MustGrow Biologics Receives First Milestone Payment from Bayer Under EMEA Biocontrol License Agreement

MustGrow Biologics Corp. (TSXV: MGRO) announced receipt of its initial development milestone payment from Bayer AG under a licensing and collaboration agreement signed in December 2023. This payment is linked to technical product development milestones for MustGrow’s mustard-based biocontrol technologies designed for soil applications within the Europe, Middle East, and Africa (EMEA) region.

The agreement grants Bayer exclusive rights to MustGrow’s proprietary biocontrol technology for soil applications in the specified EMEA territory. The initial milestone payment reflects progress in product development, with further payments contingent on future technical and commercial achievements.

MustGrow estimates the overall deal value to be between US$35 million and US$40 million. This includes upfront payments, milestone payments, and development work expected to occur over the next five to seven years. Specific financial terms of the milestone payments remain confidential.

Under the terms of the agreement, Bayer assumes responsibility for all regulatory and market development activities within the EMEA region. This encompasses formulated product development, regulatory data generation, submission filings, and commercial sales efforts. MustGrow’s incremental expenses are minimal, primarily limited to supplying product for testing purposes.

The agreement remains in effect until the expiration of all licensed intellectual property rights or earlier termination as stipulated. Upon the commencement of commercial sales, MustGrow will be entitled to receive royalty fees and manufacturing revenue from Bayer.

MustGrow CEO Corey Giasson described the milestone payment as a significant endorsement of the company’s TerraMG14 biocontrol technology. He emphasized Bayer’s global leadership in crop science and sustainable agriculture as a critical factor in advancing biological crop protection solutions.

A Bayer executive highlighted the importance of expanding biological crop protection technologies to address future agricultural challenges, underscoring the strategic value of the collaboration.

In addition to TerraMG14, MustGrow’s portfolio includes TerraSante14, a biofertility product already registered and commercially sold in key U.S. agricultural states such as California.

MustGrow currently has approximately 70.4 million common shares issued and outstanding, with about 91.9 million shares on a fully diluted basis. The company’s intellectual property portfolio comprises roughly 110 issued and pending patents related to its biocontrol and biofertility technologies.

The immediate impact of the milestone payment on MustGrow’s share price was not evident from publicly available market data following the announcement.

This milestone payment marks a critical step in the collaboration, with investors closely monitoring for subsequent milestone achievements and the potential initiation of commercial sales, which would trigger royalty and manufacturing fee revenues for MustGrow.

The collaboration reflects a growing industry trend toward sustainable agricultural solutions through biological products, leveraging proprietary intellectual property to meet regulatory and market demands across diverse geographies.

MustGrow’s partnership with Bayer exemplifies the integration of innovative biocontrol technologies with established global agricultural platforms, aiming to enhance crop protection and soil health in the EMEA region.

The company cautions that timelines and values associated with development work are subject to uncertainties inherent in product development, regulatory approval processes, and collaborative agreements.

MustGrow’s strategic focus on intellectual property development and commercialization partnerships positions it to capitalize on emerging opportunities in the biocontrol and biofertility markets worldwide.