The following is a Q&A interview with Avivagen CEO Cameron Groome
Thanks for speaking with us today Cameron, can you tell me about Avivagen?
Avivagen Inc. (TSX: V.VIV, Stock Forum) has discovered a whole new class of natural products that enhance immune function. Our technology is based on the discovery that many of the benefits of commonly-known carotenoid antioxidants only arise after they have been transformed by being fully-oxidized.
This discovery is revolutionary and changes the understandings of the activities of many health supplements, such as beta-carotene, lutein, lycopene, astaxanthin and others – in fact, most of the best known antioxidant health products.
What kind of results have you seen from your products?
We are focused on developing the animal health applications of our technology, as this is a faster route to regulatory approvals and product sales. In animal trials, we’ve seen our OxC-beta maintain or enhance the health of both companion animal and livestock species. This includes dogs, chickens, pigs, cattle and even fish.
Notably, we’ve demonstrated meaningful benefits to the skin, coat and mobility of dogs. We’ve also shown enhanced growth (poultry & swine), improved feed conversion efficiency (poultry & swine) and disease protection (poultry and cattle). These benefits are very important to pet parents and economically relevant to livestock producers.
Who do you sell to?
We sell three products based on our technology and each has a different target market. Oximunol Chewable tablets for dogs are sold to veterinarians by Bayer’s animal health sales force. Avivagen is test marketing its second companion animal product, Vivamune Health Chews, which is a direct-to-consumer product in the United States. Our third product is OxC-beta premix for livestock, which we have begun to sell to large livestock and feed producers in Asia.
Is your process proprietary?
Avivagen transforms these compounds into a mix of naturally-occurring and immunologically-active bio-polymers. This process and its resulting products are unique and proprietary to Avivagen. Our principal product, OxC-beta, has been shown to enhance the body’s ability to recognize and respond to bacterial infections, while also reducing inflammation.
This is a very desirable mix of product activities and may be applicable to some important health issues.
Can you tell us about the partnership you have with Bayer?
Bayer Animal Health is our partner for United States distribution and marketing one of our products, Oximunol Chewable Tablets for dogs. We are very pleased to have a leading animal health company as our partner for this new companion animal health supplement. Bayer has taken delivery of a stocking order of Oximunol (November, 2013) and we’re looking forward to seeing results from their marketing efforts in 2014.
What are your plans for the first half of 2014?
My latest letter to shareholders highlights the work we’re doing in Asian livestock markets. Specifically that we’ve built relationships in six of the world’s largest livestock producing and consuming nations - working with potential customers to help them field test OxC-beta in their species of interest. We’re hopeful that positive results from such trials will lead to material product orders, perhaps as soon as the first half of 2014. We’ll disclose further national registrations and sales from Asian countries as they occur.
Does the company generate revenues?
Yes. Currently, corporate revenues are in the hundreds of thousands per year – from a combination of companion animal product sales to the United States, livestock sales to Asia and the provision of chemistry services. These revenues are not yet enough to cover our operating costs of about $2.0 million a year. We estimate that we need about $3.5 million in top-line revenues to break-even, a number that is achievable from penetrating even a tiny portion of our companion animal and livestock markets. Our overall sales potential is large enough for us to become very profitable.
Why should an investor consider paying more attention to Avivagen?
We have valuable and proprietary products directed to the large companion animal and livestock markets that we’re positioning to become big winners:
- In companion animals, we have multiple products and marketing channels in the United States - the world’s largest consumer market.
- For livestock, relationships with leading companies in some of the world’s largest livestock production markets and for the most commercially important species.
We expect 2014 to be a pivotal year and are committed to developing Avivagen into a pre-eminent creator of products for companion and food animals. Our company is skilled in validating product applications, creating commercially-viable product formulations, managing logistics and building stakeholder relationships. We are employing these strengths to generate exceptional and sustained value for our shareholders.
Disclosure: Avivagen is a Stockhouse client.