Year-end trading update

14 January 2020

Eden Research Plc

("Eden" or "Company")

Year-end trading update

Eden Research plc (AIM: EDEN), the AIM quoted company that develops and supplies breakthrough biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries, provides the following unaudited trading update for the year ended 31 December 2019.

Revenue for the year is expected to be approximately £2.0m (2018: £2.8m) with a loss before tax and statutory operating loss of approximately £1.4m (2018: loss of £0.5m).

Trading update highlights:

• Operating loss for the year of £1.4m is in line with market expectations
• The majority of the £2.0m of revenue was derived from product sales £1.7m (2018: £1.6m), achieved despite unfavourable growing conditions in the Southern EU, with milestone and upfront payments making up the balance
• First marketing authorisations received for Cedroz, the Company's second commercial product which is being marketed by Eastman Chemical
• One-year exclusive Evaluation Agreement signed with Corteva (NYSE: CTVA), the fourth largest agriculture input company in the world, covering seed treatments (post year-end)

During the year, Eden made good commercial progress, with the first marketing authorisations received for Cedroz, the Company's second commercial product, a nematicide which is being marketed by Eastman Chemical in Malta, Belgium and Mexico. Further marketing authorisations are expected during the course of 2020, which will result in an expanded footprint from which Eden will ultimately realise revenue from product sales.

In addition, Eden signed exclusive distribution agreements for the Company's first commercial product, a fungicide marketed as Mevalone, with Sipcam Oxon for Portugal and Benelux and with Sumi Agro Europe in five new markets across central Europe, including Germany and Poland.

The well-publicised hot and dry growing conditions across southern Europe during the peak 2019 growing season negatively impacted the development of Botrytis and this resulted in botryticide usage generally being impacted.  Despite the resulting overall contraction of the botryticide market, product sales revenue increased as a whole compared to last year.  The crop protection business is well-known for its sensitivity to growing conditions, but as the Company's geographical footprint and product portfolio expand, it expects to be more insulated from the variability of the weather. 

Post year end, Eden has announced that its three EU-registered active ingredients, geraniol, eugenol and thymol, have all been approved for use in organic farming, following inclusion in the EU's Organic Production Regulation. This opens up new commercial opportunities for the Company and is relevant to all products that utilise the Company's three EU-registered active ingredients.

The Company has also signed a one-year exclusive Evaluation Agreement with Corteva, which allows Corteva time to evaluate Eden's Sustaineä encapsulation technology and several formulations in specific seed treatment applications in certain major territories and, if successful, will lead to Corteva being granted exclusive distribution rights, on terms to be negotiated.  The overall global seed treatments market is in excess of $5 billion per year, and the opportunities being pursued by Eden and Corteva represent a meaningful percentage of the overall market and will initially target several major crops, including broad acre crops. This represents Eden's first collaborative development efforts in the area of seed treatments as well as the first disclosed collaboration with a global leader in agricultural inputs. Additionally, this is the most advance work done to date on major broad-acre crops.

Sean Smith, Chief Executive Officer of Eden, said: "The Company has made significant progress in 2019 which will ultimately result in an expansion of product sales revenue in new product markets and geographies. Marketing authorisations and commercial partnerships are key to the future success of Eden and so it is pleasing to have been able to announce a number of these during the last year.

In addition to expanding our commercial footprint through the introduction of new products into new geographical areas, it is also important for us to fully exploit the investment we have made in Mevalone thus far, which is what we expect to achieve by having entered into new distribution agreements with Sipcam Oxon and Sumi Agro Europe covering several important new territories in 2019.

Looking forward, we expect to be able to announce further marketing authorisations for both Mevalone and Cedroz as well as progress that is being made with existing and new partners in areas such as seed treatments, insecticides and other applications where the use of our active ingredients and Sustaineä encapsulation technology can bring important benefits to our commercial partners, growers, and ultimately consumers who benefit from sustainable agriculture."

For further information contact:

Notes:

Eden Research is an AIM listed company that develops and supplies breakthrough biopesticide products and natural microencapsulation technologies to the global crop protection, animal health and consumer products industries

Eden's Sustaineä encapsulation technology harnesses the biocidal efficacy of naturally occurring chemicals produced by plants (terpenes) and can be used with both natural and synthetic compounds to enhance their performance and ease-of-use.

Sustaine microcapsules are naturally derived, plastic-free, biodegradable micro-spheres derived from yeast extract. They produce stabilised aqueous suspensions which, are easy to mix and apply, have phased release patterns, are safer for the environment and the crops themselves.

The European Chemicals Agency (ECHA) has proposed an EU-wide restriction on the placing on the market or use of "intentionally-added" microplastic particles. The proposed restriction includes the use of microplastics for agricultural and horticultural purposes, including polymers utilized for controlled-release fertilizers, encapsulated plant protection products (PPPs), seed coatings, and biocides.

By 2025 in the EU, pesticides containing synthetic polymer microplastics are likely to be banned and removed from the market. The only acceptable alternative is the substitution with biodegradable formulations. Reformulated products will need to be evaluated and registered within the five-year transition period.

Sustaine is one of the only viable, proven and immediately registerable solutions to the microplastics problem in formulations requiring encapsulation.

Historically, terpenes have had limited commercial use in the agrochemical sector due to their volatility, phytotoxicity and poor solubility. Sustaine provides a unique, environmentally friendly solution to these problems and enables terpenes to be used as effective, low-risk agrochemicals.

Eden is developing these technologies through innovative research and a series of commercial production, marketing and distribution partnerships.

The Company has a number of patents and a pipeline of products at differing stages of development targeting specific areas of the global agrochemicals industry. To date, the Company has invested in the region of £14m in developing and protecting its intellectual property and seeking regulatory approval for products that rely upon the Company's technologies. Revenues earned by the Company have been modest whilst the Company has concentrated on securing patent protection for its intellectual property, gaining regulatory approvals, identifying suitable industrial partners, and entering into commercial agreements. 

In May 2013, the three actives that comprise Eden's first commercial product, Mevalone, were approved as new ingredients for use in plant protection products by the European Commission ("EC"). This represented a major milestone in the commercialisation of Eden's technology and is a significant accomplishment for any company.  To illustrate this point, one should note that in 2013, Eden's approvals represented 3 of only 10 new active ingredients approved by the EC.

Mevaloneä is a foliar fungicide which has been authorised for sale in Kenya, Malta, Greece, Bulgaria,

Spain, Italy, France, Cyprus, Albania, Portugal and Macedonia.

Cedrozä is a nematicide which has been authorised for sale in Malta, Belgium and Mexico.

Eden was admitted to trading on AIM on 11 May 2012 and trades under the symbol EDEN.

For more information about Eden, please visit: www.edenresearch.com.

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