CHEMAPHOR PROVIDES CORPORATE UPDATE
OTTAWA, ONTARIO, February 10, 2012 – Chemaphor Inc. (the ‘Company’; TSX Venture Exchange: CFR) is pleased to provide a corporate update and review of its activities within the last 12 months and its corporate strategy for the calendar year 2012. Management is focused on several, substantial company milestones, primarily with respect to sales growth, international partnerships and introduction of new pet supplement products.
"2011 was a significant year of transition for Chemaphor," said David Hankinson, CEO of Chemaphor. "The Company, having validated its core intellectual property-protected oxidized carotenoid (OxC-beta) platform over the past years under an R&D framework, has embarked on executing a 3-stage strategy for commercialization of the OxC-beta technology, targeting three major global markets, which in order of ease of regulatory accessibility are:
• Companion animal and pet supplements for dogs, cats, horses and ornamental fish
• Food animal feed supplement alternatives to in-feed antibiotics to increase productivity through enhanced health and safety
• Human health applications based upon enhancement of immune function
The Company has shifted its resources into a commercial organization that will focus on leveraging its OxC-beta products through direct and partnered sales in various vertical markets and global territories.”
Below are highlights of accomplishments from 2011 and of the strategy for 2012:
OxC-beta for Pets: Commercial Launch of Oximunol™ Chewables
In early 2011 Chemaphor, through its subsidiary, Avivagen Animal Health Inc., launched Oximunol™ Chewables for dogs, its first commercial veterinary product, in the Canadian companion animal health market. A marketing launch reached out to thousands of pet parents and more than 1,000 veterinary clinics, resulting in more than 2,000 dogs being given the product. Chemaphor believes that these marketing efforts established brand awareness and allowed Chemaphor to identify the significant sub-populations of dogs that benefited most from the Oximunol™ product. This allowed the Company to follow up with those pet parents who desired to continue regular use of Oximunol™ Chewables. Based on this, Chemaphor is preparing a product line for direct sales to access the broader consumer market.
Progress Towards a Distribution Agreement for Oximunol™ Chewables in the US
Securing a US distribution agreement for Oximunol™ will be a significant milestone for Chemaphor, providing access to the largest consumer base in the world, without incurring any increase in overhead or internal sales, marketing or advertising costs. Accordingly, Chemaphor has been in discussions with several companion animal-focused companies, including several multinationals with a strong presence in the US. Chemaphor hopes to secure an appropriate partner for distribution of Oximunol™ Chewables in the US on commercially reasonable terms. Dave Hankinson added, “our strategy to find partners with a known, reputable and strong footprint in local markets makes imminent sense to Chemaphor from a return-on-investment and total investment perspective: we have done all the work to discover, develop and validate our product platform, which we can then provide as a turnkey solution for a new product opportunity to larger commercial organizations with the know-how and experience to achieve market penetration. This is all backed by our strong intellectual property position and doesn’t require us to invest further into internal sales infrastructure.”
Oximunol™ Distribution Agreements in International Markets
As part of its commercial strategy, Chemaphor has begun discussions with a number of multinational companies and is examining a variety of strategic channels to market Oximunol™ Chewables in various overseas markets.
Oximunol™ Products for Other Companion Animals
Chemaphor is beginning safety tests of OxC-beta in cats in preparation for launching a supplement for cats that will be the counterpart of Oximunol™ Chewables for dogs. Work is also underway to evaluate the benefit of OxC-beta for performance horses.
Development of a Product Line of Pet Supplements for Direct-to-Consumer Sales
Buoyed by the response of pet parents and their dogs to the various benefits of Oximunol™ Chewables, as shown by direct evaluations (e.g., improved coat and skin condition, increased mobility and energy in older dogs), Chemaphor is preparing to develop a branded line of specialized pet products based on OxC-beta. These will be introduced in stages and marketed directly to consumers via the internet, specialty pet stores and pet boutiques.
OxC-Beta as a Non-Antibiotic Feed Additive for Food Safety in Livestock Production
Chemaphor is focused on developing OxC-beta as a non-antibiotic alternative feed additive for promoting health in the global livestock market. The growing global awareness of and concern about the implications for human health of the rise of antibiotic resistance, potentially linked to the heavy use of antibiotics for disease prevention and growth promotion, and the associated food safety risks, are driving a search for alternatives. In the U.S about 70% of antibiotics are used as supplements to promote growth in livestock, as compared to the treatment of human bacterial infections. Recently the FDA took some action to begin to limit the use of certain antibiotics in food animals. In Europe and several other countries the use of in-feed antibiotics has been banned for several years. However, no antibiotic alternative has been developed that has achieved widespread adoption by providing productivity benefits comparable to antibiotics. Chemaphor is hoping to address this situation by developing an OxC-beta product to provide a robust and economical alternative to antibiotics that works by supporting immune health to promote growth and feed conversion efficiency, and yet by its nature is safe for humans and animals alike.
Chemaphor has been conducting research over a number of years to better understand the effectiveness of OxC-beta in food animals. In March, 2011, Dr. Daniel Hurnik presented to the 42nd Annual Meeting of the American Association of Swine Veterinarians, the first results of his research conducted at the Atlantic Veterinary College at the University of Prince Edward Island. Weaned pigs fed a diet containing low levels of OxC-beta showed improved growth performance that was comparable to currently available antibiotic growth promoters. Specifically, feeding OxC-beta to pigs at 10 ppm reduced feed intake by 8.5%, yet provided the same amount of weight gain as pigs fed the control diet. Also, when challenged with a modified live viral exposure, pigs fed 10 ppm OxC-beta showed significantly faster growth (approximately 12%) compared to vaccinated controls. A significant enhanced growth response has also been observed in poultry studies. These findings are consistent with the biology of OxC-beta, which is believed to exert its effect in part through its anti-inflammatory properties in combination with a disease sparing effect.
According to Dr. Graham Burton, President and Co-Founder, “the results indicate to us that there is value in developing safe and effective alternatives to antibiotics for growth promotion. Animals treated with OxC-beta may perform better in maintaining growth in the face of a pathogen challenge.” He also commented, “Feed is the major cost of livestock food production so a natural (non-antibiotic) additive that can improve growth, feed conversion efficiency and overall health of the animals can lead to significant benefits and cost savings for the producer.”
The next steps to achieving the goal of entering the food animal market with an OxC-beta feed additive are to conduct in 2012 strategic safety studies and field trials, as are appropriate for the natural derivation of OxC-beta and the evolving requirements of regulatory agencies for low risk veterinary products. Accordingly, Chemaphor is being provided with expert regulatory consulting advice and is in discussions with international distributors for collaborative and cost-sharing arrangements for commercialization of OxC-beta.
Human Market – Potential Applications
Proof-of-concept studies support the development of a potential immune system-supporting and inflammation-limiting supplement to improve overall health and specifically for skin applications. Although Chemaphor will not be conducting any R&D in the near-term for potential human products, the Company highlights that access to the human supplement and skincare markets remains one of our long-term goals.
Improving Capital Markets Presence
Despite the volatile capital markets in 2011, the average daily volume of Chemaphor shares traded on the TSX Venture Exchange increased by 300% when compared to 2010 and the average daily value traded increased by 200% over 2010. In the calendar year 2011, Chemaphor financed its commercial activities and transition from an R&D to commercial entity through a total of approximately $1.4 million in equity private placements. Chemaphor will be focused in 2012 on continuing to tell its corporate story to a broad investment audience, through marketing roadshows, attending investor conferences, working with investor relations teams and also attending industry and scientific conferences.
Social Media Engagement
As part of Chemaphor’s corporate strategy in 2012, a new corporate website will be created as the primary online access point for Chemaphor Inc. and its wholly-owned subsidiary, Avivagen Animal Health Inc. The new website will provide an online shopping cart for customers to buy OxC-beta pet supplement products directly. The Company will continue to build out its social media strategy in 2012, engaging the market and building awareness through word-of-mouth marketing via Facebook and Twitter.
Please visit us on Twitter and Facebook:
http://it.twitter.com/avivagen,
http://www.facebook.com/avivagen
Industry and Conference Events
Avivagen Animal Health attended several conferences in 2011, presenting and marketing the company, the OxC-beta technology and its newly commercialized product, Oximunol™ Chewables.
Chemaphor attended the following conferences and events:
- American Animal Hospital Association/Ontario Veterinary Medical Association Conference;
- Canadian Veterinary Medical Association Conference;
- Agri-Investment Symposium (Vancouver); - Banff Venture Forum;
- Antimicrobial Stewardship in Canadian Agriculture and Veterinary Medicine Conference; and
- Winter Woofstock Conference
In 2012, Avivagen will continue to attend conferences to build out sales channels and increase brand awareness. “Many of these venues provided Chemaphor and Avivagen a great opportunity to personally meet with hundreds of pet owners and their dogs, while providing information about the Company and its product offerings”, said Graham Burton.
Termination of Vet-Stem License to Focus Resources on Commercial Growth
Chemaphor recently announced that it has terminated its license with Vet-Stem in order to expand the commercialization of its OxC-beta products and allocate more resources towards business development of OxC-beta from both a commercial and international context. The termination of the Vet-Stem license dramatically decreases Chemaphor’s monthly burn, and allows for more optimal utilization of its resources and additional support towards business development activities.
Chemaphor is dedicated to continue advancing its corporate mandate of creating long-term shareholder value. David Hankinson commented, “2012 is a pivotal year for Chemaphor as we prepare to launch OxC-beta in additional markets. Business development activity will be widely supported this year and beyond, as it is our view that the application of OxC-beta in the livestock market represents a highly needed and valuable opportunity for Chemaphor.”
About Chemaphor
Chemaphor, a wellness company, is committed to developing and delivering products to humans and animals to assist in optimizing health and daily quality of life. Chemaphor is advancing product candidates for the food animal market, companion animal market and various, potential human applications. More information can be found at www.chemaphor.com.
Forward Looking Statements
This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with the business of Chemaphor Inc. and Avivagen Animal Health Inc. and the environment in which their respective businesses operate. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions “will”, "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions. The forward-looking statements reflect the current expectations of Chemaphor Inc. and Avivagen Animal Health Inc. regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Chemaphor assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements. The results of treatment described above are based on historical results. Different animals may experience different results from the treatments described above.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For further information contact:
Chemaphor Inc.
Graham Burton
President
Tel: 613-990-0969
g.burton@chemaphor.com
Investor Relations
Sylvain Archambault
President & CEO
Advent Management Inc.
Tel: 1-877-906-2425
s.archambault@go-advent.com
