Arcadia Biosciences announces first-quarter 2017 financial results and business highlights

May 10, Arcadia Biosciences, Inc., an agricultural technology company that creates value for farmers while benefitting the environment and enhancing human health, today released its financial and business results for the first quarter ended March 31, 2017.

Revenues for the quarter were up 19 percent to $1.0 million, compared to $852,000 for the first quarter of 2016. The increase reflects higher contract and grant revenue, primarily the result of a new agreement. Operating expenses for the first quarter were $5.0 million compared to $5.8 million for the same period in the prior year.

The company’s loss from operations was $4.0 million in the first quarter of 2017 compared to $4.9 million in the first quarter of 2016. Net loss and net loss attributable to common stockholders in the first quarter of 2017 was $4.2 million, compared to $5.2 million in the comparable period in 2016. Cash on hand and liquid investments at the end of the first quarter totaled $48.5 million.

“We are pleased with our progress in Q1 of this year, having increased revenue and lowered our operating expenses, reducing our loss by 20 percent compared to the same period last year,” said Raj Ketkar, president and CEO of Arcadia. “We also met with several of our key business partners, who continue to be committed to the commercialization of our rich pipeline in our yield trait and food ingredient platforms.”

Business and Technology Highlights
Arcadia made the following business and technical achievements in the first quarter of 2017:

• Arcadia Biosciences Obtains U.S. FDA GRAS Status for SONOVA® GLA Safflower Oil. Arcadia followed FDA-proposed procedures to establish its high gamma-linolenic acid (GLA) safflower oil as GRAS (generally recognized as safe). This approval expands the application options for use of SONOVA GLA oil, opening adjacent markets in nutritional beverages and medical foods.
• Study Shows Arcadia’s Nitrogen Use Efficiency Trait Increases Yield in NERICA Rice. In field evaluations over three growing seasons and in both upland and lowland rice production systems, rice lines with Arcadia’s NUE trait showed substantial yield increases under different nitrogen application rates. The leading NUE rice line showed a 34 percent increase over controls.
• Origin, Arcadia Announce China Biotechnology Collaboration in Corn. Arcadia announced a collaboration with Origin Agritech to deregulate insect resistance/ herbicide tolerance traits in corn. The project involves the first-ever export of a key corn biotechnology product developed in China to the U.S., and Arcadia will assist Origin in developing information for submission to regulatory authorities in the U.S., China and other countries.
• Arcadia and Limagrain Explore New Wheat Trait Development Collaboration. Arcadia and its wheat trait development partner Limagrain agreed to pursue an optimized collaboration structure to explore new wheat trait development activities, and for Arcadia to exit the existing joint venture between the parties, Limagrain Cereal Seeds (LCS). In connection with the exit from LCS, Arcadia exchanged its 35 percent ownership in LCS for the 1.8 million shares of Arcadia common stock previously held by Limagrain, which were retired by Arcadia upon receipt, thereby reducing the company’s outstanding common stock from 44.5 million to 42.7 million, or 4%, as of March 31, 2017.

Since the close of the first quarter, Arcadia has announced the following:

• SONOVA GLA Safflower Oil Approved For Use in Dog Food. After completing its review of Arcadia’s food additive petition, the FDA concluded that the data supports the safety and functionality of GLA safflower oil as a source of omega-6 fatty acids in dry food for adult dogs. The petition will be approved when the final rule is published in the Federal Register. This approval opens up an expanded opportunity for use SONOVA GLA safflower oil in pet nutrition and demonstrates Arcadia’s strong regulatory capabilities and commitment toward creating the greatest possible value for our entire product portfolio.

Revenues
In the first quarter of 2017, revenues were $1.0 million compared to revenues of $852,000 in the first quarter of 2016, a 19 percent improvement. The quarter-over-quarter increase was driven by additional revenue from a new contract research agreement in 2017.

Operating Expenses
In the first quarter of 2017, operating expenses totaled $5.0 million, down from $5.8 million in the first quarter of 2016, a decrease of $804,000 or 14 percent. Cost of product revenues decreased by $41,000 as a result of slightly lower sales when comparing the respective periods. Research and development (R&D) spending decreased by $379,000 and general and administrative (SG&A) expenses decreased by $384,000. Both decreases were driven primarily by lower salaries and benefits, mainly the result of workforce reductions made during 2016.

Net Loss Attributable to Common Stockholders
Net loss attributable to common stockholders for the first quarter of 2017 was $4.2 million, or a loss of $0.10 per share, a 19 percent improvement from the $5.2 million loss in the first quarter of 2016.