With increased resistance to chemical pesticides set to be one of the biggest problems facing farmers, agriculture tech company Bio-Gene (ASX: BGT) has been called upon by insecticide manufacturer Evergreen Garden Care to develop natural products in the E.U., U.K., Australia and New Zealand.
The partnership comes in the form of a commercial development agreement whereby Bio-Gene will supply their novel proprietary natural technology and data – including Bio-Gene products Flavocide and Qcide – to Evergreen for product development purposes.
Evergreen currently owns a large portfolio of insecticide products that includes Scotts®, Osmocote®️, Miracle-Gro®, Substral® and Fertiligene®.
Increasing resistance to current products in the market is promoting higher use of dangerous chemicals to counter the resistance, which in turn has raised concerns over the toxicity profile of many existing products.
The Bio-Gene products, however, are labeled as the next generation of novel insecticides that function differently at a biological level to have been developed using technology based on a naturally occurring class of chemicals known as beta-triketones.
This new commercial partnership comes following test work undertaken between the two companies since April 2020.
“Whilst the breadth of studies has been limited at this early stage, current observations have given both parties the confidence to proceed with a commercial agreement and the next phase of end-use product development,” said Bio-Gene CEO, Richard Jagger.
“This program will focus on specific formulation development for mosquito and ant control, as well as expanding testing to explore a number of key consumer applications for both Qcide and Flavocide.
“Bio-Gene will supply Evergreen with the Active Ingredients Flavocide and Qcide, with Evergreen having the responsibility of developing and registering end use products, which will complement Bio-Gene’s data procurement and application for the Active Ingredient registration”
Under the terms of the agreement, Evergreen will pay a licence fee to Bio-Gene as well as milestone payments to enable the ongoing development work. Upon launch of a commercially viable product, Evergreen will then pay Bio-Gene an undisclosed royalty on all product sales that contain Bio-Gene’s technology
“We are excited to be partnering with Bio-Gene to develop natural consumer pest control products based on molecules with a new Mode of Action. The early work we have done suggests this natural technology could be the basis of truly differentiated and efficacious products that will be essential to meet the needs of consumers in our key markets,” said Evergreen Global Innovation and Product Director, Ann-Marie O’Riordan.
Annual sales of natural mosquito and ant control products are estimated to generate more than USD $600m globally, highlighting the hugely lucrative market of effective products that can overcome insect resistance to those currently on the market.
BGT shares responded well to news of the Evergreen partnership to reach a high of $0.18 in morning trade which represented a 24% increase on their previous $0.145 close.
Alfred Chan is a Business Reporter at The Sentiment specialising in ASX-listed small cap companies, a bloodstock enthusiast and former equities analyst.
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