Natural selection

Written on the 17 June 2009

Natural product developer BioProspect has negotiated a call option to buy Melbourne-based company Re-Gen within a three-month period. CEO Peter May says the deal could bring in tens of millions of dollars a year from the Chinese market.

PETER May says there are great export opportunities for Australian natural products and if BioProspect decides to go ahead with buying Re-Gen there is the added advantage that the company’s emu oil products have already been approved by the Chinese Ministry of Health.

“The Chinese market, apart from looking for products with an international flavour, also is amenable to natural products and if they’re from Australia then it’s a plus - if you build the right relations, or ‘guanxi’ as they call it, then clearly the opportunity is great for anything relating to consumers,” says May.

He says Re-Gen’s product range would be an excellent fit with the company’s focus on natural products, which include the Bioeffectives animal health products and Termilone termite solution.
“We are very pleased to have secured this opportunity, which has the potential to generate long-term benefits for shareholders as well as Australian producers and the environment,” he says.

“We’re not actually selling any products yet, but we have licensing deals. What we need is product approvals and that’s what Re-Gen has — so if we buy we just have to tie up distribution and negotiate pricing deals.”
The company is also taking a global approach with its existing products as it has made agreements with US companies to sell Termilone and has global distribution arrangements with the Bioeffectives product range.
While the small Brisbane-based company is being cautious with cash flow, May says the purchase would still keep BioProspect in a positive financial position.

“We don’t want to raise money on the market but we want to generate funds internally and we see it as a positive to stay in the black – it’s our strategy to avoid additional heavy investment.”
BioProspect has four staff and between 20 to 30 consultant scientists and support staff.


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