Plant Health Care reported an increased loss for the first half of 2010 but agreements with Syngenta and the government of Brazil provide reasons to be more positive about the future.
Revenues rose from $4.95m to $5.64m in the six months to June 2010, while the loss from continuing operations moved ahead from $3.87m to $4.68m. A land reclamation business has been sold for $385,000 and that made a small loss.
Sales of Monsanto’s soybean seeds treated with PHC’s Harpin technology were disappointing because it was charging too high a price. That meant that Monsanto did not need to reorder Harpin this year. Monsanto has adjusted its marketing strategy and PHC is hopeful that this deal will start to generate revenues again.
PHC has secured a non-exclusive agreement with Syngenta for the supply of Harpin for use in its weed killing sprays for glyphosate-resistant crops. This is a market that PHC has wanted to enter and there is nothing to stop it doing deals with Syngenta’s rivals. The next step is a deal with a fungicide manufacturer.
Legacy Seeds is developing a combination of Harpin and Myconate for its alfalfa seeds. This deal could provide milestone payments for PHC.
In April, PHC bought all the outstanding intellectual property rights relating to Myconate from Bayer. The conclusion of this partnership left PHC free to get involved in field trials for the evaluation of the efficacy and economic feasibility of Myconate. Brazil produces more than one-third of the world’s soybeans and is an important market for PHC to get into.
The second half of the year is always stronger than the first but house broker Evolution still forecasts an increased loss for 2010 – although it will be lower than the loss in the first half of 2010. PHC has $13.5m in cash and investments so it has enough cash for its immediate needs.
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