Arcadia Biosciences Inc (NASDAQ:RKDA) announced Friday that its joint venture company Verdeca has received a green light from the United States Department of Agriculture (USDA) to commercialize a variety of drought-resistant soybean.
The USDA approved the HB4 drought and water-stress resistant seed which Arcadia Biosciences developed jointly with Argentenia’s Bioceres Crop Solutions Corp (NYSEAmerican:BIOX), according to a company statement.
Arcadia Biosciences stock rocketed 45.8% to $2.93 when the market opened Friday.
The approval comes exactly two years after the Food and Drug Administration approved the HB4 soybean trait in 2017.
"HB4 is a novel soybean trait that enhances the traditional herbicide tolerance package to provide yield stability across diverse environments," said Martin Mariani Ventura, general manager at Verdeca, in a statement.
He said the approval is a “significant step” towards the successful commercialization of HB4 technology in the global soybean market.
With USDA approval, the HB4 trait can now be commercialized in more than 80% of the global soybean market.
China a major soybean importer
The soybean seed has already been approved in Argentina and Brazil, with consent pending in Paraguay, Bolivia, Uruguay and China — a major importer, which is likely to give its approval by the end of 2020.
In a statement, Arcadia Biosciences CEO Raj Ketkar said: "Trials in Argentina have shown a positive impact of the HB4 trait stack on soybeans.”
He noted that approvals from the USDA and the FDA are “important steps” in the company’s continued drive to commercialize this trait in key markets.
Argentina, Brazil and the United States are the largest soy producers in the world, while China is the largest importer, making approval there key for the expansion of the product.
When China approves the seed variety, the company expects to penetrate 15% to 25% of all soy acreage in Argentina with HB4 in a period of three to five years.
"The HB4 trait was recently approved by Brazil as well, and we now expect approval in China in 2020 to launch our commercial efforts in Argentina," said Bioceres Crop Solutions CEO Federico Trucco.
According to Argentina’s Rosario Grains Exchange, 17.3 million hectares have been planted with soy in the current 2018-19 harvest, and production is expected to reach 56.5 million tons. China bought 92% of the 3.67 million tons of soybeans exported from Argentina in 2018.
Arcadia Biosciences and Bioceres Crop Solutions formed the Verdeca venture in 2012 to deploy next-generation soybean traits in key production regions, especially Latin America and the United States.
Contact Uttara Choudhury at [email protected]
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