August 24, 2015
Eden Research Plc (AIM: EDEN), the AIM-listed natural micro-encapsulation company, announces that it has signed an exclusive licence agreement (“Agreement”) with TerpeneTech Limited (“TerpeneTech”) granting TerpeneTech the rights to use Eden’s technologies and intellectual property (“IP”) in the field of ‘over the counter’ head lice treatments.
In consideration for this Agreement, TerpeneTech has paid Eden an up-front fee of £0.6m for the licensed rights and will pay royalties on the sale of products. In addition to the Agreement, Eden has taken a 29.9% stake in TerpeneTech for £0.92m, through the issue of4,615,385 million new Eden shares at 20p per share (“Investment”).
The global market for head lice is valued at around USD$700m at the retail level and is generally seen as lacking in products that are particularly efficacious with most products relying on synthetic actives and/or devices such as nit combs for the challenging and unpleasant removal of the lice and their eggs. TerpeneTech has developed a head-lice product using Eden’s GO-E™ encapsulation system and low-risk active ingredients. Based on recently concluded field trials, TerpeneTech’s products deliver a high-level of efficacy in the direct treatment of head lice and their eggs. TerpeneTech is currently undertaking further human trials and product development in conjunction with leading scientific advisors and potential distribution partners.
Over the past four years TerpeneTech has developed a number of products using Eden’s GO-E™ encapsulation system and IP, some of which now form the basis for products in areas outside of the biocides sector, for which TerpeneTech already has the exclusive rights from Eden for certain applications.
Given the progress that TerpeneTech is making and in order for Eden to take a bigger share of the potential future value that will be derived from this relationship, it was agreed that Eden should now take a strategic stake in TerpeneTech. In addition to the Investment made, Eden has the right to appoint a director to the Board of TerpeneTech and it shall do so in due course.
As part of the plan to enter into this agreement with TerpeneTech, the existing agreement with Neo-Pharma Innovations Limited, who held the rights to Eden’s patented, unencapsulated head lice product formulations, has been terminated.
Eden’s Chief Executive, Sean Smith, commented: “This Agreement is significant to Eden in terms of both the licence fee and the market opportunity. We believe that the combination of Eden’s patented GO-E™ encapsulation system with efficacious, low-risk ingredients will provide the differentiator and sustainable competitive advantage required to be successful in this attractive market.
“Products that exhibit immediate and sustained efficacy against lice and their eggs, safety, and ease of use are well-positioned to secure market leadership in a relatively short time frame. The incumbent treatments not only fall short with respect to these qualities, but they also suffer when highly-adaptable lice develop resistance to many of the most effective synthetic actives. We believe TerpeneTech’s products will fit a major unmet market need.
“Eden has worked well with TerpeneTech over the years and is pleased with the contribution that it has made. At this stage it makes sense for Eden to take a larger share in the future value that is being built by TerpeneTech in addition to the royalties that are due to Eden under the existing and new licence agreements.
“We look forward to continuing to work closely with TerpeneTech to make this a successful and fruitful collaboration.”
Application has been made for the 4,615,385 new ordinary shares to be admitted to AIM. It is expected that the new ordinary shares, representing 2.9 per cent. of the enlarged issues share capital, will be admitted to AIM and that dealings will commence on Thursday 27 August 2015.
In accordance with the Disclosure and Transparency Rules (DTR 5.6.1R) the Company hereby notifies the market that immediately following Admission its issued share capital will consist of 158,758,265 Ordinary Shares of 1 pence each. Shareholders may use this figure as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the Company under the FCA’s Disclosure and Transparency Rules.