Wool Equites' Canesis sale goes unconditional

By staff reporter

- Last updated on GMT

Related tags Venture capital

New Zealand Wool Equities is has reached an unconditional agreement
to sell its research, development and IP operation Canesis to
state-owned Agresearch, leaving the holding company with
nutraceutical company Keratec as its only major operation.

Canesis researches potential uses of sheeps wool - which New Zealand has in abundant supply - and tap these to add value for the sheep-farming industry. Keratec is one result of such research, extracting soluble keratin from wool for use in nutraceuticals, cosmetics, and bone regrowth technology.

Through shoring off three other subsidiaries Wool Equities has raised a total of NZ$15.7m. The strategy indiates confidence in Keratec's potential.

In its most recent business update in October, Keratec said that product sales grew four-fold in to $800,000 in 2005-6 and are expected to reach over $3m in 2006-7. It introduced its functional keratin to the nutraceutical market for joint health in March 2005, and followed up 12 months later with a version for skin health (oral and topical).

Keratec, which descibes itself as still an early stage business, has said it is "in the late states of negotiating near-term supply agreements with blue-chip multinational consumer goods manufactuers in he personal care sector and for medical devices in wound care"​.

It may also need a larger New Zealand-based manufacturing plant than its existing facility in Lincoln, to keep up with growing demand.

The latest news on Canesis follows shortly after another apparent validation of Wool Equities' direction, with an offer from life sciences venture capital fund BioPacificVentures to acquire an eight per cent stake in the company.

A source close to Wool Equities told NutraIngredients-USA.com that BPV is looking to increase its share to a take over position of 20 per cent. Moreover a major investor in BPV is Swiss food giant Nestle, which is positioning to be a major force in health and wellness.

Keratec says it scores well on all the indicators typically considered by investment analysts to value biotechnongy stocks: a strong product pipeline or niche technology that is a platform for a range of products; control over intellectual property; research or corporate collaboration partner; products aimed at large and under-serviced markets, or providing breakthrough approaches; technology research credentials, efficacy and manufacturability; and cash researches and efficiency of expenditure management.

Wool Equities sale of Canesis was first announced on a conditional basis on November 13. It is expected to close on January 3.

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