AquaBounty's stock price decline, staffing challenges not impeding growth, CEO says

AquaBounty CEO Sylvia Wulf sent a letter to the Maynard, Massachusetts, U.S.A.-based company’s shareholders on Tuesday, 11 January, projecting growth from the company’s investment in genetically engineered salmon, as well as an update on the plan for another U.S. facility to be located in Pioneer, Ohio, U.S.A.

“We began 2021 with a world-class team in place and preparations to make this our breakthrough year,” Wulf said in the letter. “In the first quarter, we completed a public offering of common stock with USD 127.1 million [EUR 112 million] in gross proceeds, fortifying our balance sheet and positioning us to deliver on our vision for our next farm – a 10,000-metric-ton ‘farm of the future.’”

The new farm is projected to produce eight times the output of the company’s Albany, Indiana, U.S.A., location, which was its first in the United States. That recirculating aquaculture system (RAS) farm has an annual capacity of 1,200 metric tons, or 100 tons per month. AquaBounty also operates an RAS producing GE salmon in the Canadian province of Prince Edward Island.

Local bonds will make a significant contribution to the investment of the new facility, which will have an annual capacity of 10,000 metric tons once completed, Wulf confirmed.

“As the final design for our Ohio farm progressed, we refined our expected project cost to be in the range of USD 290 million to USD 320 million [EUR 255.4 million to EUR 281.8 million], including a reserve for potential contingencies of USD 30 million [EUR 26.4 million],” Wulf said. “We began the process for the placement of a mix of tax-exempt and taxable bonds through the Toledo-Lucas County Port Authority, whose board approved the issuance of up to USD 300 million [EUR 264.2 million] in bonds to support the financing of the project. We also engaged Wells Fargo Corporate and Investment Banking to underwrite and market the bond placement.”

A financial update from Wulf in November 2021 included acknowledgement of staffing challenges that were contributing to the company’s slow run-up to full capacity. And MarketWatch reported the company’s stock declined 6 percent to USD 1.91 [EUR 1.68] following a presentation and update at the H.C. Wainwright BioConnect Conference in early January. But Wulf suggested the company will put those issues behind it in 2022.

“We continued to scale production output in the third quarter, harvesting 84 tons of salmon from our two farms, and commercial interest remains high,” Wulf said. “Harvests increased 8 percent in the fourth quarter compared to the third quarter, as we set the stage for continued operational momentum going into 2022, with a full staff and arrival of additional automation equipment.”

The Food and Drug Administration approved genetically engineered salmon for human consumption in the United States in 2015, but the product has continue to be controversial. Aramark, Sodexo, and Compass Group publicly committed to a boycott of AquAdvantage salmon in early 2021. And in June 2021, U.S. Senator Lisa Murkowski (R-Alaska) reintroduced legislation that would increase labeling requirements on GE salmon.

“It is absolutely essential that consumers be fully informed about what they are buying and feeding their families – especially when it comes to purchasing a genetically engineered salmon product,” Murkowski said in a press release. “As an Alaskan who knows the tremendous benefits of eating healthy, wild Alaskan salmon, it’s imperative that Americans have the information to make that choice. When you splice DNA from another animal and combine it with farmed salmon, you are essentially creating a new species, and I have serious concerns with that.”

The company has touted its relationships with “large-scale retailers,” though so far only Samuels & Sons, based in Philadelphia, has gone public with its commitment to distributing GE salmon. Samuel & Sons Director of Purchasing Joe Lasprogata told SeafoodSource in August 2021 his company hasn’t received much feedback on the product.

“There have been a few emails and phone calls from people who are disappointed we’re handling this product, mostly from the general public,” Lasprogata said. “I can’t say I’ve changed anyone’s mind on it, but we’re getting facts out there.”

Photo courtesy of AquaBounty