DAVIS, CALIF. — Arcadia Biosciences expects to achieve the first sales of its GoodWheat products later this year.
“We’re planning to introduce GoodWheat as retail flour with reduced allergenicity and improved protein quality in the fourth quarter,” said Sarah Reiter, chief commercial officer, in an Aug. 14 earnings call to discuss second-quarter results. “We also anticipate first commercial sales of resistant-starch GoodWheat in key territories before the end of the year. We’re working to be in the position to announce booked product sales in the fourth quarter.”
Resistant-starch GoodWheat has been shown to deliver three times as much resistant starch, a dietary fiber, as traditional wheat. Food companies may use resistant-starch GoodWheat ingredients to achieve claims such as “good source of fiber,” according to Arcadia Biosciences. In April 2018 Arcadia Biosciences introduced reduced-gluten GoodWheat, which has an overall gluten content reduction of 60%.
“GoodWheat aims to de-commoditize wheat by adding nutritional value to a well-loved food ingredient,” Ms. Reiter said.
Arcadia Biosciences will feature its GoodWheat line of products at the International Baking Industry Exposition Sept. 7-11 in Las Vegas. The company will provide demonstrations and samples of GoodWheat in food items like pasta, waffles and desserts.
Arcadia Biosciences is researching how reduced-gluten GoodWheat appeals to customers, Ms. Reiter said.
“And we also feel like it has some secondary benefits in terms of protein characteristics that may make it just as compelling as the resistant-starch technology,” Ms. Reiter said. “I would say continue to watch the space as we begin to better quantify how big the reduced-gluten opportunity can be for use.”
During the earnings call Ms. Reiter was asked to give details on customer arrangements, revenue guidance and long-term expectations for GoodWheat. She said the company may be able to talk about commercial agreements in the third-quarter earnings call.
“We are currently in a number of confidential discussions but expect this time next quarter to be able to share more detail,” she said.
Last November, Davis-based Arcadia Biosciences and Denver-based Ardent Mills entered a collaboration to develop and commercialize wheat varieties with an initial focus on extending the shelf life and improving the flavor in whole wheat products.
Arcadia Biosciences continues to expand the geographic area for growing GoodWheat.
“Our winter (wheat) production was significantly more efficient than we’d anticipated, averaging about 140% of our plan,” Ms. Reiter said. “During the second quarter, we also planted our spring wheats in key geographic areas across the U.S. and are planning harvest in the third quarter.”
The company is contracting with farmers for seed production, which will lead to grain production next year.
“So for us, 2020 represents an expansion,” Ms. Reiter said. “More farmers will be needed for the kind of scale that we need, but it’s just replicating what we already do. So for us, it feels like it’s right in our wheelhouse.”
Arcadia Biosciences posted net income of $4.2 million, or 84c per share on the common stock, in the second quarter ended June 30, which compared with a loss of $6.7 million in the same time of the previous year. The increase largely was due to the change in the fair value of common stock warrant and common stock adjustment feature liabilities in this year’s second quarter. Second-quarter revenues of $203,000 were down from $436,000, largely the result of a wind-down in government grant and contract research activity.
A loss of $8.4 million in the six months ended June 30 compared with a loss of $17.3 million in the same time of the previous year. Six-month revenues were $361,000, down from $650,000.
Arcadia Biosciences reported progress in a joint venture, Archipelago Ventures, that grows hemp in Hawaii. Archipelago Ventures combines the genetic expertise and seed innovation of Arcadia with the experience in extraction and distribution of Legacy Ventures Hawaii. Archipelago Ventures has a vertically integrated supply chain for hemp-derived cannabidiol (C.B.D.) products. The first hemp harvest has concluded in Hawaii, and plans call for expanding hemp-breeding activities in the United States, said Rajendra Ketkar, president and chief executive officer of Arcadia Biosciences.
“Our focus for the rest of 2019 will be on continuing this momentum and achieve first revenues in wheat and hemp by the end of the year, positioning us to significantly grow revenues in 2020,” he said.