Bio bug killer makes steady ASX debut with sweetener to keep sellers at bay
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Bio-Gene Technology shares barely moved on its Wednesday ASX debut, but for a good reason: the natural pesticide maker promised a sweetener for anyone holding on for three months.
Bio-Gene (ASX:BGT) — which raised $7.1 million to develop anti-resistance pesticides — promised those who bought into the float an option to buy shares at 20c for every five they held in three months time.
The shares closed their first day at 20.5c, up slightly on the 20c issue price.
Chief executive Richard Jagger wasn’t bugged by the slow start.
Mr Jagger says he offered the loyalty options because the technology was still conceptual and pre-revenue — and he wanted to protect the share price and reward loyal investors.
The owners of about 17 million shares have also voluntarily escrowed their interests for six months. Mr Jagger says the majority of the register is held by a swarm of retail investors.
The options are valid for nine months after that, in which time Mr Jagger hopes to have “a good story” to tell about licensing deals in an industry fraught with change.
Getting in on the action
Globally the agricultural space has been undergoing some major consolidation activity.
Dow Chemical and DuPont have merged, China National Chemical Corporation (ChemChina) has bought Syngenta, but Bayer’s marriage with Monsanto is being held up in European competition courts.
Mr Jagger says being a takeover target is an opportunity down the track, but right now their tech needs proving.
“All of that [global market activity] is exciting to us, [not just because of] the opportunity to even do deals with commercial partners because of all of this flux and change within the industry. It’s a really promising time for people like us coming into the market with new technology,” he told Stockhead.
We’re not playing with genes
The technology does not, as the company name might suggest, feature genetic engineering.
“The technology is derived from an oil extract from a eucalyptus species, and we have been able to synthesise a molecule that we can make in a factory, so we can scale up.”
The tech works Mr Jagger says — but so far it’s only been tested by animal healthcare provider Virbac in an application to kill off bugs that attack cows.
Bio-Gene is developing a proof-of-concept for the natural pesticide — such as for fleas, borer and cattle ticks — which can then be taken to partners to put into their own formulations.
“Bio-Gene’s novel platform technology is based on naturally occurring beta-triketones, a type of chemistry that may offer new solutions for insect management control in animal health, crop protection and grain storage as well as in public health applications,” the company says.
Bio-Gene says the global agricultural insecticide market is valued at more than $US16 billion ($21 billion) annually, but insecticide resistance is a growing problem.
Research from 2015 showed almost 600 insect types were resistant to more than one insecticide.