The expansion of MustGrow Biologics Corp. (TSX-V:MGRO, OTCQB:MGROF)'s postharvest food preservation evaluation agreement with Janssen PMP is further evidence of the efficacy of MustGrow’s biological mustard plant-based technologies and another step on the path to commercialization, according to analysts at Noble Capital Markets.
The two companies on Wednesday announced that the existing agreement to test and develop MustGrow’s biological mustard plant-based technologies for certain postharvest food preservation storage applications will now also include postharvest potatoes and bananas.
“Over the past 15 months of postharvest evaluation work, Janssen PMP and MustGrow have produced very encouraging and efficacious results, supporting the decision to add postharvest potatoes and bananas to Janssen PMP's exclusive evaluation work,” the analysts wrote in a note to clients.
“This additional postharvest market area to Janssen PMP is expected to accelerate MustGrow's development timeline, levering the current project work and technical/marketing expertise of Janssen PMP's postharvest professionals.”
The analysts noted that as much as one-third of U.S. potato crops, valued at $1.3 billion, are lost each year due to postharvest issues. More than one-third of fruits and vegetables globally, worth $1 trillion, are lost due to postharvest operations, they added.
“Reducing postharvest losses could increase food availability, reducing pressure on the mounting food supply shortage and global inflationary pressures with respect to food prices,” they wrote.
Following the agreement expansion, the Noble analysts said that they were maintaining their ‘Market Perform’ rating on MustGrow.
“We believe substantial opportunity exists for natural alternatives in the company’s targeted end markets, such as preplant soil fumigation, bioherbicides, postharvest food preservation, and, now, soil amendment and biofertility,” they wrote.
“We believe the company’s partnerships with key companies in the space will prove fruitful, both in validating the technology but also in assisting MustGrow in the regulatory approval process.”
The analysts concluded that they would look to upgrade MustGrow to an ‘Outperform’ rating on additional favourable trial outcomes and/or movement on the regulatory front.
Contact the author at emily.jarvie@proactiveinvestors.com
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