Eden Bioscience spins off sector to Pa. company

Published 9:00 pm Monday, February 26, 2007

BOTHELL – Eden Bioscience shareholders voted Monday to sell the company’s plant-enhancing technology and its line of products marketed to farmers in a $2.5 million deal with a Pennsylvania-based company.

Sixty-eight percent of the company’s shares favored the sale, while 2 percent voted against it. A tiny fraction totaling less than 0.2 percent, abstained, while about 30 percent of the company’s 8.1 million shares were not cast.

“This isn’t what we planned, but it’s the best alternative,” said Larry McDonnell of Enumclaw, who’s owned shares since Eden went public in 2000.

For the modest sum, Plant Health Care of Pittsburgh, Pa., buys the rights to the active ingredient in Eden’s products: naturally occurring proteins called harpins, which trigger plants’ natural defenses. Plant Health Care also takes over the contract of Zhongmin Wei, Eden’s vice president of research, who discovered harpins’ importance to plant health as a Cornell University scientist.

The company will sell Eden’s crop spray and other products, sold under the Messenger, N-Hibit and ProAct names, to the agricultural industry. It has hired 10 of Eden’s sales representatives to help it do so.

Plant Health Care also has assumed Eden’s manufacturing equipment and inventory of products, as well as some of Eden’s liabilities, including its office space lease in Bothell.

Eden keeps its cash and its inventory of Messenger for the home-and-garden market. Through a licensing and supply agreement with Plant Health Care, Eden retains the exclusive right to sell harpin products to that segment of the market.

As soon as the deal closes, which could be today, Eden will receive $1.5 million in cash. Plant Health Care will present the remaining $1 million by the year’s end.

Brad Powell, Eden’s longtime chief financial officer and the company’s president since December, said he was satisfied with the deal with Plant Health Care. The remaining question is how will Eden carry on from this point.

Powell said the company, whose losses totaled $7.8 million in the first three quarters of last year, is studying its options. But he’s clear on one goal: to grow sales to home gardeners. In the first three quarters last year, home and garden customers bought $377,000 worth of Eden products, compared to more than $3 million sold to farmers and horticultural users.

Powell said Eden was taking steps to expand distribution of its products to home-and-garden customers. Better distribution and marketing are key, he said, as the product itself is well liked by those who try it.

“It’s getting the word out and the awareness out,” Powell said. “It’s a very well supported product.”

Shares of Eden lost 2 cents Monday to close at 90 cents a share.

Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.