BioHarvest Sciences Inc. (NASDAQ: BHST) announced it signed a $1.2 million Stage 2 contract for developing a rare fragrance compound through its botanical synthesis platform. The contract follows the completion of Stage 1 in March 2026, during which the company produced a stable cell bank containing rare molecules.

The fragrance compound is derived from a plant considered one of the most valuable fragrance raw materials globally, with premium grades priced at tens of thousands of dollars per kilogram. The Stage 2 development phase is expected to take six to nine months and will produce sufficient material for commercial trials.

Under the agreement, BioHarvest retains 20% ownership of successfully developed compositions and will serve as the manufacturing entity. The partner is described as a prominent United Arab Emirates-based investment group, though specific details remain confidential under a non-disclosure agreement.

The company plans to begin production in the second half of 2027, coinciding with the commissioning of a new production facility. BioHarvest cited industry research indicating the premium fragrance segment represents a $23 billion market opportunity within the global $58.9 billion scents and fragrances industry.

"A Stage 2 contract means that we have crossed the tallest technological hurdle of this unprecedented research and development journey," said CEO Dr. Zaki Rakib in the company's statement.

BioHarvest operates as both a contract development and manufacturing organization for plant-based compounds and a creator of proprietary nutraceutical products. The company uses its botanical synthesis technology to produce plant compounds without cultivating the underlying plants.