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LONDON: Baby boomers are behind the explosive growth of the plant health care products sector.

Now Plant Health Care (PHC) has announced its intention to raise up to US$10 million in order to ramp up investment in its core technology, PREtec, and to accelerate new product launches.

The Group, which provides patent-protected biological products to global agricultural markets, conducted the raise through issuing placing and subscription shares at 14p which represents a discount of c.12% to the group’s closing mid-market price on Wednesday.

PHC said the proceeds would also be used to reinforce its team, to support accelerated growth and new market entry including into Europe, and to strengthen its 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.

The group holds a global portfolio of more than 40 patent applications pending worldwide which cover the various PREtec platforms and their use in agricultural applications.

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.

Initial launches of the platform are anticipated to include Brazil Saori™ in 1H21. Earlier this month, PHC said Saori™, the Company’s first product from its PREtec platform to be commercialised, had demonstrated “an encouraging performance” as a seed treatment.

Saori™ is the first PREtec peptide approved in Brazil. PHC, has successfully conducted sixteen field trials using commercial volumes of Saori™ with 34 trials ongoing this season.

Specifically, Saori™, also known as PHC279, was developed as a seed treatment for soybeans in Brazil, a country which is one of the world’s leading soybean producers with more than 38 million hectares (that’s 95 million acres) planted in the current season.

“We look forward with confidence to the initial commercial launch of Saori in 1H21. Outside Brazil, we are preparing to launch PREtec products to markets in the U.S. and other countries, initially targeting markets with opportunities greater than $5bn,” PHC noted.

Launches of products based on PHC279 in the US are targeted in 2022, subject to approval. Meanwhile, the group is also looking to further invest in Europe, the largest market globally for biological products in agriculture, which comprises around 46% of the total market.

While the company intends to pursue regulatory approval for its products, it highlighted to investors that it is also considering how best to access the market as well as to accelerate growth ‘in view of the high regulatory hurdle to access the market and complex regulation.’

PHC said it now expects to report revenue of US$6.6m (2019: US$6.4m), an increase in constant currency of 9% with gross margin constant at 56%. While Covid-19 impacted sales in some markets in 2H20, over the full period PHC commercial business generated a positive EBITDA and was cash generative for the first time, supported by reduced working capital.

Cash as at 31 December 2020 was reported at $4.1m with cash of $2.7m consumed during the full year (2019: $4.8m) and total cash operating expenses of $7.1m (2019: US$7.4m).

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.