- It will be a subsidiary for producing and marketing Omega-3 DHA.
With its Omega-3 DHA industrial production and development process at an advanced stage, Neol Bio has decided to set up a subsidiary Company (“Neol Nutricional Products”) in light of the interest shown by national and international investors.
Over recent months and according to its Strategic Plan, Neol Bio has made substantial progress on industrialising the production process for Omega-3 DHA (docosahexaenoic acid) after developing a highly efficient production procedure using selected strains of microalgae.
To continue development, it will increase capital by EUR 3 million and expects to count an institutional partner amongst its investors. These resources will go towards completion of the production phase, regulatory approval, the creation of the distribution network and phase 1 of the production plant. Neol Bio expects this activity to represent 80-90% of the company’s business volume over coming years. With this in mind, Neol Bio forecasts that it will capture a conservative 1% during its first year of activity and reach a 3.25% market share in its fifth year.
Currently, more than 90% of the Omega-3 consumed in the world comes from fish oils, a source with considerable limitations for future growth, in addition to the risk of containing contaminants. Microalgae are the best alternative as they are free from these risks and focussed on the “premium” segments of the market. It is estimated that these oils from microalgae represents a market of EUR 349 million (7,630 tons), which is still low but has growth rates of over 12% annually, more than 4 times the global growth of Omega-3.
Omega-3 DHA, the best nutritional supplement for delaying cognitive impairment
DHA is the most abundant Omega-3 fatty acid in the central and peripheral nervous system, making up 25% of the total fatty acids in the cerebral cortex, 30% in the retina and 60% photoreceptor cells in the retina (cones and rods).
Most western diets are deficient in long-chain Omega-3 and several clinical studies have shown that nutritional DHA supplements in the diet achieve improved neuro-protector levels and delay cognitive impairment.
Progress in the development of the Omega-3 DHA Business Plan
Neol Bio has started the “Substantial Equivalence” process to have its product approved. Samples of the product are already being produced at the Antibióticos de León facilities and equivalence is expected to be obtained by Q4 2016.
Neol Bio is already negotiating supplying conditions with multinational baby food companies and distributors of ingredients for the nutritional supplement sector. The Company is also negotiating distribution agreements with international groups for some geographical areas. Some of these groups which have shown interest in becoming investors in the subsidiary company, Neol Nutricional Products, which will produce the Omega-3 DHA.
Neol Bio expects commercial production of Omega-3 DHA to start immediately after obtaining Substantial Equivalence and, in any case, during the first six months of 2017.