Marrone Bio Innovations is bringing biological pesticides to the pest management industry

Marrone's products are made from naturally-occurring substances like bacteria or plant extracts Biopesticides used in conjunction with chemical ones gives growers more control over pests The biopesticide industry is projected to more than double to $6.4 billion by 2023 What Marrone Bio does: Marrone Bio Innovations Inc (NASDAQ:MBII) is leading the charge toward more environmentally-conscious effective pest management for farmers with its unique line of biological pesticides. Its products are made from naturally occurring substances such as microbes, bacteria, plant extracts, fatty acids or pheromones, and it is currently the only publicly traded biopesticide company on the US market. Marrone’s biopesticides, used alone or in concert with traditional chemical pesticides, help customers operate more sustainably while controlling pests, improving plant health, and increasing crop yields. Founded in 2006, the Davis, California-based company holds more than 400 issued and pending patents and has brought six US Environmental Protection Agency-registered biological product lines and one biostimulant to market. Its suite of biologicals includes a bevy of bacteria strains and plant extracts that fight pests, control plant diseases and reduce stress from sun and water. Besides its California operation, Marrone cultivates its biologicals at a facility in Bangor, Michigan armed with three 20,000 liter fermentation tanks. How is it doing: Biologicals are a rapidly growing industry, and Marrone Bio hopes to take advantage. According to data from Markets and Markets, the biopesticide market is projected to more than double to $6.4 billion by 2023, with a compound annual growth rate of nearly 16%. Reflecting this strong potential, the company posted revenue of $9.7 million in the three months ended March 31, 2020, 11% more than its revenue in the year-ago quarter. Adjusted EBITDA increased to a $3.7 million loss in the quarter, from a $2.6 million year-over-year loss. On May 14, Marrone revealed that its latest product, REGALIA MAXX - a biofungicide that improves yield and harvest quality by stimulating the plant’s ability to fight disease - had received a first approval for use on indoor and outdoor cannabis and hemp in Canada. The Ontario Ministry of Agriculture, Food and Rural Affairs agreed to sponsor the company's application for a User Requested Minor Use Label Expansion (URMULE) for REGALIA MAXX’s use on cannabis and hemp in April. Final approval by Health Canada/Pest Management Regulatory Agency (PMRA) is anticipated in July this year. In February, Pacesetter, a new plant health product, was approved by the US Food & Drug Administration. Pacesetter acts synergistically with conventional fungicides to improve plant health and vigor, increasing yields by up to seven bushels per acre in soybeans and 13 bushels per acre in corn, according to the company.   The foliar plant health product is the newest addition to Marrone's BioUnite portfolio, a science-based integrated pest management program that harnesses the power of biology with the performance of chemistry. And at the end of March, Marrone Bio revealed that its Jet-Oxide 15% sanitizer product had been approved by the US Environmental Protection Agency (EPA) for use on industrial food and agricultural hard surfaces against the coronavirus (COVID-19).  The EPA conducted a study with Human Coronavirus Strain 229E, a different, more common coronavirus strain associated with human colds, found that Jet-Oxide produced a 99.99% reduction of the strain. Jet-Oxide is a fact-acting post-harvest sanitizer and industrial disinfectant that can be used to treat unprocessed fruits and vegetables, as well as any surfaces, equipment or machinery that produce comes in contact with. On the management front, the company is currently looking for a new CEO to replace founder Pam Marrone, and the group said in April it has identified a “final candidate” from a nationwide search. On the financing front, at the end of April, Marrone Bio signed a warrant exchange deal with institutional investors to reduce its number of outstanding warrants by almost 35% and raise as much as $22.4 million in 2020 and 2021, providing the company with a well-defined path to breakeven status. Earlier in the same month, it received a $1.7 million small business loan under the Paycheck Protection Program (PPP) contained within the Coronavirus Aid, Relief and Economic Security (CARES) Act. Inflection points: Confirmation of new CEO to replace founder Pam Marrone, More news on REGALIA MAXX biofungicide approvals Progress on Jet-Oxide sanitizer for coronavirus protection What the boss says: Marorone Bio's founder and CEO Pam Marrone has a PhD in entomology, the study of insects, and has spent her career focused on pest management. She’s optimistic about where the biologicals industry — and the company’s new REGALIA MAXX product — is headed, despite the coronavirus pandemic. “Our cannabis and hemp business is a nice growth driver for us,” Marrone told Proactive in an interview. “Every day I’m seeing steady sales. During this pandemic, maybe this is something people are doing more, but it hasn’t slowed down at all.” “We had a record quarter,” Marrone added. “There’s a lot of uncertainties about the supply chain and what crops are gonna be down and what are up ... but putting that aside, we expect that our year-over-year growth will accelerate for the next three quarters as well.” Contact Andrew Kessel at andrew.kessel@proactiveinvestors.com Follow him on Twitter @andrew_kessel