Biotech firm toasts fruity fatbuster
The ancient alchemists of yore spent their lives trying to turn worthless lead into gold. Marlborough-based biotech company New Zealand Extracts is pursuing the modern day equivalent - with considerably more success.
The company, which leases land from a winery, takes discarded fruit skins and seeds and transforms them into high-end health and beauty products.
After 10 years of research and production, and many millions of dollars, it's on the verge of something big; specifically, the obesity epidemic.
NZ Extracts' newly formed marketing arm, Tuatara Natural Products, has just launched a weight loss product called Satisfax.
Made of Marlborough-sourced natural grape and kiwifruit extracts, the bio-active ingredients slow down the rate of digestion of food, making people feel full after eating less.
The pill has been four years in the making, with Tuatara and Crown research institute Plant & Food Research pouring $12 million into laboratory and clinical research.
Weight management is a huge and growing market, says Dr Glenn Vile, the company's co-founder and chief technical officer.
"We know a third of the world is overweight."
Before going to market, the company put the call out for 200 "fat mates" in Blenheim to trial the product.
Participants were asked not to change their diet or lifestyle. Of the 52 who took the recommended dose for the full eight weeks, 46 lost weight, averaging close to 3kg.
Two people shed more than 10kg, and many have continued to drop weight long after the trial wrapped up.
While formal clinical trials are under way, the experiment gave Tuatara the confidence to launch.
"We wanted to make sure the science stacked up," says Vile. "Those results got us excited."
Satisfax is now being sold online, primarily to New Zealanders, but with orders also coming in from Europe, North America and Australia.
It represents a major turning point for NZ Extracts, which has traditionally sold the raw materials it extracts on to larger companies, for use in the likes of cosmetics and supplements.
Chief executive Mike Turner says the company now has full control over the production process, from development right through to the customer.
"If we were to sell the product as an ingredient to a multinational, literally we would end up just a small cog in a big wheel," he says. "This gives us an opportunity to do all of that."
The new business model involves rolling out a range of other products manufactured and sold under the Tuatara brand.
Vile says the company previously had a lot of different irons in the fire; researching applications as diverse as biofuel, breakfast cereal and nutrient powders.
In recent years it has narrowed its focus to specific health and lifestyle issues. While details are under wraps, we could expect to see Tuatara-branded digestive health, sports health, anti-ageing lotions and sunscreens emerge in the future.
While competitors are also using antioxidant fruit extracts in the likes of weight loss products, Vile believes Satisfax has a significant point of difference.
The clean, green association with New Zealand production is enhanced by the fact that the company's water extraction method, reportedly top secret, preserves the "natural" status of the product.
By contrast, other competitors use high-volume chemical methods.
The big challenge that lies ahead is telling the story.
"We now believe we've got enough science under our belt, we've got the production to produce quite large volumes," says Vile. "The focus will be to get the word out both nationally, and then globally."
That means getting the right people around the board table, which is currently non-existent after a management buyout two years ago.
The governance change brought Turner, a food chemist, to the company both as an investor and chief executive, but the two scientists admit they lack key skills in other areas.
"This whole consumer marketing side is a little new for us," says Turner. "We're learning."
The other challenge is the usual one facing New Zealand growth companies. "There's never enough money," says Vile. "The single biggest challenge has been financing the operation over 10 years."
The company has attracted some government support in research and exporting, but is open to raising more capital and taking on partnerships to help it expand.
In a growth phase, it's spending money not only on promotion and marketing, but the all-important clinical trials that will separate it from the snake-oil salesmen already cramming the shelves of some health stores.
"We're 100 per cent focused on supporting any claim we make," says Vile. "It's not just hope in a bottle we're selling - we're selling stuff that works."
Turner says the trials are highly expensive, but necessary for regulatory reasons too.
"You have to have good validation of anything you say in the marketplace. If you want to export it, you've got the same regulatory authorities around the world that will demand that."
Vile says Tuatara is working towards aggressive sales and marketing goals, with an eye on the massive size of the potential prize.
"As you can imagine, it's the type of industry where the opportunities for a good return are there."
For Vile, getting to this point has already been a 10-year journey. As a former cancer and food researcher, he is at least used to high-risk, long-term projects where the outcomes are not always certain.
"From that perspective, it's business as usual."
- Sunday Star Times