HCW starts Arcadia Biosciences at buy; PT $20


H.C. Wainwright initiated coverage of Arcadia Biosciences (NASDAQ:RKDA) with a “buy” rating and $20 price target. The stock closed at $8.16 on June 18.

Arcadia has a track record in the generation of productivity traits for crops, including qualities such as drought resistance and nitrogen and water use efficiency.

Analyst Raghuram Selvaraju writes that the company's current focus is on the generation of proprietary enriched consumer ingredients, particularly with its GoodWheat brand. Launched in March 2018, GoodWheat is a non-transgenic program aimed at creating a proprietary portfolio of high-fiber resistant starch (RS), reduced gluten (RG) and extended shelf life wheat varieties.

Mr. Selvaraju said Arcadia intends to capture a greater share of the economics from such products by partnering with consumer products companies that are directly involved in creating products such as breads, cakes, pastries and other foods using its GoodWheat ingredients.

Arcadia expects to have its first RG bread wheat flour available for commercial testing by late 2018 and expects to initiate pre-commercial activities within 12 months after that, he added. The company's RS wheat brand could be introduced within the next 24-to-36 months.

Stephen Kilmer