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NZ Pharmaceuticals seeks alternative bile supply

Wednesday 28 September 2016 01:19 PM

NZ Pharmaceuticals turns defence into offence for alternative bile supply

By Fiona Rotherham

Sept. 28 (BusinessDesk) - New Zealand Pharmaceuticals, the specialty biopharmaceuticals manufacturer, is researching ways to use alternative raw materials in the manufacture of new products due to a potential shortage of bile supply from cows.

The 45-year-old company was originally set up by a consortium of New Zealand meat companies to extract and purify biochemicals from meat processing by-products. Its first products were pharmaceutical intermediaries for the global healthcare market, extracted from cow and sheep bile.

The Manawatu-based company is best known for making high purity bile acids, which comprise the majority of turnover. It’s the world’s second-largest manufacturer of cholic acid, which is used in a range of pharmaceutical and diagnostic applications such as treatments for liver disease.

After Andy Lewis took over the chief executive role in 2010 he decided the company, which now has 150 staff in New Zealand and the UK, had got too diversified and needed to “defend on bile acids”. His strategy involves developing new bile acids which are used in modern western medicines and traditional Chinese (Eastern) medicines.

An NZP business development scientist spent two years travelling the world talking to drug companies and research groups to identify bile acids being evaluated for new therapeutic uses as varied as oncology, neurodegenerative and metabolic disorders including type 2 diabetes and obesity. In one published example, researchers at Penn State have found a bile acid that can turn off a receptor in the gut which has prevented and reversed fatty liver disease in mice and could help treat certain metabolic disorders such as type 2 diabetes and obesity.

Earlier this month, Lewis told the NZBio annual conference in Auckland that future growth opportunities involving bile acids appear “very positive” and the company has invested heavily during the past decade in its infrastructure and regulatory systems to underpin its growth aspirations. In 2009, the company also acquired UK-based R&D company, Dextra Laboratories, which specialises in a range of carbohydrates and blood group products, in order to undertake a more extensive bile acids R&D programme.

“We decided to stop trying to develop products in new fields and specialise on the product group for which we have become identified, and we believe this is a good strategy for other small to medium sized New Zealand companies trying to foot it on the global stage,” he said.

NZP’s market share for bile acids has gone from 25 to 35 percent in the past eight years and profits have been ploughed back into improving infrastructure and R&D.

“That’s always challenging when you have investors,” he said.

NZP got a $49.6 million injection earlier this year from its new controlling shareholder, Archer Capital, to help expand research and development into new products. The Australian private equity firm has a 73 percent stake with the rest held by current and former management staff.

One of the key problems NZP faced with a potential upsurge in demand for bile acids was a “looming tsunami” in terms of its global supply chain of bovine (cow) bile. It identified around 200 million cows worldwide from which it could collect the liquid bile and bring into the country under New Zealand’s strict biosecurity laws and figured it had about nine years at current and projected growth rates to solve the supply conundrum.

It currently collects around 60 million cows’ worth of cow bile and has worked with the Ministry for Primary Industries to increase the number of countries it can import from, which have to have no disease and vets in the abattoirs, from 27 to 72. It also added 70 countries it could collect sheep bile from because it’s chemically identical to that of cows. There are around one billion sheep and goats worldwide “so we’re really as interested in that”, Lewis said.

It also started looking at non-animal alternatives in the “phyto-sterile” or plant space. “We’ve been very successful developing IP in that area and we’re now into scale up and bridging with late stage clinical providers,” he said.

Lewis is not keen on revealing anything about the non-animal alternatives though other sources have indicated sunflower seeds and avocados could be involved.

“We started to turn an ‘oh shit’ moment into what can we do about it,” he said. “The defensive strategy has turned into a positive.”

NZP has confidential supply arrangements in place with some pharmaceutical companies working on the novel bile acid applications and has also done R&D collaborations which are now the subject of patent applications.

While the late-stage clinical drug programmes may bear fruit in the next few years to 2020, NZP’s private capital investors wanted a longer-term strategy in place as well. NZP has been developing its own bile acids using some of the knowledge coming out of the drug research, and trying to find bile acid compounds that target the receptors.

It has developed 472 novel bile acids which had made it through the initial three screenings in the areas of therapy for oncology, neuro degenerative disease and metabolic disease.

“We’ve got six good hits and are now in the hit to lead design phase and working out how on earth a company of our scale can cope with the potential to have several of these and what sort of strategy it really requires,” Lewis said.

(BusinessDesk)


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