Plant Health Care PLC New Technology Update (3523R)

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RNS Number : 3523R

Plant Health Care PLC

28 February 2019

PLANT HEALTH CARE plc

("Plant Health Care" or the "Company")

New Technology Update

Plant Health Care(R) , a leading provider of novel patent-protected biological products to global agriculture markets, is pleased to provide the following update on the product pipeline in its New Technology business, following the recent completion of a strategic review of the prospects for PREtec (the Company's novel Plant Response Elicitor Technology platform):

Highlights:

- Plant Health Care is moving lead PREtec peptides forward into fast-track product development, with anticipated entry into first markets as early as 2021.

   -      These products will be addressing markets worth in excess of $5 billion. 

- The Company continues to engage with evaluation partners; seven companies have ongoing evaluations of PREtec or are planning to initiate field evaluations in 2019.

- The Company intends to sell some products directly to distributors, to reach market more rapidly and deliver higher margins for the Company. Discussions have been initiated with potential partners in the US and Brazil.

- Progress with production methods has advanced, providing further evidence that PREtec cost of goods should provide a competitive advantage over 3(rd) party products; margins are expected to be comparable to those of Harpin <ALPHA><BETA>.

- First regulatory approval is expected in the US before the end of 2020 and in Brazil in 2021/22.

PREtec (the Company's novel Plant Response Elicitor Technology platform) is a novel, environmentally friendly approach to protecting crops, based on peptides derived from natural proteins. These proprietary peptides are stable and compatible with mainstream agriculture practices. By activating the innate growth and defence mechanisms of plants, PREtec peptides lead to higher crop yields and better protection against disease and environmental stresses such as drought. The Company has established substantial intellectual property around PREtec, with more than 40 patent applications filed.

Plant Health Care has recently completed a strategic review of the first product pipeline emerging from PREtec and of the routes to market for those products. The target markets include corn and soy (yield increase through seed treatment), control of Asian Soybean Rust (ASR) and other diseases, sugarcane (yield and disease), enhanced plant nutrition, and nematode control in fruit and vegetable crops; most of the larger target markets are in North and South America. These markets are very large in terms of both disease control and yield enhancement. As shown in the chart below, the Company's products will be addressing markets worth in excess of $5 billion.

 
 Crop: Indication       Country: Available   Market Size: Value, $ 
                         hectares 
 Corn & soy seed        US: 33M ha           >90% of US corn and 80% of US 
  treatment: Yield       corn, 36M ha         soy receive seed treatments. The 
  increase               soy                  U.S. seed treatment market was 
                                              worth approx. $1.84 billion in 
                                              2016 and is expected to exceed 
                                              $3.04 billion by 2022. 
                       -------------------  ---------------------------------------- 
 Vegetables: nematode   US: 1.1M ha          US crop losses due to nematodes 
  control                                     is est. $8 billion annually. Estimated 
                                              yield loss due to nematodes has 
                                              historically been between 10-20% 
                                              in economically important vegetable 
                                              crops. 
                       -------------------  ---------------------------------------- 
 Soybean: Disease       Brazil: 36M          In 2017, $1.75B was spent in Brazil 
  Control (ASR)          ha                   on soybean fungicides and the 
                                              global fungicide market was worth 
                                              an estimated $15 billion. 
                       -------------------  ---------------------------------------- 
 Sugarcane: yield       Brazil: 9.9M         >628MT harvested sugarcane forecast 
  increase and           ha                   for 2019, and Brazil expects to 
  disease control                             export 23.6MT of sugar. The 2017 
                                              export crop was worth over $11.4 
                                              billion. 
                       -------------------  ---------------------------------------- 
 Row crops: enhanced    US: varies           US market size was estimated >$950 
  plant nutrition        by crop and          million in 2014 with projected 
                         geography            annual growth of 8.5% to 2023. 
                       -------------------  ---------------------------------------- 
 

For each of these target markets, we have identified a lead peptide and a back-up. The lead peptides for these target markets include PHC279, which is the subject of our first regulatory filings, and other peptides selected from the Innatus 3G, Y-Max 3G and T-Rex 3G platforms.

Strong progress has been made in developing efficient production methods for PREtec peptides. During 2018, the target production efficiency for PHC279 was comfortably achieved. Work on production methodology for other peptides is also promising. This gives the Company confidence that PREtec peptides will be cost-effective in the field and provide a competitive advantage. Preliminary estimates suggest margins could be comparable to those which the Company currently enjoys with Harpin <ALPHA><BETA> (in excess of 65%).

As previously announced, the Company has made submissions for product regulatory approval in the US which is anticipated to result in first registration during 2020. Registration in Brazil will follow.

Work continues with evaluation partners to develop both technical profiles and routes to commercialisation. The Company expects to access the market through Technology Licences for several products. However, following the review of its commercialisation strategy and recognising the growing strength of the Company's commercial relationship with distributors, some of the products are now expected to be commercialised directly with in-country distribution partners. This sales route will take products to market more rapidly and is anticipated to result in higher margins being retained by the Company.

Chris Richards, Executive Chairman & Interim CEO, said: "We are excited about the potential for the product pipeline now coming out of our PREtec technology. These products are targeting very large markets, which have the potential to generate substantial revenues for the Company, which are additive to our existing Harpin <ALPHA><BETA> sales. Further products will follow from the PREtec platform. With product launches feasible as early as 2021, we are moving to complement Technology Licensing with direct sales for some products to enable us to launch products significantly more quickly. We will update the market periodically on product development, as we progress towards launching our first products from the PREtec platform."

For further information, please contact:

 
 Plant Health Care plc                                Tel: [phone] 
 
  Chris Richards, Executive Chairman and Interim 
  CEO 
 Arden Partners plc (Nomad and Broker)                Tel: [phone] 
  John Llewellyn-Lloyd / Dan Gee-Summons (Corporate    5900 
  Finance) 
  Fraser Marshall (Equity Sales) 
 

Company website: www.planthealthcare.com

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February 28, 2019 02:02 ET (07:02 GMT)