Arcadia Biosciences (RKDA) Announces Sale of Resistant Starch Durum Wheat Trait to Corteva Agriscience (CTVA)

Rhea-AI Summary

Arcadia Biosciences (RKDA) announced the sale of its non-GMO Resistant Starch (RS) Durum Wheat trait to Corteva Agriscience for $4 million. This transaction involves the transfer of 24 patents across 20 countries. Arcadia retains the right to continue using the RS Durum Wheat trait in its GoodWheat product line. The sale aims to monetize Arcadia's wheat technology and strengthen its balance sheet, facilitating future strategic transactions. Corteva and Arcadia's collaboration since 2017 has focused on developing and commercializing RS Durum, a wheat variant with up to 94% amylose, offering health benefits like improved gut health and a lower glycemic index.

Positive

• Arcadia receives a one-time payment of $4 million.
• Retains the right to use RS Durum Wheat trait in the GoodWheat product line.
• Strengthens financial position for future strategic transactions.
• 24 RS Durum Wheat patents sold across 20 countries.
• Offers potential health benefits such as improved gut health and lower glycemic index.
• Long-term collaboration with Corteva Agriscience continues.

Negative

• No recurring revenue from the RS Durum Wheat trait sale.

Insights

Financial Analyst

Arcadia Biosciences' sale of its Resistant Starch Durum Wheat trait to Corteva Agriscience results in an immediate cash infusion of $4 million. This transaction significantly impacts Arcadia's cash flow and liquidity, providing them with capital to pursue strategic transactions and other growth opportunities. From a financial perspective, this is a positive move, as it not only shores up their balance sheet but also allows them to retain the use of the trait within their existing GoodWheat portfolio.

However, investors should consider whether the one-time payment fully captures the future potential value of this technology, particularly given the global demand for health-oriented food products. The retention of the trait for the GoodWheat portfolio mitigates some of the risk, but Arcadia's ability to effectively leverage this into long-term revenue streams remains a key point to monitor. Furthermore, the sale of patents reduces potential future licensing revenues from other parties.

Agricultural Market Expert

The sale of the Resistant Starch Durum Wheat trait to Corteva Agriscience reinforces Arcadia’s strategic shift towards monetizing its technology. Corteva's acquisition of 24 patents across 20 countries means that the advanced breeding techniques and resultant high-fiber wheat will have broader, potentially global, market penetration. This move positions Corteva to capitalize on the growing consumer trend towards high-fiber and low-glycemic index foods, which are essential for managing health issues like cardiovascular disease and type 2 diabetes.

For retail investors, it is important to note that Corteva’s established infrastructure and market reach could accelerate the widespread adoption of this wheat variant, potentially boosting demand and market share for products under Arcadia’s GoodWheat brand. This strategic alignment could result in a win-win situation where Arcadia benefits from increased market acceptance and demand without bearing the entire burden of commercialization.

-- Company advances monetization of wheat technology with one-time payment of $4 million --

DALLAS--(BUSINESS WIRE)-- Arcadia Biosciences, Inc.^® (Nasdaq: RKDA), a producer and marketer of innovative, plant-based health and wellness products, announced today it has sold its non-GMO Resistant Starch (RS) Durum Wheat trait to longtime partner Corteva Agriscience. Under the terms of the agreement, Arcadia will receive $4 million and retain the right to continue using Resistant Starch Durum in its GoodWheat portfolio of wheat products, including pastas and mac & cheese. Corteva will acquire 24 RS Durum patents in 20 countries.

Arcadia and Corteva began collaborating in 2017 when they signed an agreement to develop and commercialize RS Durum in North America. Since then, Corteva has been introgressing the RS Durum trait into elite germplasm lines in the company’s pipeline.

Arcadia’s high fiber RS Durum Wheat trait was developed using advanced non-GM breeding techniques resulting in wheat varieties that contain up to 94 percent amylose, a carbohydrate molecule that is less vulnerable to digestion. Resistant starch offers significant health benefits, particularly in the management of gastrointestinal health, cardiovascular disease and type 2 diabetes. Because it is digested more slowly, it has a lower glycemic index and acts as a prebiotic that improves gut health.

“Wheat is a staple crop worldwide, and consumers are looking for ways to enhance their nutrition through natural sources. As a leading global agricultural company, Corteva is an ideal partner to bring this trait to farmers globally,” said Stan Jacot, president & CEO of Arcadia. “This transaction enables our long-standing collaboration to continue, with Corteva eventually supplying seed that farmers could grow for the GoodWheat brand, while the financial component strengthens our balance sheet, allowing us to pursue strategic transactions.”

About Arcadia Biosciences, Inc.

Since 2002, Arcadia Biosciences (Nasdaq: RKDA) has been innovating crops to provide high-value, healthy ingredients to meet consumer demands for healthier choices. With its roots in agricultural innovation, Arcadia cultivates next-generation wellness products that make everybody feel good. The company’s food and beverage products include GoodWheat™ pasta, pancake mixes and mac & cheese and Zola^® coconut water. For more information, visit www.arcadiabio.com.

Note Regarding Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including statements regarding the Company’s collaboration with Corteva and pursuit of strategic transactions. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, and reported results should not be considered as an indication of future performance. These risks and uncertainties include, but are not limited to, the risks set forth in Arcadia’s Annual Report on Form 10-K for the year ended December 31, 2023 and other filings. These forward-looking statements speak only as of the date hereof, and Arcadia Biosciences, Inc. disclaims any obligation to update these forward-looking statements.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240514536599/en/

Arcadia Biosciences Contact:

T.J. Schaefer

ir@arcadiabio.com

Source: Arcadia Biosciences, Inc.

FAQ

What is the value of the deal between Arcadia Biosciences and Corteva Agriscience?

Arcadia Biosciences will receive a one-time payment of $4 million.

What does Arcadia Biosciences retain after selling the RS Durum Wheat trait?

Arcadia retains the right to use the RS Durum Wheat trait in its GoodWheat product line.

How many patents are involved in the Arcadia and Corteva deal?

The deal includes 24 RS Durum Wheat patents across 20 countries.

When did the collaboration between Arcadia Biosciences and Corteva Agriscience start?

The collaboration began in 2017.

What health benefits does the RS Durum Wheat trait offer?

RS Durum Wheat offers benefits like improved gut health, a lower glycemic index, and better management of gastrointestinal health, cardiovascular disease, and type 2 diabetes.

What is Arcadia Biosciences' stock symbol?

The stock symbol for Arcadia Biosciences is RKDA.