RKDA - Earnings call transcript Q3 2018 | Arcadia Biosciences, Inc.

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Operator

Good afternoon, and welcome to Arcadia Biosciences Third Quarter 2018 Earnings Conference Call. Today’s presenters would be Raj Ketkar, President and CEO; and Matt Plavan, CFO. This call is being webcast, and you can refer to the Company’s press release and slides at arcadiabio.com.

Before we start, if you refer to Slide 2, we would like to remind you that Arcadia Biosciences will be making forward-looking statements on this call based on current expectations and currently available information.

However, since these statements are based on factors that involve risks and uncertainties, the company’s actual performance and results may differ materially from those described or implied today.

company’s and, language of again, the recently their this review XX-K filed on can safe in harbor most presentation. You Slide X Raj I’ll President that, now the over With turn and to CEO. call Ketkar,

Raj Ketkar

and Hailey, call the us you, who is thanks Thank today. joining on everyone to

X, of representing outset in technologies portfolio Arcadia-developed months, Soybeans to we to motivated uniquely and progress first bring call, sales products in our successfully quality next tomatoes in the around of are will based XX in these three XX Tolerant three extended Slide products to the our products. Turning customers to to necessary believe products and the all HBX launch that years this different trades shelf taking life Drought these globe. in of upon the months up and development, include three improved Argentina; third at the quarter, we steps Bioseed are crops by excited the wheat Shriram to GoodWheat the achieve Americas; These After India.

the of Now about to our customers. specifics products talk what doing we bring let’s these are to

for Slide product on to substantial pleased Turning the I’m our categories. of report made strategic we X. to very imperatives each major progress

announced innovative collaboration Just wheat yesterday, we for of Mills our technologies. with the development Ardent

received stacked traits approval HBX demonstrated Argentina. building our locations. production of We in our The regulatory continue towards first portfolio we partnerships agronomics wheat. GoodWheat of for and strong We and a advanced product these products We Soybeans trials GoodWheat in whole will enable be taste with across Tolerant supply number in products the products, recently life multiple patented extended Drought commercialization. improved shelf herbicide-tolerant chain. the launches, the our To including

to extended to are We in life organizational our tomatoes And an future hired technical of commercialization success. shelf important our which so milestone India. also essential finally, top enhance the we commercial talent towards achieved capabilities,

a improved life issued partnership to our Yesterday, joint shelf strategic press Mills release X. whole with Slide and we Ardent taste. extended to Moving develop with announcing wheat

is achievement. and exciting XX trait with company, produce milestone number most a wheat Rico. across Mills introduces Canada shelf Ardent enzymatic U.S., The with whole of North the reasons, this Mills premier that For project designed to in is processes a milling the more Puerto than wheat milling whole America’s very by operations bitterness Ardent products. life extend slowing this

As further we a this eat grain. extended grain servings syndrome factors patent our side a whole servings associated XX% has a health whole a decreasing whole diabetes. grains per which risk value missing whole opportunity do the associated strengthen note, release, is with by to of stroke, of the encouraged, U.S. recent has and recommended the to this is you moderate Arcadia disease, day, benefits important consumption of are defined Americans with cluster generally intake, shown intellectual many in for continuing our property seen day, gain grains type-X of and not of the wheat, life cardiovascular have received may obesity, Though Research metabolic covering also press as three three shelf health trait.

innovation, whole flour, some Mills company. $XX of believe food health in whole growing overcoming the a to together, barriers waste, better, wheat Mills to expertise whole according market globally white wheat is is of costs and love be tastier year, as help favor can foods flour the and billion to Arcadia, reduces today. Ardent get supply help food research Ardent X% and foodservice at to Ardent of and Stratistics the whole who value market consumers which grains, taste combined food of increase market companies will which innovator grain, an altered to grain chain the eat. and their reduce whole estimated Mills’ reach, the wheat Arcadia’s lead addition The MRC, growth benefits products, foods drive and trait and this project their adoption white longer intake. to benefits, people customers line In from of and by last wheat demonstrated grain whole whole the these market to allows the with Together, grain grain stores attrition per

that portfolio reduced Now a gluten high-fiber traits GoodWheat we of and development. calls, the and and technologies of a we wheat I’d consumers. non-GM to minute have the includes about under meet walk products Starch quality wheat turning under ingredients exciting other Slide talked products development. X. of various health nutrition are to wheat In The recent Resistant or needs to to number through developing like take products, wheat products innovative

at least development have in products under additional We other several concepts evaluation. two and

And various All and in of spring, wheat, cetera. both available of these GoodWheat be products in feed. they hard applications for be also hard human durum will classes will available et wheat, red winter, food animal like red

we Our into be food with our Mills to commercialized and Shelf breed portfolio. Ardent is great a product partnership the The working technology are to partners we world. around university through that GoodWheat commercial Life working the variety. companies this our trait complement products Extended with will Wheat are in by Together wheat partners being with Ardent, developed

wheat. work with innovations additional to Ardent to We’re in jointly develop continuing also

Slide on as soybeans, shown total that left. $XXX grain serviceable chart estimate largest on these As and terms X, acreage We of for pie on focusing in which market on crops crops is Arcadia and the among are shown the the is produced. grown billion, world’s Arcadia and products the key wheat

right, we of on the of approximately into regions products total of various pie and chart segments believe target billion. potential Now global we our on the as market $X.X crops, as a estimate these we shown the penetration have

market target with only can about of that of impacted billion is it’s the you the large target potentially it the globally. case anticipate or material we to prosecution the $X.X market our of ability a the consider the still have our target share our approximates Arcadia’s of dispute a total business. available Due XX% total collectively, market. number, by we see small Arista While commercialize our a market by grow product When small portion Arista, do impact to to our of affected not our percent potentially on matter, will

throughout GoodWheat successful investors ingredients. commercialize to globe. supply we insight our seed should we Turning the are agreement The nature we the partnerships the partnerships products to food distribution as of prepare the companies Mills needed some of of farmers, as and cultivating, product, Slide millers X. breadth Ardent to for given our for our commercialization with and wheat To are develop building the launch chain companies,

potential not. distribution to products, months be each minimizing four and the our We coming time-to-market or various partnerships around scale are is during geographies. anticipate and to Thus, finding representing continents. companies some GoodWheat sale. our ability our the sales for number total the XX maximizing our seeing wheat underway We the demand cycle testing We into partners evaluating some with now that increasing fruition might expanded XX partners representing important The of food products future between and to for right third months, critically discussions up to active to of from prospective with quarter have our period world.

the secure harvest achieved to the over of partners varieties. completed our of that from these significantly, in trials we continued to for wheat objectives shows increase we timing varieties. to or yield is trials. predict, field geographies quarters. exact the harvest two of Although we we GoodWheat Data difficult closure of We three next few are will GoodWheat Most confident our our

Secondly, good states. demonstrated we agronomic in multiple performance

for pasta, containing and developing recipes popular products taste, they agronomic is this and farmers, GoodWheat quarter, crackers the develop for region food we of in pancake major To that feel. a we waffle specific who produce developing provide will We as products, texture further are end and show in that each The mouth initiated to healthier commercial such to work launch, now is that wheat lab goal packages same are future. growing getting product with muffins, near will quantities prepare flatbreads. GoodWheat a consumers the with to mixes,

for We we in building and prior teams our chain are have of products. to commercial launch stated calls prepare that supply our

team added with production more and major than development commercial experience years our seed agronomy, a development. Grant in quarter, of Arcadia. companies Aldridge new XX commercial has This lead to we at

to of launch Turning the events. Slide in HBX for X. planning In quarter, with third we began Argentina major two the

have launch year, on joint of attended signed when farms the the to very Congress, same reported HBX also we participated HBX planting soon last the growers that our which key successful to HBX As last growers In will in effort, many become Argentina. as quarter, had conference of industry severe growers and These a a AAPRESID their drought of soybeans, the early trials Bioceres, in by This for we major to preparation large XXXX the a was introduce conducting seed is positive planted these XXXX, Verdeca, season, be in many with potentially venture be growers. launch demo results. trials product. Argentina will in Argentina adopters up field showed

America. HBX more HBX from we’re with soybean Argentina the this excited growers. of we Europe, Verdeca, dossier commercialization in years the on with season, major new in HBX technology, traits XXXX quarter, the America, third stacked tolerant soybeans the who towards tolerant technology regulatory in and He launch was him be for herbicide Also to for lead received and first in stacked year. that herbicide HBX in than a we and expands and will in major quarter, In approval products. During market XXXX, authorities completing Tolerant containing lines the of the fourth Early in South planting to industry submit continuing hired of end we experience of traits. of demonstrate XX approval will This the the Argentina for involved to ag regulatory technology quarter, HBX for Martin of Argentina efforts approval we the the are we the commercialization in in HBX coming alone South expect the in the Mariani to Ventura, by Manager has progress the step board. of bring planting General fourth Drought

As USDA for China soybeans. mentioned approvals approval we from reports, we and from awaiting past the have import are of in

required the as have in We expect Tolerant as HBX to soon launch approvals. soybeans Drought we Argentina

trait India. productivity ag made Bioseed, by milestone progress of licensed technology. towards company the breeding on in XX. Shriram important and Arcadia Extended was Bioseed technology Slide life shown shelf field of reached seed major as quarter, commercialization development, a years tomato an private moving has to this is After developed and Another important and

agreement our to payments Arcadia will sales to the Bioseed. on XXXX. do the of total first Bioseed tomato Bioseed expect seed, according milestone material. with introduce to farmers the technology receive end royalties to from We with the by revenues expected sales and We anticipate be not of

However, the tomato. the tomatoes ripen sustainability also it by technology to results firmness they’re on the our the before This the to improve call tomatoes, the I thereby for reduces financial our waste. to handling the the of turn to during the is retains in results reducing on update at spoilage, in an This Arcadia demonstrates to like introducing postharvest transportation quarter. ripen fruit to better Matt that, Allowing color the food an time, vine now and taste. science its picking, while, and and to for value of improving picked, fruit It and the With color the growing technology same market. vine over important would very growers. allows on taste

Matt Plavan

nutrition and to Thank path good achieved everyone. Raj, well quarter indeed, commercialization of having as was, It as a the and our good products Arcadia to our milestones HBX important soybeans. you, health afternoon on for

quarterly to As model on, R&D products, our will results near one a ingredients an of call, on the the we impact to transformation continue our consumer of reflect financial in health touched and from last term our model. out-licensing

revenues not we revenues and will nutritional the As be these trait over arrangement months or commercializations, upon onset contract depending GoodWheat, next to end focus, levels characterized products, new our And lower with research These our and grant grant we projects scaleup new pursuing months. sales as we at projects customers. and/or expect advance expect as it’s the introduce to current these for fees, relevant With have product the agreements longer our and revenues XX no historically. new government HBX like we the strategically us ingredient new our be this research we government this XX specific year, contract of to to and soybeans conclude continue replaced.

more upfront XXXX, pronouncement fully filed as our XXX, under anticipate over model. for today, as licensing XX-K the of as filed And fees our such In longer five into amortize footnote XX-Q addition, significant fees our no in license we with the accounting new can we do QX/X new upfront time. well not implementation and described business revenue ASC of

result, be amortized X license deficit the revenue for of this a out $XXX,XXX the to to into were was January deferred and of quarter full and As reversed charged scheduled XXXX, effective of respectively, year revenues year. $XX,XXX and retain which revenue,

licensing For the of each down this we continue of year, the QX are three revenues a well. through in will reason, trend as first expect quarters

government prior both quarter. buffeting of from XX% in was somewhat grant in licensing and Now revenue during quarter the sales an contract the decreases increase the our and research GLA year

for the impact in of and Turning the three changes lines the revenue on revenue for to see Slide the year-to-date. overall quarter our XX. We net

to new quarter beginning first to to in XX% revenues year the year prior contributing of months. the nine over prior wind prior sources, months a a the are XX% and reduction sources of revenue legacy year nine revenue onset down this third quarter first this our for the reduction Our over

have were $XXX,XXX in first or or quarter when same impact current X%. higher in property. cost expenses continued our intellectual to however, the efforts, quarter our support by period fees due our was in operating incurred to $XX.X primarily the third of XXXX. the to the protecting of we revenue This for by of shortfall Operating containment compensated through XXXX XXXX reduced $XXX,XXX X% for than of total million expenses compared Importantly, this having in nine months the

of common for common million loss the $XXX,XXX. It’s generated With QX liquidity year. both quarter third months of regard offering subsequent equivalents uses this million $XXX,XXX. value that net XXXX operating a and financing that small, hand, will with warrants months as remeasurement of was of PIPE determined PIPE those during each to quarter the income and end together what of nine The XXXX. important for or September income loss the generate initial million cash of capital first support fair about with for and by of resources, to you volatility to QX the the net transactions transactions. Offering this fair the investments totaling income, warrant the quite When was value they for until of difference $XX.X for well netting risk-free loss XXXX and as the $X the XXXX. means million the the as loss attributable warrant operating our liabilities $X is Registered stockholders $X.X of warrant loss ins outs third value recognition bolstered in $XX.X liabilities recognition in net and about other a Direct of million As of note expense income the attributable loss net million totaled associated noncash to income increase variables, from million net this $XX.X remeasurement liabilities income using million, and Scholes-Merton, the between year for the quarter the net $X.X the one, the was stock our million, $X.X loss quarter. and take $X.X of XX on will will against in while $XX.X and price And increase A generate liability actually the rate. nonoperating financings cost interest decrease of income, and in nonoperating the Black million and an the of several These Net that to the nine year-to-date stockholders at $X expense. included including first and The revalued input value the all either exercised million, of consistent loss XXXX is be the expired. short-term are substantially over cash which

of used And increase the nine $XX.X net the million, in a of from Our million our was net $X million. was the nine XXXX cash during used cash activities months for $XX.X the XXXX. operating quarter first months used for slight first

first financial Raj. our and up wraps you for today. for highlights time months to that Back XXXX. of Now attention you, your the nine Thank

Raj Ketkar

Thanks, Matt.

just towards Before really progress we we during for which results our of made to our like get the to products. XXXX, your third commercialization questions, summarize key I quarter good of

announced of developed We said for on completed received extended we on shelf to adds I will the product to up production would the HBX last products. initiated herbicide soybeans; the anticipate this of earlier, exciting the expand stacked our TILLING is which technology. milestone the for our trials, shelf the Argentina of food by containing signing development intellectual with technology on GoodWheat Mills, an wheat tomatoes, for Drought India. data reached commercially We life tolerant the this the packages of XX to globe foods to testing our HBX. preparing wheat, year’s these wheat. growers in path and for important portfolio As regulatory market provide trait, companies agronomic months of GoodWheat via Argentina extended U.S. Based commercialization which positive in HBX And relating GoodWheat; are with Ardent in Tolerant are an property of in introducing overall life testing which XX from our approval growers [indiscernible] launch life developing three the farms to We tomatoes are commercialization non-GM their technology we received year. now popular products: months. recipes growers HBX and to towards the extended in We development launch added trials next for the who good We patent their of and harvest and collaboration around

and our we the questions our journey turn quarter. to health about in now. to business, With positive your results that, continuing forward to call ingredients look excited reporting I’d like new next and the over We’re nutrition

Operator

from Thank of you. [Operator Ram Wainwright. comes H.C. Instructions] Our first Selvaraju question

now is line open. Your

Robert Burns

the to to on you Thank is guys greatest questions. to I of example, just your Rob Do longer Reduced Resistant being, we have if for two, provide Ram. forward? taking moving the – expect when do commercial model? Starch, value for as two, first This for number my the one life? you Gluten varieties, I expect additional commercial Hi. And or have may, your wheat shelf which you for granularity to then

Raj Ketkar

So let again, me – your please, Rob? question, – state earlier you your could

Robert Burns

expect granularity as have particular, we to to – model, packages move – can commercial developing that you’re your economic the see Argentina? well additional When ongoing in in the Yes. as as

Raj Ketkar

I the So really talked that on think how to developing. what are was we agronomics the provide we grow about packages that our we are These product. agronomic farmers to

commercial as far ones we’re for models, so Bioceres. the the Argentina, with in Argentina, example, developing – developing that partner As those we in our for are

XX next expecting, would months, we are in some said, from We months. the to months product a that China anticipating. launching for XX are we to XX XX approval That’s months next time as the we in Argentina what get the in

XX acres. with model year, So next some of susceptible that our we think we would have about calls, that But total past of I million that forth you the the would Rob, to Argentina know what stated as conditions said, drought we around more so – to again, XX% so of something information, granularity, And we acreages represent I are like this of the have acres. percentage terms – over translates think, acres in and the in in Argentina terms that in penetrate. of staying

that’s So it’s out there. large a market fairly

Argentina. to there company first the in a drought product be tolerant launch to expect We

we basing and provide forward. more what So I can think go that’s as are models granularity on, we we our

Operator

Thank you.

Smith Investing. next question Performance for of Center Robert comes Our from

is now line Your open.

Robert Smith

my Thanks agreement robust isn’t you. questions. Why as more far for the go? Thank taking as prospects Bioseed

Raj Ketkar

tomato the large, of in a important in India seed a fairly are they that crops. Well, fragmented. seed. company are India. number and There is in Bioseed seed market sell participate companies is extremely different of dozens They tomato fairly

them years the several put So to we their to technology into for ago varieties. it licensed them

And to launch We’ll that couple do of been royalty. different they they our provide we The as – it. tested essentially to so fees three in trials, results they would access, to them getting ready specific introgressed have Does provided into after be And from very that. have got varieties. model which be have scale, question, that fees had we or they the they they are they they And your get access And milestones. it soon them two large commercialize, we’ll will milestone – in take a They the the that after then testing. farmer expect, now. that, they then fees was access that we varieties would reach answer we far, feel genes the getting Robert? order technology now for

Robert Smith

can well. take technology you So this as elsewhere

Raj Ketkar

Yes, Yes. we can.

Robert Smith

seeking And so so? you actively do are to

Raj Ketkar

Yes, we are.

their not have the the seed to in it into into we’re the because here to divulge liberty that at seed. of licensed – a they’re very U.S. early seed Unfortunately, the We – phases company trait point are this we in at introgressing

Robert Smith

And what opportunity would be? market that

Raj Ketkar

doesn’t I up tomato because the India large is for It’s the early to think that opportunity. this And a That a it we us. that talk in pretty We and U.S. at think started. the fairly testing that’s as about seed market But that introgression game, in – show but we’ll opportunity has time opportunity. of get an good process in just in is definitely be not more – large. commercialization. it’s it’s will closer so charts – our the

Operator

any Thank question-and-answer I you. back for session. commentary. to turn Ketkar call the over concludes this to closing Ladies and gentlemen, like today’s Raj would

Raj Ketkar

free forward look In questions, further us again, Thank call. or and during feel speaking Thanks, everyone us you of conference continued contact Arcadia. outside. our for Thanks, and joining Hailey. year-end the you. to meantime, call the interest e-mail you your if with to support today, We for have

Operator

and day. you thank today’s you gentlemen, may and Ladies a have concludes all Everyone, participating in program, for great This today’s disconnect. conference.

Arcadia Biosciences (RKDA) 10 Nov 182018 Q3 Earnings call transcript