Goodbye to Chemical Pesticides: Bayer Partner MustGrow Biologics Makes Progress – Has Bioceres Overreached?

Bayer Focuses on Partnerships

The Leverkusen-based chemical and agricultural conglomerate Bayer is feeling the full force of structural change in the agricultural sector and is responding by realigning strategically. To reduce the portfolio's environmental footprint by 30% by 2030, the company is relying on external alliances. Its own early-stage development centers, such as the West Sacramento site, have given way to a collaboration with Ginkgo Bioworks to research microbial nitrogen fixation. In addition, Bayer is advancing biostimulants such as Ambition Complete Gen2 in partnership with the Spanish company Kimitec. While the Crop Science division generated adjusted EBITDA of EUR 4.188 billion in fiscal year 2025, margin pressure in the conventional crop protection sector is forcing management to implement tough cost-cutting measures. By the end of 2026, Bayer aims to save EUR 2.0 billion across the group and is increasingly shifting high-risk screening to specialized partners.

Bioceres Stumbles After Aggressive Expansion

The Argentine company Bioceres is pursuing a different strategy, combining genetic drought resistance with biological crop protection. The company's flagship product is the transgenic HB4 trait derived from sunflower genes, which protects wheat and soybeans from drought and has been approved in growing countries such as the US, Argentina and Brazil. In addition, the company acquired the biopesticide specialists Rizobacter and Marrone Bio. However, this debt-financed expansion strategy proved to be a risky move in the volatile agricultural market. For the six months ending December 2025, Bioceres reported a net loss of USD 189.9 million following a foreclosure on collateral totaling USD 179.0 million. Due to the significant decline in equity to USD 106.6 million and serious breaches of loan covenants, auditors issued a warning.

MustGrow Biologics Harnesses the Power of the Mustard Plant

While Bioceres has run into difficulties, Canadian agricultural company MustGrow Biologics is pursuing a lean business model. The company harnesses the mustard plant to extract a potent active ingredient. This active ingredient treats harmful soil fungi, nematodes, and other pests entirely without synthetic chemicals. Its flagship soil biopesticide, the pre-registered TerraMG™, offers a fully natural alternative to conventional chemical treatments. The effectiveness of this plant-based approach has also impressed the industry. In December 2023, Bayer secured an exclusive license to market TerraMG™ in the EMEA region, with Bayer investing in all regulatory approval and development costs.

MustGrow estimates the total value, comprising an upfront payment, milestone payments, and development expenses funded by Bayer, at between USD 35 million and USD 40 million. For the Canadian company, the deal provides an ideal allocation of risk: Bayer is shouldering the toxicology studies and lengthy European regulatory approval processes, while MustGrow could later generate recurring licensing fees and product supply revenues. At the same time, MustGrow retains control over its banana business, where the active ingredient achieved control of the fungus Fusarium oxysporum in laboratory testing against the devastating Panama disease, Fusarium wilt TR4. MustGrow holds a comprehensive portfolio of granted and pending patents covering bio-based applications.

US Expansion and Organic Certifications Drive TerraSante™

In parallel with its collaboration with Bayer, MustGrow is advancing the direct marketing of its biological soil fertility product, TerraSante™, in North America. The product consists of plant-based proteins and carbohydrates, promotes root growth, and specifically activates beneficial soil microbes. All regulatory approvals have already been obtained in key states including California, Washington, Oregon, Idaho, Florida, Arizona, Georgia, Texas, Utah and Montana. In addition, TerraSante™ holds organic certifications in accordance with current standards. Commercial field trials with potato farmers in the state of Washington yielded such good results that MustGrow switched its contract manufacturing in Asia to continuous production.

MustGrow in Summary: Solid Balance Sheet Meets Operational Leverage

MustGrow demonstrates that innovative plant biotechnology can also be advanced using an asset-light model. For investors, this approach reduces risks and allows the MustGrow team to focus on what matters most. The stock has recently gained momentum. As fertilizers and chemicals also become increasingly expensive, MustGrow's products provide an increasingly significant lever for securing agricultural yields and meeting regulatory requirements. The company is exciting, and the stock of this Bayer partner is a must-watch.