Avivagen CEO Cameron Groome was sounding an upbeat tone Friday morning after his company announced it had secured $3.6 million in new funding in a private placement.
“It’s a hell of a strong support,” said Mr. Groome, whose Ottawa-based firm produces immune-boosting natural health compounds using beta-carotene that are designed to lessen the need for antibiotics in livestock feed.
The placement involved the sale of 60 million units of Avivagen (TSXV:VIV) stock to company directors and management. The influx of cash will help finance the firm’s operations over the next 18 months to two years “absent sales breakthroughs we hope to achieve,” Mr. Groome said.
Specifically, the funding will go towards completing additional studies of Avivagen’s core product, a compound called OxC-beta, and boosting the company’s efforts to bring the product to market.
Mr. Groome said one of his top priorities is hiring someone to assist him with business development.
“Frankly, I’m wearing too many hats,” he told OBJ. “There’s a physical limit on how many days a year I can be travelling.”
Avivagen, which now employs 17 full-time workers and four consultants, is gaining traction in the Asian market, Mr. Groome said.
It has the green light to sell OxC-beta to feed producers in Thailand and Taiwan and is making inroads in China, where the country’s largest food processor, COFCO Group, is collaborating with Avivagen on a trial to test the product’s effectiveness at replacing antibiotics in swine feed. Another Chinese consortium, Jintai, is partnering with Avivagen to commercialize the product there.
UNAHCO, the largest feed producer in the Philippines, is conducting similar tests with OxC-beta in poultry feed.
So far, the tests are going well, Mr. Groome said, and producers in Korea and Vietnam are also interested in the product.
“It’s kind of fun to have people starting to wake up to this,” he said, explaining Avivagen targeted Asia because of the region’s size, its “intense interest” in the product and its “regulatory pragmatism.”
“They’re saying, ‘What we’re doing now with the quantities of antibiotics is a freak show. If you guys have a better way, bring it on.’”
Mounting evidence has linked the overuse of antibiotics in livestock feed with the rise of drug-resistant superbugs and health problems in humans, Mr. Groome noted.
Earlier this week, Pizza Hut announced it was phasing out food containing poultry that had been dosed with antibiotics, adding its name to a growing number of restaurant chains that have taken that step.
“It’s not just the doctors on this,” he said. “It’s the doctors, the governments, the consumers that are voting with their feet, the restaurants coming in and saying, ‘Geez, we’ve got to get ahead of this issue.’ It’s becoming the new global requirement for livestock agriculture.”
Despite a growing push to find alternatives to antibiotics, Mr. Groome said it’s been an uphill battle trying to get regulatory authorities in his own country on board with OxC-beta, which does not have Health Canada approval.
“Obviously, this is a new discovery,” he said. “It doesn’t fit in any existing category, so until the regulations are updated to reflect a category, it just makes it a more drawn-out process.”
Mr. Groome said he has no idea when or if his product will make it to market in his own backyard, adding many other life sciences companies have simply given up at trying to navigate their way through the “labyrinth” of red tape in Canada.
“Innovation is encouraged in Canada, but commercialization not so much,” he said. “This is one of these cases where a small Canadian company has done something I think pretty extraordinary, and it would be greatly appreciated if we actually get a bit of support.”