Phamachem signs deal for vertically-integrated, US-made astaxanthin

By Hank Schultz

- Last updated on GMT

Related tags: Marketing

Phamachem signs deal for vertically-integrated, US-made astaxanthin
Avoca, a division of New Jersey ingredient supplier Pharmachem Laboratories, has signed a deal to commercialize astaxanthin with biotech company Synthetic Genomics Inc.  SGI will supply the biomass and Avoca will do the final extraction and marketing.

SGI has been working on developing its particular strain of Haematococcus pluvias​ for some time.  The production facility is located in the Imperial Valley about 2 hours east of San Diego, making for a unique story for the product, according to Paul Borrell, vice president of marketing and sales with Pharmachem.  Burrell and SGI president Jon Getzinger met with NutraIngredients-USA at the recent Institute of Food Technologists show in New Orleans to discuss the deal.

Vertical integration

“Astaxanthin is well known as being the best antioxidant in the marketplace,”​ Borrell said. “It has been in tight supply.  So we are coming to market at a good time with a good product. With the production facility in the Imperial Valley and doing the extraction in New Jersey, this product is vertically integrated and it is a USA-made product.”

Haematococcus pluvias ​is a photosynthetic organism.  Some producers, siuch as Kona, Hawaii-based Cyanotech, grow the organism in open raceway ponds, whereas others, such as Israel-based Algatechnologies, use a closed bioreactor system (a series of tubes in the case of Algatech). Getzinger was coy about SGI’s precise technology, but did say the company is using a mix of approaches.

“We’re please to work with them, from their technical capabilities to their ability to commercialize a particular strain,”​ said Getzinger.

The multi-year supply agreement also provides Avoca with exclusivity for product sales in North America. Pharmachem Laboratories will be responsible for marketing and sales. SGI is developing this product through their Genovia Bio business unit, which is responsible for the development and commercialization of algal-based food, chemical and fuel products. Financial details were not disclosed.

SGI has a technology that reportedly supplies a higher level of astaxanthin.  To start with the company will be providing 7.5% astaxanthin oleoresin.  The company said it expects that concentration will increase over time as the algae strain and production technology is improved.

Mix of algae approaches

"We looked at several companies to partner with on this important ingredient,"​ Jim Flatt, resident of SGI's Genovia Bio, said in a statement.  "Avoca is the strong partner we sought who was capable of both processing high quality oil and delivering the product to the market through Pharmachem's professional sales and marketing organization.  Genovia Bio has rapidly developed two commercially-ready products, one each from heterotrophic (sugar-utilizing) and phototrophic (light-utilizing) algae, which distinguishes Genovia Bio in this field.  It's exciting to see the pipeline of products emerging from our investment in algae product technology.”

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