PharmaZen raises $14m to meet global demand as industry booms
Christchurch, New Zealand: Christchurch biotechnology company PharmaZen has raised $14.0 million from an international agri-technology fund to expand its operations amid surging global demand for its nutraceutical products.
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 a t least three years and to work with existing management to invest this capital in new facilitates to accelerate growth.
PharmaZen is issuing the Cibus Fund 35 million new shares, equating to a 13.8% stake in the company, at 40 cents a share. The issue price, which represents a 13.1% discount to the volume weighted average price of the last 12months, recognises the size of ADM’s investment and the significant expertise ADM 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 settles.
PharmaZen Chairman Ken Fergus said: “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 said.
“Building capacity from cashflow and additional debt has made it a challenge keeping up with growth in demand. These funds provide us 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 3000sqm production facility on PharmaZen’s recently purchased 1ha property in Rolleston. Construction of the facility is planned to begin 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 3000sqm 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 said: “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 US$722.5 billion industry by 2027 from US$382.51 in 2019.[1]
“Its portfolio of nutraceutical ingredients and its AiOra range of branded products are high quality and are aimed at fast growing market segments. Its range also benefits from New Zealand’s clean green reputation and the country’s record for producing high-quality, safe 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 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. Its AiOra branded supplements range are aimed at applications such as improving gut, brain, vascular and bone and joint health.
ADM Contact
cibusadmin@admcap.com
About PharmaZen:
PharmaZen (USX.PAZ), which trades as Waitaki Biosciences, is an innovative developer, manufacturer and marketer of science-based, natural, nutritional ingredients and consumer goods. Originally founded in Dunedin, PharmaZen now has the largest solvent extraction facility in the country and operates the largest batch freeze dryer in Australasia. Shares in PharmaZen are traded through the Unlisted securities trading platform.
[1] Nutraceutical Market Size, Share & Trends Analysis Report By Product (Dietary Supplements, Functional Foods, Functional Beverages), By Region, And Segment Forecasts, 2020 – 2027.