approval, which is a very important country from this product's perspective.

32:06 We saw good revenue growth in '23 for this product. Overall, the addressable market's around €600,000,000. Again, we're selling in The EU primarily at the moment, but now with The US coming on board, we'll start to see decent revenue further decent revenue growth. But in terms of the peak sales or potential sales in The EU, we're looking at around a €2,000,000 opportunity. The US, you can see, is around three times the size. But overall, around a €14,000,000, opportunity for us, so in line with. Okay. And, again, this is almost a, copy paste from the slide regarding. In other words, these are GEP quality trials, which done on a replicated basis.

32:54 The the point here is that we're comparing Cedros to the standards and also looking at how the untreated products perform. And, ultimately, what you're seeing here is that Cedros is performing in a very equivalent way

33:08 to the standards themselves. In some cases, even a little bit better. The the point here is that we're able to easily compete head to head with conventional chemistry and perform, at least as well whilst delivering a whole series of benefits that the conventional chemistry doesn't bring to the table, such as maximum residue level exemptions, such as very low or as in the case of Cedros, no preharvest intervals and also loss being allowed for use in organic agriculture. And I should highlight that, you know, we're not specifically necessarily targeting organic agriculture, although we do when the opportunity arises. Generally speaking, organic production across Europe is around 10%.

33:54 I'm using very average figure here. What we're actually doing is bringing to conventional growers a product that's been approved for use in organic whilst delivering conventional level performance, and that is, for us, a real differentiator.

34:11 So now we move on to EcoVelix, the bird dependency treatment product. Again, we we signed an agreement back in May 2021, and that was the very start of the development process where we developed started developing, the product in conjunction with Cortiva. The initial markets are The EU plus The UK. We've done numerous, field trials for this product as well as other studies such as caged bird studies to ensure that the product is effective, which I'm pleased to say it very much is. We've talked already or Sean has talked about the temporary approval, which meant that we were able to make a material sales towards towards the very, end of last year. In terms of the overall addressable market, initially, we're looking, as I said, The EU and UK, and we think that the addressable market's around 40,000,000 and that we should see peak sales of around €3,600,000.

35:02 So we're saying at this point, generally, sales, we we look at a 3 year time scale to get to peak sales. It can be quicker. In this case, we think it's sooner because of a market dynamic being that the two well, one existing product is in the process of being banned, and the previous one has been banned. So the market is wide open to products like ours, which is why we got our temporary approval in Italy. In terms of future, then there are other opportunities to expand with the same product into additional crops. And so overall, we think this is around a €34,000,000 opportunity to EDEN, so greater than Mevalon and Sedro's put together. So a really exciting product and really exciting opportunity

35:45 for us. Okay. So, again, again, almost a copy paste. We're, again, comparing ourselves with the conventional product that is the incumbent product and looking at efficacy. And, again, what you see is efficacy that is on par with the current incumbent product in The EU. You know, it's, again, really important to highlight the fact that farmers are not looking for substandard solutions. They're always looking for equivalent performance, with a a sustainable product that has a lifespan in front of it. Unfortunately, for farmers, the incumbent product is under a lot of regulatory pressure. It's under that pressure for a number of good reasons, but the these relate to tox and ecotox profiles, Whereas EcoVelix is a product with a much more favorable tox and ecotox profile with active ingredients that are derived from from natural products that are allowed, the active ingredients themselves, for use in organic agriculture, and the product that, again, you should have subject to regulatory approval, a very, very favorable, use profile.

36:56 And to give a little bit of an example here and to to maybe take a brief step back, some of you may not be familiar with what seed treatments are. So just to to digress on that point very briefly, seeds are a farmer's most expensive input apart from labor and energy costs, etcetera. And so as a result, if a farmer plants a 100 seeds, they want a 100 seeds to come up. I can I can tell you from personal experience, I I reseeded my my back garden recently, and I've been very disappointed with the yield that I've had and have recognized almost immediately that this is gonna cost me a fairly significant amount of money to yet again reseed on the back of of failed, emergence, if you will?

37:43 Imagine amplifying that, you know, a thousand fold, maybe more. And and from a farmer's perspective, it is absolutely essential that all the seeds emerge and produce a crop. Otherwise, their costs get out of control. And for us, that's a real focus, and and that working with Corteva is what we're trying to bring to the market. What you see in the photograph on the right is a series of six trial plots that are run side by side. This is from Southern Germany taken last year by one of our team members. And those six plots that run parallel are evaluating the use of EcoVelix at different rates. And in the case of the area in the outline dashed area without a bird repellent seed treatment so the same maize seed, the same variety treated with a with a seed treatment that didn't contain EcoVelix.

38:41 And this is what you can see happening when there's severe bird pressure. This is a very extreme example, admittedly. Normally, that damage is twenty, thirty, 40% yield loss, somewhere in that range. It depends upon how prevalent and, frankly, how hungry the birds are. In this case, they were very prevalent, and they were very hungry. And the poor plot that didn't contain any bird repellent, you can see what happened. This is why bird repellent seed treatments are added by farmers, or actually the seed suppliers. As a matter of course, they are an insurance policy to ensure that your investment in seed sees a reasonable return. Moving on to Sustain, and and I was happy to see that there were a few questions about this actually in the in the q and a.

39:30 Sustain is, if you recall, the brand that we've given to our microencapsulation technology. It is derived from yeast. It is sustainable. It is biodegradable, and it forms the basis of our commercial products today. But it is absolutely true to say that this technology is applicable to third party active ingredients as well. And so over the last number of years, we've been working with a series of, potential partners working with their active ingredients, and some of those are biological in nature. In other words, biopesticides. A great many of them are conventional. And and the reason we're doing that is because in the EU, there is a a regulation that will see the removal of conventional microencapsulation technology, which is based on polymers.

40:24 This is all driven by EU concerns over microplastics in the environment. And I should say, by the way, that it's not the only the EU that's concerned about microplastics in the environment. We see this concern on a global basis. The EU are one of the first to regulate around it. So microplastics intentionally added to crop protection, fertilizer, consumer product, home care products over the course of the next five to ten years, upon the industry, will be banned. And the reason for that is that they are persistent in the environment and may contribute to decline in animal and human health. So sustain is not susceptible, or subject to that regulation because it's biodegradable. It's naturally derived.

41:09 And I'm happy to say we're working with a number of, well known partners to reformulate their products and bring those to market. The question we get quite often is how long is that going to take? And it's a very reasonable question. Many things in our industry are quite complicated, ranging from formulation science all the way through to regulation and, ultimately, product launch. And we are working very actively to bring products to market. To be very blunt about it, one of the challenges that we've had is that with one partner, we selected a whole series of different active conventional synthetic pesticide active ingredients to microencapsulate. We were successful in microencapsulating a number of those. But as that project wound through its various stages, we saw that a good number of those conventional pesticides were actually removed from the market in The EU. And so, subsequently, we've had to reset our targets. This is an issue that is, for us, on the one hand, very encouraging because it creates opportunities for our own formulated biopesticides.

42:12 On the other hand, it has created a few challenges in bringing some of these these formulations which were quite good, quite successful forward because, of course, the active ingredient that was the subject of those formulations has been removed from the market. So now I'll just talk about our insecticide that Sean referred to earlier. This has been in under development for a number of years. Last year, a huge number of field trials were undertaken by ourselves, but also interested commercial partners. We have a long list of them who are looking to take the rights to the product. Again, as Sean said, it could be on a global or national or regional basis or a bit of a mixture thereof of the national and regional. And we're looking to get to commercial getting to a point where we have commercial arrangements in place, ideally by the end of this year or early next year.

42:59 We're looking to make regulatory submissions towards the end of this year, and that initially will be for The US and EU markets and opportunities. But this, like EcoVelix, is a really big opportunity for us. We see it as around a €30,000,000 opportunity. The EU UK makes up around 6,000,000 of that. The US is slightly larger, but just touching seven, and then the rest of the world at 17, but a really big, pretty exciting opportunity with lots of interest, mainly due to existing products being banned such as the neonicsinoids, which were the group chemistry group that were causing harm to bees. And so those among other products being banned has opened up this opportunity very wide for products like ours. Okay. And here, we just talk a little bit about efficacy as we have in the past, comparing ourselves with the standard. In this particular case, it's a biocontrol standard. So it's a product that is on the market that today is considered to be among the leading or, actually, in some territories, the leading biocontrol insecticide.

44:04 And, really, what we're showing you here without getting in all the details is that we are performing equivalently to this particular product. This is a fairly early set set of data, and I'm pleased to say that as we continue to work through this process, we're seeing increasingly, compelling data coming from this. One of the early, indicators we have with this particular development product is that we tend to have very, wide activity against given targets, meaning that we're able to target multiple stages of their growth and development ranging from eggs to the larval stage to the adult stage. And in the weird wonderful world of insects, there are some other that we wouldn't necessarily relate to normally, such as the scale stage.

44:54 And we we have a broad spectrum of activity against us, and that we see ultimately as a real differentiator for our product. The more growth stages you can target for an insect, the longer the better the longer term, durable, if you will, efficacy that we'll have season to season in terms of reducing the total, insect population, which is something that farmers are always looking to do. So commercial positioning, we've already touched a lot. And in the interest of time, I'll I'll skip through this slide at a rate. We've already touched upon regulatory progress. Again, just to remind everybody that as this list of territories in which we have authorization lengthens, our addressable market grows, and that's critical for us. This slide says commercial footprint. It really should just say regulatory footprint.

45:44 This is the list of or the map of countries in which we have current regulatory clearance for one or both products. We've not included EcoVelix in here yet because that's only a temporary approval at the moment, but we're looking forward to adding that in in due course. Growth opportunities in our strategy, you know, we've articulated this hopefully well for people over the last few years, but a real focus for us in particular since our first significant fundraise in, January well, sorry, March 2020, was to diversify our product portfolio to build our own internal capabilities and, ultimately, to, enhance our ability to develop new products.

46:32 And so we've been very focused on that for what are hopefully obvious reasons. But if you rewind to the time of around 2016 or so, in the very early days of Mevalon, Mevalon was really only authorized to treat one disease on one crop in one region, and that opens us up to a lot of variability. It is not the basis of a of a either a large or a particularly robust business Because year over year, that one disease on that one crop will go from being extremely attractive with a lot of demand to, you know, very little demand, and that's all down to growing conditions. So I'm happy to say that we've grown that one crop use to over a 100 today, and we continue to work on that.

47:17 And as we've done that, the business has grown. More importantly, it's become less and less susceptible to this type of variability. And, also, I should comment on on the idea of growing the team a bit. We have grown from a team of two people about five years ago to a team of about 20 today, and that team is largely composed of development scientists and regulatory personnel developing the product, finalizing the product, registering the product. And now, I'm happy to say that we are strengthening our commercial team with two key appointments that we expect to make before July subject to home office action. Okay.

48:03 In terms of the outlook for growth, and and we did have one question around, in particular, some of these targets that we outlined here. For example, potato blight, potato cyst nematodes, danny mildew, etcetera. We are very focused on expanding the label for our product. Our priorities are very much around the introduction of new products and new disease targets for existing products. We are working in partnership with all the partners that we've identified earlier and a number with whom yet we have to announce deals. But suffice to say, we are very interested in ensuring that our business is diverse, that we have multiple significant partners, and that we are able to continue to grow for the foreseeable future.

48:50 One example of how we've been working with a key commercial partner is Downy Mildew, and this is a good illustration of how a simple label extension for an existing product, in this case, mevalon, can really change our fortune. So a number of years ago, in speaking with a number of potential commercial partners, we were able to identify that there was going to be a true unmet need for a downy mildew side in France and a few other territories based on the fact that an existing product had been removed from the market in the EU by regulators. And so that created for us a real opportunity. We began working to demonstrate the efficacy of Mevalon against downing mildew. And, ultimately, this led to the appointment of a new commercial partner in France, which is Corteva France, to target this market.

49:47 Now in some time in some cases where we've announced that we've had a label extension, these are minor uses. In other words, they're they're relatively easy to get. Sometimes they don't even require a lot of data. In this case, this is a major new use. And whilst it's not as onerous as a as a completely new application for authorization, It is onerous. We needed to put in front of the French regulators two years of efficacy data. We needed to support all the tox and ecotox questions, the formulation stability questions that they have. And we're in the process of doing that now, I'm very pleased to say that do expect this authorization in an ideal world, of course, subject to regulatory action, and that's in the control of the regulators.

50:32 But we do expect that before year end this year. And what you'll see here is that we almost immediately grow the addressable market for Mevalon in France by about a factor of 10. So we're very excited, as is Corteva, to get this product with the expanded label into the market as soon as possible. Significant growth opportunities. We touched on these a little while ago, but, again, these are opportunities where we've done a bit of work already. We've proven the concept that one or several of our products have good activity against these targets such as Potato Blight, wireworm, potato cyst nematodes, black sycodonka, etcetera. We've proven that the product can work at least in a lab scale, if not in the field, in some of these cases in the field as well. And we are now working to add these to the label of existing products. In the case of potato late blight, this may form the basis of a new product for us. We know Mevalon has some activity, but we also have an interest in enhancing that formulation to tackle the type of organism that is the causative agent for potato blight.

51:41 Innovation capacity goes without saying that with EDEN's current organization, we're well positioned to continue to accelerate development and the introduction of new products. It's right to say that four years ago when we expanded the team on the back of the, 2020 fundraise, we grew our internal capabilities significantly. And it's right to say that without that investment, we would not be sitting here today with EcoVelix on the cusp of being authorized as a new product. We would not be sitting here today with Mevalon on the cusp of having a very significant new label extension, and we would not be sitting here with the capability of talking about the insecticide because all of those development activities would have had to been outsourced, and all of them would have taken significantly longer to get to the point that we are today.

52:33 So with that said, I'll turn it over to Alessandro and open up the table. Perfect. Sure. And Alex, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated in the top right hand corner of your screen. But just for the company to take a few moments to view those questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. As you can see, we have received a number of questions throughout today's presentation. And Sean, if I could perhaps hand back to you to read out the questions where appropriate to do so, I'll pick up from you at the end. Yeah. Thanks, Alessandra. Yeah. So we'll endeavor to answer as many of these questions as we can. I think a a good number of them have hopefully been addressed through the course of the presentation either by Alex or myself.

53:20 We'll go through this at the end given time constraints that we might have and that you have. If we haven't answered some, we'll we'll have a little look and and see if we can add answers a bit later. One of the questions we asked that was asked was, you know, given that we have regulatory approvals in in a good number of core regions, you know, what's the next step in terms of getting the product into farmers' hands? And that's something I have to say, given the the business model that we have, we rely on our local commercial partners. So the likes of Corteva, for example, Eastman, Sipcam, Sumiagro, we rely very heavily on them to ensure that they're building demand for the product. And that ability to demand to build that demand and to support the product with farmers, not just ship the product to them, but to actually hold their hand, if you will, and to to build that interest in the product, we very much put in their hands. Now I'm I'm happy to say we haven't touched on it a lot.

54:17 After a good number of years with a with an insufficient commercial team, we are adding in two key new appointments. And and it'll be their job to help build that demand in partnership with our with our commercial partners in each country and to amplify our voice across the region, from a social media perspective, but also, through trade media, etcetera. So so I look forward to walking those critical new colleagues to our team, on or hopefully before July 1. Another question relates to patent protection, and and I hopefully, we touched on that fairly early on in the presentation. But our product formulations are well protected by patents and also something called supplementary protection certificates, which extend the life of our patents. So patents are important for us, and they are generally in our industry.

55:15 What is equally or even perhaps more important is our regulate our portfolio of regulatory clearances and the data that supports those regulatory clearances. That data has data protection associated with it. Typically, that data protection is about ten years. We are going through a process right now of renewing our active ingredients in the EU, and, ultimately, we'll do that in other territories as well. And we've had to invest in the creation of robust new data, which will receive data protection in support of those products. So this is another really strong differentiator for us, and it is something that we offer our commercial products. Patent protected, registration protected, specialty products that are not generic that that, you know, as we've talked about today, perform extremely well.

56:07 What kind of manufacturing capacity do we have? So we we do. Although we we've brought in development registration and and commercial in house rather than outsourcing them, we do still outsource a number of functions, and one of those is manufacturing. Just in the last year, we've added two new qualified contract manufacturers. We're on the cusp of approving a third. And as we become increasingly commercial in The US, it is entirely conceivable that we will appoint another for The Americas. So we have a team in house that is well versed in transferring our technology to new contract manufacturers, and we're gonna continue to rely on our colleagues to help us do that effectively.

56:53 I will say that, you know, we've done a a reasonable job in addressing some manufacturing issues that are developed for one of our products, Cedros, over the past few years. The team has been instrumental in bringing new contract manufacturers up and on stream and doing so in a successful way. A a good question here is what happened to The UK temporary approval of EcoVelix? And you you're right. That's a great question. We did apply for, a temporary approval in The UK. We did so, as a bit of a I'll I'll call it a Hail Mary pass if you're American football fans, if you're not, sorry. Basically, a fairly high risk activity, where we were unclear as to whether we're gonna have all the data that The EU sorry, The UK regulators required.

57:44 The UK requires a set of data that we did not have available at the time that we submitted that. We are actively working on generating that data. We absolutely know that we're going to be able to address the regulators' questions, which pertain to the presence of residues. Most EU member states do not require residue data because our active ingredients are MRL exempt. In other words, they have maximum residue level exemptions. Okay? The UK is slightly different. And as a consequence, we were asked for this data, and we're not going to win the argument with the regulator. We're going to have to submit that data, and we're gonna do our best to do so in the most timely manner humanly possible.

58:33 What is the current market value view on EDEN's share price? Do wanna Yeah. So the the moment we're, like lots of other people, not enamored with the current share price. We do have a research note with our through our broker, Cavendish, where the target price is 20 p. We're certainly comfortable with that number and believe that it could be and should be well north of that as well. But we're doing what we can in terms of the commercial side of the business. We're working hard to get the news flow that we went through earlier to to come to fruition. And we think that some of those events such as the insecticides, such as the home and garden opportunities really will be very meaningful for us. So we look forward to announcing those, and hopefully, those things will help support the pricing and get us to where we all want to be.

59:19 Okay. Another one is, can you tell us about your recent board appointment? Do you wanna talk about that one? Yep. So we recently appointed a guy called Darren McCallon. He's an ED. He will become audit chair after the upcoming AGM. So he was a partner at KPMG for, I think, seventeen years. A really nice guy, but also he has really vast experience with aimless companies and early stage companies where he's taken them all overseen them going through to AIM listings or NASDAQ listings or exits. So, yeah, he's very experienced, and we welcome him to the board. Okay. Are there competing companies? And if so, who are they? Yeah. There there are a number of competing companies, but the the irony of all of it is that some of our biggest competitors are actually our existing or potential commercial partners.

1:00:13 And by that, what I mean is what you know, we don't really see other biopesticides as specifically competitors because in reality, quite often, they do not yet have significant market shares. The the the the products that are out there, the companies that are out there with significant market shares are the companies that are today selling conventional chemistry. And whilst we're we're competing with some of that conventional chemistry, we're also, you know, looking to partner with the people that supply it. And we have demonstrated this repeatedly that we are able to do that. There is no sort of conflict of interest. The suppliers of conventional chemistry are all looking for biological solutions to the same problems.

1:00:58 We are a supplier of biological solutions to those problems. And so forming partnerships with the likes of SIP CAM, who supply a very big portfolio of conventional and biochemistry, Sumiagro, Corteva, you name them, Eastman, etcetera. They're all, you know, potential partners. Are the Incovalex figures solely for maize, or do they include extended uses? So the current figures are for maize, and the extended include additional crops. Okay. And is breakeven likely within the next three years? So we the numbers that we have in the market at the moment show that we have a small EBITDA loss in 2024, but given the the path that we're on, you can reasonably expect that in '25 on the EBITDA level, we will be in a a breakeven or positive position.

1:01:54 Okay. Great. So with that said, I think we've tackled most of the questions, if not all. Back over to Alessandro. Perfect. Sean, Alex, thanks very much for answering those questions from investors. And of course, the company can review all the questions submitted today, we'll publish those responses on the investor meet company platform. But just before redirecting investors, provide you with their feedback, which is important to the company. Sean, could I just ask you for a few closing comments? Yeah. Well, first of all, thank you everybody for your time and for your interest. I do hope we've been able to answer your questions to lay this out in a logical way. There's a lot to get your heads around. There's it's not the simplest or or or least complex business that's out there. The main message is that we've been making very, very good progress over the last few three years in growing our top line, growing the bottom line, and approaching breakeven.

1:02:46 You know, we're pleased with our portfolio of products. We're we're pleased with our portfolio of commercial partners. We've derisked many of the commercial and regulatory aspects associated with our products. And frankly speaking, we're very much looking forward to the future. There there are far more opportunities out there for us than than we have the resource to proceed today. But rest assured, we're pursuing as many of those opportunities as we can. And I'm I'm personally constantly surprised by the number of new opportunities that land on our desks day in and day out. And off after almost ten years of of sitting in this role, I have to tell you that I'm more optimistic, more positive, and more excited than I've ever been. I have been involved in a number of other early stage companies in the past. And, you know, normally in those roles, you're sort of waiting every day for the other shoe to drop. For me, it's exactly the opposite here. You know, every day, I look forward to hearing what new opportunities there are, what challenges we've been able to tackle, and, you know, which next commercial partner we might look to expand our relationship with.

1:03:57 Perfect. Sean, Alex, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected? To provide your feedback in order the management team can better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team, EDEN RESEARCH PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.