New research from UK-based institute Arden Partners has highlighted the ‘significant value’ in Plant Health Care’s (PHC ) technology platform, PREtec, within the global agriculture industry.

PHC, which provides patent-protected biological products to global agricultural markets, announced its intention to raise up to US$10 million on Thursday through an oversubscribed placing at a price of 14p, a c.12% discount to its closing mid-market price on Wednesday.

The funds will be used to accelerate the development of products from the PREtec platform, seek regulatory approval in Europe, support the expansion of the group’s commercial business which it said is ‘performing very well’, as well to strengthen PHC’s balance sheet. 

The group’s PREtec technology platform works by inducing natural defensive and metabolic responses in crop plants, helping to reduce harm from stresses during the growing season. 

To date, the company has invested more than US$20 million over the last eight years into its PREtech technology platform, with the first commercial product launch anticipated in 2H21. 

In a research note released yesterday, analysts at Arden said the group’s recent newflow indicates that its PREtec technology is continuing to gain traction, and with further funding now secured, ‘investors should focus on execution and growth across the Group’s portfolio.’

It said recent research on PREtec confirms ‘huge market opportunities for the products with demand built on robust, demonstrable efficacy and excellent sustainable credentials which align very well with the global ag industry’s current practices and overall direction of travel.’

It said its discussions with PHC’s distribution partners indicate excellent support for the products with many medium-term expansion opportunities built on patented technology.

As a result of PHC’s recent positive newsflow, Arden has updated its earnings estimates in order to reflect the new equity and increased expenditure, as well as upgraded its medium-term revenue forecasts which it said reflects the added investment and expenditure. 

The research firm said it anticipates increased visibility through 2021 as the exact phasing and targeting of PHC’s resources takes shape. Meanwhile, it highlighted that the increased expenditure ‘should ultimately raise value creation in the medium term’ in its view.

Shares in Plant Health Care have increased by nearly 30% since the beginning of 2021. The stock saw a strong start to the year after PH279 (now known and branded as Saori) became the first product from its PREtec platform to receive federal approval for sale in Brazil. Shares in the stock ticked up by 3.74% this morning to 18.31p following the fundraising.

London-listed Plant Health Care is a leading provider of proprietary agricultural biological products and technology solutions focused on improving crop performance.

Its commercial business is driven by sales of Harpin αß, a recombinant protein which acts as a powerful biostimulant, promoting the yield and quality of crops. PHC sells the proprietary soil treatment Myconate in selected countries and sells both Harpin αß and Myconate through specialist distributors globally. In Mexico, PHC distributes third-party biological products.

PHC utilises its PREtec platform to generate numerous products and it is focusing on three products targeting very large market opportunities with a value of more than $5bn.

The Group said these products are currently under evaluation with six potential commercial partners. Meanwhile, PHC also continues to evaluate further candidate products from its robust pipeline of development candidates for additional crops and indications.

In a trading update released in January 2021, the Group reported robust in-market sales growth of Harpin αβ with in-market sales in Brazilfor sugarcane coming in at three times those of 2019, while in-market sales to corn came in at 1.8 times higher than the prior year.

Meanwhile, the Group hailed its progress in bringing the first products from the PREtec platform to market. It highlighted it is planning for initial commercial launch in Brazil during the second half of 2021.

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