Leading investment firm invests in new CSIRO health technology
Published 08-AUG-2019 17:16 P.M.
5 minute read
Hey! Looks like you have stumbled on the section of our website where we have archived articles from our old business model.
In 2019 the original founding team returned to run Next Investors, we changed our business model to only write about stocks we carefully research and are invested in for the long term.
The below articles were written under our previous business model. We have kept these articles online here for your reference.
Our new mission is to build a high performing ASX micro cap investment portfolio and share our research, analysis and investment strategy with our readers.
Click Here to View Latest Articles
BioScience Managers (BSM) is one of Australia’s leading international healthcare investment firms.
The CSIRO is Australia’s most loved, respected and revered science and research organisation, responsible for fast Wi-Fi, Aerogard and polymer banknotes among many other notable discoveries. Currently it is working on the first gravitational waves in space, growing gluten-free grains, 3D-printing body parts and pioneering new renewable energy sources.
The estimated present value of benefits from the CSIRO’s work is around $3.2 billion per year, so it's no surprise that the CSIRO and the rather astute BSM would eventually cross paths.
The pair has linked hands, following BSM’s $5.5 million investment in Sydney-based nutrition technology company, Pharmamark Nutrition Pty. Ltd.
The funds will go toward the development of CSIRO’s microencapsulation technology for Pharmamark’s IntEncapTM product for food and beverage applications.
IntEncapTM technology is an innovative technology for lipid and bioactive nutrition, by which bio-active ingredients from marine and algal oils and vegetable and fungal oils are “microencapsulated” for food and beverage applications. The technology fits perfectly with the growing field of “functional food,” in which food contains health-giving enrichment.
Pharmamark has its sights firmly set on the US$62.5 billion ($89.3 billion) global baby milk formula market.
It will also use funds for the completion of its spray dryer facility in Thailand. The spray dryer facility will also microencapsulate other nutrition lipid oils and fats, including vegetable oil, OPO (sn2-palmitate, a fat found in human breastmilk) and anhydrous milk fat – as well as sensitive omega-3 and omega-6 polyunsaturated fatty acid (PUFA) oil – for a range of dry-blended infant formula and medical food products.
“We’re delighted to make a substantial investment in Pharmamark and its world-leading technology,” says Bruce McHarrie, Special Advisor at BioScience Managers.
“The Pharmamark team is an excellent mix of expertise: Guy Drummond (Pharmamark chief executive officer) has been associated with this CSIRO technology for many years, and the rest of his executive team have very strong backgrounds in critical areas such as the infant formula market, the manufacturing process – including microencapsulation – and the omega-3 and omega-6 product categories.”
Dr Amanda Gillon, COO Investments at BioScience Managers says that BSM has invested in Pharmamark with a great deal of confidence.
“We have a high degree of confidence in the technology, the product and the level of demand in the targeted markets,” Gillon says. “And the calibre of the management team is always a crucial part of an investment decision for us.”
How does the technology work
The IntEncapTM technology uses a flexible protein and carbohydrate base, on which the specific nutrients are loaded, with an emulsion film then applied as a protective barrier, following which the microencapsulated nutrients are incorporated into a spray-dried powder.
In this manner, a range of different types of nutrients can be loaded into shelf-stable powder products suitable for infant formula and a range of human food formulations, with a high degree of customisation possible.
Pharmamark’s primary focus is the omega-3 DHA infant formula market in Asia and Oceania. DHA (docosahexaenoic acid) is a type of omega-3 fat, known to support brain function and eye health: a human body can only make a small amount of DHA from other fatty acids, so it needs to be taken in directly from food or a supplement.
The human health benefits of omega-3 fatty acids – usually derived from oily fish – in the diet have been well-documented, and this has assisted in developing the expanding global market for omega-3 products.
Here’s a look at why omega-3 is a crucial part of your diet.
The benefits include, helping to prevent and manage chronic diseases, including heart disease, rheumatoid arthritis and age-related macular degeneration (AMD)-like vision loss in adults and elderly people. Mental acuity in the elderly and supporting memory function in early Alzheimer’s disease is also an area with significant research focus on the role of omega-3 fats.
Thus, the importance of DHA cannot be understated.
The European Union (EU) recently revised its regulations for infant formulas, increasing the minimum quantity of DHA required.
Other jurisdictions are following suit.
New regulations in China will likely see a doubling in demand for DHA in infant formula and follow-on formula. It is worth reiterating the point that the retail value of the global baby milk formula market is expected to reach US$62.5 billion ($89.3 billion) by 2020.
More about BSM
The recent BSM investment comes from one of its Australian based funds and demonstrates a continuing commitment to the development and commercialisation of life science technology and products in the region.
The Melbourne-based investment firm was established in 2000 and currently has four funds under management:
Current funds are:
• Asia Pacific Healthcare Fund II
• BioScience Managers Ventures I
• BioScience Managers Translation Fund I
• Downing FOUR VCT plc – Healthcare Share Class
BSM is focused on well-informed, high return investment decisions and operates a high value-add model, providing assistance and support to portfolio companies via its global team and international network of independent industry advisors.
General Information Only
S3 Consortium Pty Ltd (S3, ‘we’, ‘us’, ‘our’) (CAR No. 433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information and is for informational purposes only. Any advice is general advice only. Any advice contained in this article does not constitute personal advice and S3 has not taken into consideration your personal objectives, financial situation or needs. Please seek your own independent professional advice before making any financial investment decision. Those persons acting upon information contained in this article do so entirely at their own risk.
Conflicts of Interest Notice
S3 and its associated entities may hold investments in companies featured in its articles, including through being paid in the securities of the companies we provide commentary on. We disclose the securities held in relation to a particular company that we provide commentary on. Refer to our Disclosure Policy for information on our self-imposed trading blackouts, hold conditions and de-risking (sell conditions) which seek to mitigate against any potential conflicts of interest.
Publication Notice and Disclaimer
The information contained in this article is current as at the publication date. At the time of publishing, the information contained in this article is based on sources which are available in the public domain that we consider to be reliable, and our own analysis of those sources. The views of the author may not reflect the views of the AFSL holder. Any decision by you to purchase securities in the companies featured in this article should be done so after you have sought your own independent professional advice regarding this information and made your own inquiries as to the validity of any information in this article.
Any forward-looking statements contained in this article are not guarantees or predictions of future performance, and involve known and unknown risks, uncertainties and other factors, many of which are beyond our control, and which may cause actual results or performance of companies featured to differ materially from those expressed in the statements contained in this article. S3 cannot and does not give any assurance that the results or performance expressed or implied by any forward-looking statements contained in this article will actually occur and readers are cautioned not to put undue reliance on forward-looking statements.
This article may include references to our past investing performance. Past performance is not a reliable indicator of our future investing performance.