BlueOcean to debut high phospholipid omega-3 shrimp oil via licensing deal with Neptune
“It’s an interesting agreement in that, first, it validates what we are doing with out shrimp oil but also gives us exclusivity in the North American market for our shrimp product,” Randy Uens, vice president of global sales and marketing of BlueOcean told NutraIngredients-USA.
For raw material, BlueOcean, based in Toronto, uses the leftovers of the processing of shrimp for human consumption from three species caught primarily off the coasts of Labrador and Newfoundland: Pandalus borealis, Pandalus montagui, and Pandalus jordani. The patents in question are Neptune’s composition and extraction patents on the production and sale of marine derived oil products containing phospholipids. The license allows BlueOcean and its shrimp joint venture affiliate to produce and sell shrimp oil products in the nutraceutical, dietary ingredients, natural health products, functional food and food supplements markets. The medical food, drugs and drug product markets are not included.
Uens said getting Neptune to agree with the deal was a matter of helping them understand the positioning of the eventual ingredient.
“The positioning of the product is unique. We are not going after the krill market. We are positioning it as more of an astaxanthin product. We have a really high astaxanthin content in the raw material, about 6,000 ppm, whereas krill is more like 1,500 ppm,” he said. The shrimp are also high in phospholipids, he said.
The cold water shrimp fishery is relatively new, Uens said. Many of the companies involved in the fishery turned to it after the Grand Banks cod fisheries were closed because of a collapse of stocks. The shrimp, which have common names such as Northern Prawn and Pink Shrimp, end up mostly as smaller cocktail shrimp and for sushi in Asian and European markets, Uens said. They have higher astaxanthin content simply because of their environment, he said.
“It’s all a matter of the algae they are exposed to,” he said.
The specifications of the final product are still in development, Uens said, so he was not in a position to quote a dosage of astaxanthin as the product will appear on the shelf. The company is in negotiation for lining up a toll processor for the oil, he said. For companies supplying formulated astaxanthin products in market place at the moment, such as Valensa and Cyanotech, recommended dosages range from a low of 2 to 4 mg/day to 10 mg or more.
The ingredient has a potentially attractive sustainability story to tell, Uens said. In addition to using a raw material stream that was essentially being discarded before, the fishery itself is certified as sustainable by the Marine Stewardship Council.
The commercial terms of the License include BlueOcean paying Neptune a minimum yearly cash royalty, and a royalty per unit of product sold. As well, an initial upfront payment will be made through the issuance of 3,750,000 shares of BlueOcean at a price of 0.20$ per share. Closing of the transaction is subject to the approval of the TSX Venture Exchange. The other financial terms of the license are confidential between the parties. Closing of the transaction is being done at arm’s length. No finder’s fee is being paid in connection with this transaction.
Other omega-3 streams
In addition to its marine ingredients, BlueOcean (which changed its name in June from Solutions 4 CO2) has also been working on extracting omega-3 oils form algae. The company has an algae production approach that uses off the shelf components, such as commonly-available 250-gallon totes. The technique has been validated with research collaborators in Canada, but Uens said potential partners were interested in a third-party validation, so the company teamed with the Arizona Center for Algae Technology and Innovation (AzCATI) for a pilot run of its technology.
“That should be completed very short term and once it is completed we are open to entering into a joint venture with another company,” Uens said.