Marrone Bio (MBII), Elephant Vert Ink Distribution Deal

Marrone Bio Innovations, Inc. (NASDAQ:MBII) and Elephant Vert entered into a distribution deal under which the latter will develop and market two of Marrone Bio’s products namely, the biofungicide Reysana and bionematicide Majestene, in Tunisia, Morocco and Algeria.

Bionematicide Majestene protects crops from yield-robbing nematodes and is currently under the process of registration. Biofungicide Reysana is used by growers of peppers, tomatoes, cucurbits and grapes. It contains same ingredients as Marrone Bio’s Regalia Maxx Biofungicide, which is presently marketed and sold in more than 10 countries.

The two pioneering companies in the biological crop protection market have the knowledge and products to bring sustainable solutions, which can improve both quality and yield to farmers in North Africa.

Elephant Vert is a Swiss group that develops and markets biofertilizers, organic amendments, biostimulants and natural biopesticides produced in four production units. According to Elephant Vert, integration of biopesticides into crop protection programs is increasingly important for exporters of vegetables in the region and also benefits all production. The deal opens up potential development opportunities to offer growers in North Africa with a vast range of innovative, efficient and natural solutions.

Marrone Bio has underperformed the industry it belongs to over a year. The company’s shares have lost around 33.8% over this period compared against the industry’s gain of 29%.

Marrone Biorecorded a net loss of $7.4 million or 25 cents per share in second-quarter 2017, compared with a loss of $6.8 million or 28 cents per share a year ago. Loss per share for the quarter was wider than the Zacks Consensus Estimate of a loss of 21 cents.

The company, in second quarter earnings call, announced that it is seeing above industry average growth for its products driven by its portfolio approach to product development and marketing that focuses on addressing unmet market needs and promotes substantial growth opportunities. It is gaining from efforts to grow revenues from existing as well as new products and strategic partnerships in the United States and overseas markets. The company expects its ongoing manufacturing improvement initiatives in research and development to contribute to a meaningful improvement in margins over the long term.

Zacks Rank & Stocks to Consider

Marrone Bio currently carries a Zacks Rank #3 (Hold).

Some better-ranked companies in the basic materials space include Sociedad Quimica y Minera S.A. (NYSE:SQM) , Koppers Holdings Inc. (NYSE:KOP) and Kronos Worldwide Inc. (NYSE:KRO) . All three stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks Rank #1 stocks here.

Sociedad Quimica has an expected long-term earnings growth rate of 32.5%.

Koppers has an expected long-term earnings growth rate of 18%.

Kronos has an expected long-term earnings growth rate of 5%.

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