Sacramento-based Arcadia BioSciences, a plant trait biotech company, has filed a registration statement with the Securities and Exchange Commission for a proposed $86 million IPO led by Credit Suisse, JP Morgan, and Piper Jaffray. The company will trade on the NASDAQ Global Market under symbol RKDA.
Founded in 2002, Arcadia is developing biotechnologies for the $39 billion seed market with the aim of increasing yields for major crops such as wheat, corn, soybean, rice and sugarcane. The company reports that they currently have more than 50 products in development that incorporate Arcadia traits, one that is completing its regulatory process and one that is currently on the market.
Rather than taking the seed to market themselves, Arcadia licenses out their technology to major seed and product companies to develop and commercialize products using their traits. Arcadia’s first product is Sonova 400 GLA safflower oil, which is a key ingredient in several branded nutritional supplements sold through GNC and other major retailers.
GMO crops are big business, and now represent over 90% of the major crops in many countries. The first generation GMO crops focused primarily on traits to deal with biotic stresses such as weeds and insects, and pests. This first generation looked to organisms such as the bacteria Bacillus thuringiensis whose genes produce a protein that are poisonous to certain insects and pests and are widely used in organic farming, and inserted those genes into plants so that the plant could also produce this insecticide. However, this first generation of crops have been criticized for not fulfilling their promise of increasing yield potential.
Arcadia aims to bridge this gap by focusing on abiotic focused traits that protect a plant against factors such as heat, drought, flooding, and nutrient availability. Arcadia argues that traits dealing with abiotic stress can have a much greater impact on crop yield than traits designed to deal with biotic stresses. If genes are taken from other plants, rather than bacteria or animals, and are not producing pesticides then this also may be more palatable for anti-GMO activists.
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Arcadia is applying for the IPO under the new JOBS Act rules that lower the regulatory hurdles for ’emerging growth companies’ with less than $1 billion in annual revenue. The company reported net losses $16.3 million in in 2014 and $10.3 million in 2013, with revenues of less than $5 in each of the last two years.
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