Arkadia Biosciences RKDA Stock News

Arcadia Biosciences Inc (NASDAQ: RKDA) is running for the top in the market this morning, following up on the more than 100% gains the stock saw on Friday. The gains are tied to a recent USDA approval of a strain of soybeans with a genetic modification that makes them drought tolerant.

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Drought Tolerant Soybeans Send RKDA Stock Flying

As mentioned above, on Friday, Arcadia Biosciences announced that it, and its partner, Bioacres, successfully complted the regulatory review process, receiving approval from the USDA for its HB4 drought tolerant soybeans.

In a statement, Raj Ketkar, President and CEO at RKDA, had the following to offer:

Trials in Argentina have shown a positive impact of the HB4 trait stack on soybeans there. The USDA and FDA approvals are important steps in our continued drive to commercialize this trait in key markets.

Why The Stock Continues Flying

Sure, the news was positive, but publicly traded companies issue positive news all the time. Most, don’t see a run of more than 100% in value, followed by premarket gains over 40%. So, what’s the big deal here? Well, it has to do with the tremendous market potential that comes as a result of this approval.

With the USDA approval in mind, the HB4, drought tolerant soybeans offered by RKDA are now approved for sale in more than 80% of the global soybean market. This includes the United States, Argentina and Brazil. Moreover, China, Paraguay, Bolivia and Uruguay all have applications in for the regulatory approval of these special soybeans.

This really is a very big deal. At the end of the day, the soybean market is a MASSIVE one. In fact, it is estimated that by the year 2025, the soybean market will grow to be worth more than $215 billion annually.

Of course, the estimates include all areas of the market, from providing farmers with seeds and plans to providing end consumers with the soybeans that they’ll put in their soup. So, it would be ridiculous to think that Arkadia would take the majority, or even a lion’s share of this market. Nonetheless, it doesn’t need to.

At the moment, even after the tremendous gains that we’ve seen recently, RKDA trades with a market cap of just under $50 million. Considering this, even if the company were to only take 1% of the global soybean market, it would be a significant increase in value for the company and its investors.

Considering that the company’s HB4 soybens are drought tolerant, produce high yields, and are tolerant to other stressful conditions, there’s a strong chance that once the product hits commercialization, farmers will prefer these particular plants over traditional soybeans that may produce less and be susceptible to loss due to conditions that HB4 soybeans can take in stride.

As such, there’s a very big opportunity here. Should RKDA do well in terms of commercialization, a $40 million market cap could double, triple, or more in very short order!

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