In financial filings this week, Ottawa-based company says it brought in $939,000 in revenues in its fiscal year ending Oct. 31, 2022, down from about $1.3 million the previous year.
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An Ottawa life sciences company that makes a natural immune-boosting compound for livestock is looking for a new CEO to lead its push for a global breakthrough after racking up tens of millions of dollars in losses since it was founded 18 years ago.
In financial filings this week, Avivagen says it brought in $939,000 in revenues in its fiscal year ending Oct. 31, 2022, down from about $1.3 million the previous year. The firm reported a net loss of $6.1 million, raising its total accumulated deficit to $45.2 million since 2005.
Avivagen issued a news release Tuesday saying it has “laid the groundwork” to open up new markets, noting government regulators in China and Vietnam gave its products the green light last year. The company also touted recent deals with new customers in key markets such as Brazil, the world’s third-largest consumer of animal feed.
CEO Kym Anthony said the company is “implementing various initiatives to accelerate growth” that will include hiring a new chief executive to oversee its scaleup efforts.
In a statement Tuesday, Anthony said the firm’s search for a new C-suite leader will begin “immediately.”
“The board and I remain deeply optimistic about the opportunity for Avivagen and its shareholders, and we believe that the next CEO will have all the tools and relationships in place to expedite a rapid ramp in growth,” he said.
“We also expect to be making changes to the board of directors ahead of the next annual meeting of shareholders. We will provide more updates on these strategic initiatives as they unfold and expect multiple communications on the accelerated growth plan through the next few months.”
Avivagen, which trades on the TSX Venture Exchange in Canada and the OTCQB Venture Market in the U.S., specializes in supplements aimed at replacing antibiotics in cattle and pig feed.
The company says it’s conducted dozens of tests that prove the natural antioxidants boost the immune systems of livestock, helping to ward off disease without the use of antibiotics – a key selling point at a time when health experts are calling the rise of antibiotic-resistant “superbugs” a simmering global health crisis.
Avivagen now sells its products in 10 countries, including Australia, the United States and Mexico. Last year, the company got the green light to launch large-scale trials of its products in China, the world’s largest market for commercial animal feed – a development Anthony predicted would translate into “quite significant revenues” for Avivagen in the long term.
But regulatory approval and market acceptance for Avivagen’s products has been slow to come in many other places.
In a management discussion paper filed this week, the company said its flagship product, OxC-beta, “can take many years to receive regulatory approvals in multiple countries” and faces a “significant degree of uncertainty of receiving approval and subsequent market success.”
That has taken a toll on the company’s bottom line, according to the document.
Avivagen says it is working to gain approval for OxC-beta in other countries, including Costa Rica, Peru, Colombia, Argentina, and Uruguay.
The company, which raised an additional $8.5 million in equity and debt financing in fiscal 2022, said it has hired consultants in those markets to help “expedite the approval process.”
Avivagen said the costs of attaining those approvals are piling up. The company added that even products that face fewer regulatory hurdles, such as its antibiotic-free supplements for pets and humans, “need marketing resources and an effective marketing campaign to attain commercial success.”
As a result, management cast some doubt on the firm’s ability to continue as a going concern.
“Given the uncertainty, extensive time, going concern issues, and financial expenditures involved in moving the products … through the regulatory process from development to market, the Corporation may never be able to successfully develop commercially-viable products,” the document said.
Later, management said that while Avivagen has raised sufficient equity and debt financing so far, “there is no assurance that these ongoing initiatives will continue to be successful.”
