Monsanto Won’t Be Happy About This Killer Product From Marrone Bio (MBII, NASDAQ)!

Mar 20

Monsanto Won’t Be Happy About This Killer Product From Marrone Bio (MBII, NASDAQ)!

This Is Marrone’s Moment!


Since the middle of last year I’ve been covering Marrone Bio Innovations (MBII, NASDAQ) like white on rice. Below are a few soundbites, minus the sound, regarding why MBII was and is a sophisticated speculation:

  • It’s one of the smartest ways to play marijuana! “Clean Cannabis” – that’s what well-read medicinal marijuana users are demanding now, and will increasingly be demanding in the future, upon learning of the negative health effects posed by growers using chemical pesticides (“Growers in California and Canada are beating our doors down”, said CEO/Founder Pam Marrone);
  • Food products can’t be labeled “organic” unless they were grown with “bio-based” pesticides and stimulants. Marrone Bio is one of the few pure plays on the booming organic business (although 70% of its sales are to conventional farmers who are also seeing increased yields with Marrone Bio’s products), because it has 6 EPA approved bio-pesticide and bio-stimulants on the market.


This is a rapidly growing multi-billion dollar opportunity!


MBII -- size


Marrone accumulated some debt over the years to fund its growth, so the balance sheet was a viable concern.


But that’s in the rear view mirror now!


As of early February, lenders converted $45 million worth of debt into equity at $1.08 per share. The balance sheet’s been restructured. Marrone’s debt is manageable at roughly $17 million and well-financed with the company holding around $30 million cash.


That refinancing transaction was incredibly important for Marrone.  We covered the news, and I recall being confused as to why Mr. Market didn’t embrace it. MBII should have been going up!


And it wasn’t.


But now it is!  Alas, MBII finally has momentum in its favor.


MBII -- ch 318


After consolidating between 90 cents and $1.20 for nearly a year, MBII has broken above the range. It’s got some head room up to $1.75 before facing some resistance.


You want to know what could push MBII up to $3 or even $5 per share?


Monsanto Isn’t Going To Be Too Happy About Marrone Bio’s New Killer Product!




There’s money in weed control. And farmers worldwide desperately need an alternative to glyphosate, the active ingredient in Monsanto’s Roundup weed killer. In addition to significant health concerns (glyphosate has been banned in 23 countries, including Canada) and ongoing cancer litigation, Roundup’s overuse has caused weeds to develop a resistance – and the resistance is spreading.


Regarding MBI-014, “Farmers are waiting for it,” said Pam Marrone (you can tell she’s excited about this one!). The company’s non-chemical alternative to killing weeds is nearly ready to be submitted to the EPA.


If and when MBI-014 is approved, the time frame would be late 2018 or 2019, that catalyst alone could push MBII up to $3 or more! Farmers worldwide would want to begin using MBI-014 immediately to solve their weed problems (Roundup is a $5 billion product, so Monsanto won’t be too happy about scrappy little Marrone Bio).


When you compare the two, chemicals vs. biopesticides, I can see which business I’d rather be in.


MBII -- bio vs chem


By the way, Marrone Bio has a strong patent portfolio (+400 issued and pending) protecting its various product chemistries, mixtures, and formulations.


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*Author has a long position in Marrone Bio


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