Plant Impact Enters Exclusive License Agreement for BugOil®
News Jun 05, 2009
Plant Impact has announced that on May 2009 it has entered into a significant exclusive license agreement with Arysta LifeScience Corporation (Arysta) for the sale of Plant Impact’s flagship BugOil® product.
BugOil®, a patented technology developed by Plant Impact over 6 years, is a patented plant insecticide that uses a synergistic blend of plant essential oils to act against sap-feeding pests including mites, whitefly, thrips and aphids. BugOil® has proven high levels of efficacy and safety to the environment, users and customers when compared to currently available competitive products whose sales currently exceed US$800 million.
Plant Impact announced in December 2008 that the product registration dossier for European Union regulatory approval for BugOil® that was submitted in August 2008 had been passed as complete by the Pesticides Safety Directorate in the UK.
The Company expects to receive approval towards the beginning of 2010, leading to first sales during the same year. The Company is working in conjunction with Arysta for registration in the USA, Latin America, Europe, Africa and the Middle and Far East, where the Company believes BugOil® will make a significant difference to quality of life and living standards.
On 19 February 2009 Plant Impact announced that following the extensive trials conducted by Plant Impact on the BugOil® product to test efficacy and enable assessment of market potential, it had entered into a non-binding letter of intent in relation to the licensing of BugOil® and that it expected a definitive license agreement to be entered into during the first half of 2009.
The License Agreement grants to Arysta an exclusive worldwide license, with the right to sublicense, to manufacture and sell BugOil® in all fields except the home and garden and animal health markets.
Under the License Agreement Arysta is also granted certain rights in relation to any further development of BugOil® by Plant Impact. Plant Impact reserves the right to engage in further research and development regarding BugOil®. Plant Impact remains responsible for costs in relation to the maintenance of the BugOil® patents and obtaining the necessary regulatory approvals to sell BugOil® in the United Kingdom, the European Union and the United States. It is Arysta’s responsibility to register the product at state level in the United States and country level in the rest of the world.
The License Agreement provides that there shall be paid to Plant Impact milestone payments of increasing sums on:
• the signing of the License Agreement;
• achieving four regulatory milestones; and
• achieving three sales target milestones.
The License Agreement provides that Plant Impact shall be paid a royalty on the sales of the BugOil® product by Arysta. The level of this royalty payment is in line with the usual rate of royalty payable in the agrochemical industry.