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ADM Capital invests in PharmaZen

TAGS: Business
Cibus Fund, advised by ADM Europe, has agreed to invest in PharmaZen for at least three years.

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 company’s portfolio of ingredients covers joint, bone, muscle and digestive health, along with marine and bovine collagen and animal nutrition. Many of these value-added ingredients are byproducts of the food industry that would otherwise go to waste, improving the efficiency of food production.

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 invest for at least three years and to work with existing management to invest this capital in new facilities 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 per share. The issue price, which represents a 13.1% discount to the volume weighted average price of the last 12 months, recognizes the size of ADM Capital Europe’s investment and the significant expertise ADM Capital Europe 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 completes.

“We are delighted to welcome the Cibus Fund to the share register and Damon to the board,” said PharmaZen Chairman Ken Fergus. “PharmaZen is the Cibus Fund’s first New Zealand investment and for us to have gained the attention of an organization 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 with 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 production facility on PharmaZen’s recently purchased property in Rolleston. Construction of the facility is planned to begin in February and be operational August 2021. Once complete, it would house three more 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 more expansion currently being designed with a scheduled build date of mid-2021. The new facility will be purpose built to house six, two metric ton freeze dryers specifically for high value pet products.

“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 $722 billion industry by 2027 from $383 in 2019,” said Damon Petrie.

He continued, “Its portfolio of nutraceutical ingredients and its AiOra range of branded products are high quality and aimed at fast growing market segments. The range also benefits from New Zealand’s clean green reputation and the country’s record for producing high-quality food and ingredients. We are looking forward to working with management and the Board to realize the tremendous potential we see for the business.”      

PharmaZen’s AiOra branded supplements range is aimed at applications such as improving gut, brain, vascular, bone and joint health.

PharmaZen trades under the name Waitaki Biosciences.

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