Biotech company seeking investors

Otago Daily Times

5 days ago

A Christchurch biotech company extracting an innovative protein from sheepskins to make mainly health benefit and nutrition ingredients for export markets is about to launch a capital raise.
Tertiary Extracts Ōtautahi (TEO) has quickly grown to 30 staff and set up a factory processing more than 550 tonnes of waste sheepskins into collagen since beginning operations last year.
The company was created by four co-founders, including chief scientific officer Dr Rob Kelly, who want to build sales in the functional foods, dietary supplements and personal care sectors.
Research began in 2021 to develop Ovitage - ovine collagen with a greater range of amino acids higher in cystine, tyrosine, and glutamic acid - followed by marketplace testing.
Initial ingredient sales to the United States, with plans to enter Europe and Asia, and TEO's launch of its own range for women, has encouraged them to seek further investment to step up production.
Kelly said the capital raise was expected to take place within the next few months with details still to be finalised.
"We are in the beginnings of business and based on the opportunity that we see from this interest we are getting in early exports we are looking to grow significantly," Kelly said.
"So we will be undertaking a capital raise shortly to drive this growth both in the entry of new markets and supporting further work to identify different health benefits."
They wanted to ideally work with strategic investors, understanding the overall sector and specifically the nutritional market, he said.
He said they were "open and flexible" to a range of possibilities, which could include a shareholding.
Initial investment came from the founders and their families and friends with support also from Callaghan Innovation, Ārohia Innovation Trailblazer Grant and Agmardt. Development research was carried out at Lincoln Agritech.
Kelly said they saw the main growth for the "world's most complete collagen" coming from the branded ingredient market, but had just released a finished product brand.
Last October, TEO launched its Everee Women range of functional protein supplements to support women with different product formulations for each stage of their life.
The range is combined with local plant extracts and biologicals to help with ageing and the menopause stage.
Another perimenopause product combines Ovitage with a kiwifruit extract for gut health, while a post-menopause product has a blackcurrant extract to help brain health and cognitive performance.
Kelly said women's health was a key area of focus because TEO's highly functional proteins addressed their under-served needs.
He said they were excited their work was being recognised.
TEO is a finalist in the technology innovation category for the Primary Industries New Zealand Awards and also an early-stage category finalist in the Fieldays Innovation Awards.
Kelly said the founders had been working in the nutritional space for many years in dietary and food supplements, particularly in the US.
"The [global] collagen market is over US$9 billion and still growing quickly so we saw that New Zealand didn't really operate in it of any significance and we also saw opportunities in that market."
Bovine collagen had associated environmental issues as it could come from factory-farmed beef or cattle raised on Brazilian land clear-felled of rain forest, while consumers were seeking differentiated proteins providing health benefits, he said.
"So, we looked at New Zealand materials and we produce a lot of raw material for collagen in the form of sheepskins from the red meat sector which are traceable, ethically sourced and grass fed with no one felling rainforests to grow sheep and the sheepskin has a novel material.
"Nobody has really looked at ovine collagens and it barely features in this massive collagen market so we undertook the research to look at that."
Hundreds of thousands of waste sheepskins supplied by red meat processors would likely have gone into landfills.
He said a novel way was developed to isolate proteins from sheepskin materials - which had a higher follicle density than other animals - to produce the patented Ovitage process and product for ovine collagen.
The amino acid profile produced a differentiated protein with greater health benefits, he said.
"Those amino acids are well understood as being important in particular health areas and these were identified through our market analysis which were not being well met by existing proteins particularly in women's health in the menopause area and the sport nutrition area."
For example, cystine aids healthy hair and nails, which is important for menopausal women, and helps with leaky gut syndrome.
A higher level of branched chain amino acids assists with building and maintaining lean body mass for particularly ageing women as well as men.
TEO proteins are mainly sold in powder form for overseas customers to make their own smoothies, protein bars, gummies and other formulations or turn into capsules for dietary supplements.
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