Shares in Queensland-based agricultural biotech Terragen (ASX:TGH) fell flat on its first day on the ASX, initially ticking up to 26c before falling back to 21c.
The company launched a $20m IPO, offering shares at 25c, in November, with a plan to use the funds to push forward in Australia, New Zealand, the US and Europe.
Terragen develops and commercialises biological products using live microbes to address soil health and productivity of farm production animals.
They are designed to reduce the reliance of farmers on chemical-based fertilisers, pesticides and antibiotics, which is a benefit but also a risk.
The company in its prospectus notes that “farmers who are traditionally reticent to adopt new technologies”, hence why the company is spending to develop markets for its products.
Organic fertiliser maker Fertoz (ASX:FTZ) and Bio-Gene Technologies (ASX:BGT) are examples of companies trying to encourage farmers to change their ways and adopt more eco-friendly products.
The cash raised will be used to further commercialise Terragen’s soil conditioner Great Land and microbial feed supplement Mylo in Australia and New Zealand as well as further develop and market Mylo, veterinary products Lactolin and Halo in the US and Europe.
Lactolin is a teat conditioner to maintain and improve the udders of lactating production animals, and Halo is an anti-inflammatory product to assist dairy cattle with mastitis and companion animals such as dogs with mobility impairments.
“As far as we know, Terragen is the first publicly listed company developing biological products for both soil and animal health applications in the world and one of very few developing products in either category,” Terragen managing director and CEO Justus Homburg said.
Terragen has been building revenue year-on-year since 2017, according to the accounts offered in the prospectus, with losses tracking at about $3m each year.
Fiscal 2019 revenue was $981,000, with a full year loss of $3.2m.