Christchurch biotechnology company PharmaZen has raised USD14.0 million from an international agri-technology fund to expand its operations amid surging global demand for its nutraceutical products.
Its portfolio of ingredients covers joint, bone, muscle and digestive health, along with marine and bovine collagen and animal nutrition. Many of these value-add ingredients are by-products of the food industry that would otherwise go to waste, improving the efficiency of food production. PharmaZen trades under the name Waitaki Biosciences.
The Cibus Fund, advised by ADM Capital Europe, invests growth capital into sustainably run food and agriculture companies across the globe. The Cibus Fund has agreed to lock up its investment for at least three years and to work with existing management to invest this capital in new facilities to accelerate growth.
PharmaZen is issuing the Cibus Fund 35 million new shares, equating to a 13.8 per cent stake in the company, at 40 cents a share. The issue price, which represents a 13.1 per cent discount to the volume weighted average price of the last 12 months, recognises the size of ADM Capital Europe’s investment and the significant expertise ADM Capital Europe offers in helping PharmaZen achieve its ambitions.
Damon Petrie, a member of the Cibus Team, will join the PharmaZen board as a non-executive director after the transaction completes.
PharmaZen Chairman Ken Fergus says: “We are delighted to welcome the Cibus Fund to the share register and Damon to the board. PharmaZen is the Cibus Fund’s first New Zealand investment and for us to have gained the attention of an organisation of Cibus Fund’s international standing is a strong endorsement of our business model and strategies. There is a real synergy in core values and aspirations for growth, which we believe will be further accelerated by access to their industry expertise and related investments.”
The additional capital will be used to develop new facilities to increase both capacity and capabilities, he says.
“Building capacity from cashflow and additional debt has made it a challenge keeping up with growth in demand. These funds provide us with the capacity to make transformative investments that will future-proof existing business growth opportunities while enabling us to accelerate future projects.”
The Cibus capital will go into building a new 3,000 sq m production facility on PharmaZen’s recently purchased 1ha property in Rolleston. Construction of the facility is planned to begin in February and be operational August 2021. Once complete, it would house three more two tonne freeze dryers as well as new extraction facilities and an expanded marine collagen plant.
PharmaZen is also planning to exercise its option to purchase another hectare alongside the existing Rolleston site with plans for a further 3,000 sq m factory currently being designed with a scheduled build date of mid-2021. This new facility will be purpose built to house six two tonne freeze dryers specifically for high value pet products.
Damon Petrie says: “PharmaZen occupies a unique position on the world stage and is well placed to benefit from the strong growth we are seeing in international Nutraceuticals markets, now forecast to grow to become a USD722 billion industry by 2027 from USD383 in 2019.
“Its portfolio of nutraceutical ingredients and its AiOra range of branded products are high quality and aimed at fast growing market segments. The range also benefits from New Zealand’s clean green reputation and the country’s record for producing high-quality food and ingredients. We are looking forward to working with management and the Board to realise the tremendous potential we see for the business.”
PharmaZen’s AiOra branded supplements range is aimed at applications such as improving gut, brain, vascular, bone and joint health.
