Arcadia Biosciences Inc (NASDAQ;RKDA) swung to a profit in the third quarter as it pushed ahead with its collaboration with Ardent Mills, the largest wheat milling company in the US, and reported other significant business advances.
In the three months ended September 30, the agricultural food ingredient company’s net income hit $4.5 million, swinging from a loss of $4.5 million in the corresponding period last year. The jump in profits was due to one-time items.
Revenue, meanwhile, came in at $370,000, which handily beat Wall Street analysts’ consensus estimate of $260,000, but fell from the year-ago quarter when it reported revenues of $589,000 due to the wrapping up of government grants in 2017.
Over the next 12 to 36 months, as Arcadia focuses more on health and nutritional products, the Davis, California-based company expects revenue from government grants, research contracts and license revenues to be replaced by product and trait revenues.
In a statement, Raj Ketkar, president and CEO of Arcadia, said the company is positioned to commercialize its wheat products portfolio thanks to its collaboration with the wheat milling company Ardent Mills.
READ: Arcadia Biosciences teams up with Ardent Mills to develop and bring new wheat varieties to market
The first leg of the partnership between the two companies will focus on extending the shelf life and improving the flavor of whole-wheat products.
Using patented Arcadia trait technology, the storage life of Ardent Mills’ whole wheat flour can be extended by slowing the enzymatic processes that reduce shelf life. Because milled flour from wheat carrying Arcadia’s trait technology oxidizes more slowly, it cuts down on the bitterness associated with most whole wheat products.
Arcadia plans to launch up to three different traits in three crops around the globe over the next 12 to 18 months, “driving value for consumers, growers, food manufacturers and Arcadia investors,” said Ketkar.
Arcadia’s achievements in the quarter were varied. In the late third quarter and early fourth-quarter, Arcadia completed its 2018 GoodWheat Harvest, featuring the scale-up of Resistant Starch GoodWheat and the first field production of its Reduced Gluten variety.
It also reached a milestone in its latest quarter with its partner Shriram Bioseed in India, which is breeding its extended-shelf-life tomatoes. Its non-GMO trait allows tomatoes to fully ripen on the vine yet remain durable enough to survive the packing and shipping process, which cuts back on post-harvest damage and costly waste. Field trial results over multiple seasons show improvements in field yield, firmness, shelf life and color development.
The new hybrid tomatoes are in the testing phase and Shriram Bioseed expects to launch them next year.
In another advance, Verdeca, a joint venture between Arcadia and Bioceres SA, recently received approval in Argentina for its HB4 drought-tolerant trait stacked with herbicide-tolerant traits in soybeans. The novel traits will help Argentinian soybean farmers by protecting yields under stressful climatic conditions, without dispensing with weed control.
READ: Arcadia Biosciences’ joint venture Verdeca wins approval from Argentina for drought-resistant, herbicide-tolerant soybean
“This expands the market for HB4 technology in South America and will enable increased field testing and seed production in Argentina,” Arcadia said in its press release.
Based in Davis, California, Arcadia develops high-value food ingredients and nutritional oils that aim to meet demand for healthier diets. The company’s agricultural traits are being developed to enable farmers to be more productive and minimize the impact of agriculture on the environment.
Arcadia shares slipped 5.8% in Wednesday’s after-hours trading session to $4.05.