IPO Report: Arcadia Biosciences (RKDA)

Francis Gaskins |


Arcadia Biosciences (RKDA) is a leading agricultural biotechnology trait company with an extensive and diversified portfolio of late-stage yield and product quality traits addressing multiple crops that supply the global food and feed markets. It is based in Davis, CA.

Four other companies are scheduled for the week of May 11. The full IPO calendar is available at IPO Premium.

SEC Documents

Manager, Joint-managers: Credit Suisse, J.P. Morgan, Piper Jaffray
Co-managers: none

End of lockup (180 days): Monday, June 8, 2015
End of 25-day quiet period: Monday, November 9, 2015

RKDA scheduled a $100 million IPO with a market capitalization of $532 million at a price range midpoint of $14 for Wednesday, May 13, 2015 on Nasdaq.

Arcadia Biosciences Summary

RKDA is a leading agricultural biotechnology trait company with an extensive and diversified portfolio of late-stage yield and product quality traits addressing multiple crops that supply the global food and feed markets.

RKDA’s target market is the $39.4 billion global seed market.

Arcadia Biosciences Valuation


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% offered in IPO

Arcadia Biosciences (RKDA)








Arcadia Biosciences Conclusion


Rev +8% to $7mm, mostly from licenses & grants

P/E of -29, indicating relatively low cash burn rate relative to market cap

Price to sales of 76

Has strategic partners

Arcadia Biosciences Business

RKDA is a leading agricultural biotechnology trait company with an extensive and diversified portfolio of late-stage yield and product quality traits addressing multiple crops that supply the global food and feed markets.

Arcadia Biosciences Target Market

RKDA’s target market is the $39.4 billion global seed market.

RKDA’s goal is to increase the value of this market significantly by increasing yields in the more than $1.0 trillion market for the five largest global crops, and to capture a portion of the increased value.

Arcadia Biosciences History

RKDA was incorporated in 2002 to pursue agricultural-based biotechnology business opportunities that improve the environment and human health, and in 2004 entered into the first collaboration agreement with a potential commercial partner.

In 2009, RKDA completed the U.S. Food and Drug Administration, or FDA, regulatory process for the  Sonova brand gamma linolenic acid safflower oil, called Sonova 400 GLA safflower oil, just six years after RKDA first began developing the trait under a research and commercial agreement with Abbott.

RKDA introduced this product commercially in late 2010, and in 2014 introduced Sonova Ultra GLA safflower oil, a more concentrated version of our Sonova 400 GLA safflower oil. RKDA refers to these products as its Sonova products.

Arcadia Biosciences Partnerships

RKSA formed strategic partnerships and developed strong relationships with global agricultural leaders for development and commercialization of RKDA's traits in major crops and consumer products.

Collaborators include subsidiaries or affiliates of Limagrain (Vilmorin & Cie), Mahyco (Maharashtra Hybrid Seeds Company Limited), Dow AgroSciences, DuPont Pioneer (E.I. du Pont de Nemours and Company), SES Vanderhave, Genective (a joint venture between Limagrain and KWS SAAT), Scotts, U.S. Sugar, Abbott, Ardent Mills, Bioceres, and others.

Additionally, in order to increase RKDA's participation in the value of two major crops, wheat and soybean, RKDA formed two joint ventures.

Limagrain Cereal Seeds LLC is the joint venture with Limagrain for the development and commercialization of wheat products for North America.

Verdeca LLC is the joint venture with Bioceres for the development and deregulation of soybean traits globally.

In April 2015, RKDA entered into a collaboration agreement with Dow AgroSciences and Bioceres under which the Verdeca joint venture will collaborate with Dow AgroSciences on the development and deregulation of soybean traits on a global basis.

RKDA intends to enter into future collaboration agreements and joint ventures depending on an  assessment of which structure provides the best ratio of risk to investment return.

Arcadia Biosciences (RKDA) Traits

RKDA’s traits are focused on high-value enhancements that increase crop yields by enabling plants to more efficiently manage environmental and nutrient stresses, and that enhance the quality and value of agricultural products.

RKDA’s traits increase value not only for farmers, but also for users of agricultural products. There currently are more than 50 products in development incorporating RKDA’s traits and there are 13 in advanced stages of development or on the market.

RKDA’s crop yield traits are being utilized by its commercial partners to develop higher yielding seeds for the most widely grown global crops, including wheat, rice, soybean, corn, and sugarcane, as well as for other crops such as cotton, canola, turf, and trees.

RKDA’s business model positions it at the nexus of basic research and commercial product development, as RKDA applies its strong product development and regulatory capabilities to collaborate with, and leverage the skills and investments of, upstream basic research institutions and downstream commercial partners.

RKDA believes its approach significantly reduces risk and capital requirements, while simplifying and expediting the product development process.

RKDA also believes that its collaboration strategy leverages its internal capabilities, enabling RKDA to capture much higher value than would otherwise be the case, and enabling RKDA’s commercial partners to develop and commercialize products more cost-effectively.

Arcadia Biosciences Agricultural Biotech

In recent decades, agricultural biotechnology has been a major driving force for improving farm economics by introducing genetically modified, or GM, seeds, with traits that reduce the cost of managing crop biotic stresses such as weeds, insects, and microbial pests.

The first agricultural biotechnology traits, herbicide tolerance and insect resistance, were developed primarily by companies with deep expertise and a long heritage in crop protection chemistry and pest management.

Seeds with these traits have achieved rapid growth and strong commercial success, reaching market share in excess of 90% in key crops and countries as of 2013.

RKDA believes the next generation of advancements in agricultural biotechnology involves increasing yields by making crops which perform significantly better under a wide range of abiotic stresses, including drought, heat, salinity, and variable availability of key nutrients such as nitrogen.

Arcadia Biosciences Intellectual Property

RKDA relies on patents and other proprietary right protections, including trade secrets and contractual protection of its proprietary know-how and confidential information, to preserve its competitive position.

As of December 31, 2014, RKDA owned or exclusively controlled 115 issued patents and 44 pending patent applications worldwide.

As of this date, RKDA owned six and exclusively in-licensed 19 U.S. patents and RKDA owned seven and exclusively in-licensed one pending non-provisional U.S. patent applications relating to its trait technologies and business methods.

Also, as of this date, RKDA owned 11 and exclusively in-licensed 79 foreign patents and owned 16 and exclusively in-licensed 20 pending foreign patent applications.

With respect to all of the foregoing patent assets, RKDA’s exclusive licenses afford RKDA controls over the prosecution and maintenance of the licensed patents and patent applications.

These numbers do not include in-licensed patents for which RKDA either does not have exclusive rights (such as certain enabling technology licenses), or for which RKDA has exclusive rights only in a limited field of use and do not control prosecution and maintenance of the licensed patents.

As of December 31, 2014, RKDA had nine registered trademarks in the United States. As of this date, RKDA also had eight registered trademarks and had one trademark application pending in various other countries.

Arcadia Biosciences Competition

According to Phillips McDougall, the leading 11 seed and trait companies as a group invested $4.1 billion in seed and trait research and development in 2013.

This includes conventional and advanced plant breeding, as well as biotechnology trait development.

According to Phillips McDougall, only a limited number of companies have been actively involved in new trait discovery, development, and commercialization: Monsanto, DuPont Pioneer, Syngenta, BASF, Bayer, Dow, KWS, and Genective (a joint venture between KWS and Limagrain).

Many of these companies have substantially larger budgets for gene discovery, research, development, and product commercialization than RKDA does.

Some of these companies also have substantial resources and experience managing the regulatory process for new GM seed traits.

Each of Monsanto, DuPont Pioneer, Syngenta, Dow, and Bayer, which accounted for 85% of the 2013 seed trait research and development spend noted above, also have significant chemical crop protection background and businesses.

The trait pipelines of these companies are heavily weighted toward biotic stress traits, although they also have significant programs aimed at development of abiotic stress traits.

While these companies have internal programs that may compete with RKDA’s own, they also seek new traits externally and, as such, some of them either currently are, or may in the future be, RKDA’s collaborators.

In addition, some of these companies are currently among its sources for new trait technologies.

Arcadia Biosciences 5% Shareholders Pre-IPO

Darby E. Shupp            69.6%

Uday Garg        18.9%  

Moral Compass Corporation      69.6%  

Entity affiliated with Mandala Capital      18.9%

Arcadia Biosciences Dividends

No dividends are planned.

Arcadia Biosciences Use of Proceeds

RKDA expects to receive $89 million from its IPO and use it for the following:

primarily for general corporate purposes, including working capital, capital expenditures, further development and commercialization of its products, and sales and marketing activities.

RKDA may also use a portion of the net proceeds to expand its business through investments in or acquisitions of other complementary strategic joint ventures, businesses, products or technologies, including potential investments along with its seed company partners in product development and/or deregulation.

RKDA does not have any understandings, commitments, or agreements with respect to any such acquisitions or investments at this time.

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer


Symbol Name Price Change % Volume
RKDA Arcadia Biosciences Inc. 1.73 0.03 1.76 6,721


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