BLIS Technologies Broadens Products and Markets

BLIS Technologies Broadens Products and Markets

BLIS Technologies reported a $1.28 million loss for the half year to 30 September 2002, comfortably within its budgeted loss of $1.31 million, Company chairman Murray Doyle said today.

The Company’s cash position is in line with budget, showing a favourable variance of $0.20 million on total funds available of $3.72 million.

BLIS K12 Throat Guard sales had been affected in the last few months by production being suspended while Medsafe reviewed our manufacturer’s procedures for handling live bacterial organisms. Although manufactured under accredited Good Manufacturing Practice (GMP), it is a novel product by New Zealand standards and hence Medsafe’s interest.

As a result of the break in production, stocks became depleted and the Company was unable to take advantage of the full demand for the product over the key winter months of August and September.

With production back on stream in late September, it has been encouraging to see sales match forecast levels over the past six weeks. This is significant as it is at a time when pharmacies are gearing up for their summer products.

Pharmacies have been most supportive of BLIS Throat Guard, and in our independent tracking research viewed the launch as having been very successful, and were extremely supportive of the rollout of further BLIS related products.

If we were to replicate the New Zealand result, remembering that it is only the first part season, on a per head of population basis this would translate to potential sales of $3 million in Britain, $4 million in Germany and $14 million in the United States.

To hasten the international registration of BLIS K12 Throat Guard products we are working with regulatory agents in the United States, Europe and Australia. International food ingredients giant DANISCO is also collaborating in this respect in Germany. Agent feedback indicates we can achieve registration within a reasonable time frame, but for individual markets we will need to make minor changes to product claims and information so as to comply with local regulatory requirements.

In Europe we have agreed to toxicity testing with a recognised EU facility in addition to our existing comprehensive safety data. In the United States the lozenge will be modified to a chewable tablet to meet the local regulatory requirement.
None of the changes required in the United States or European Union will add significantly to the cost of registration, although it will mean missing the start of the winter season in the German market.

The initial registration of Streptococcus salivarius K12 will pave the way for a rollout of products that are based on similar strains. This includes our new dental product to be launched in 2003.

A distribution agreement for the K12 throat lozenges has been signed with a distributor for the Korean market, and it is anticipated that registration will be completed and orders placed early in the new year.

Both health professionals and consumers have shown considerable interest in BLIS producing bacteria to prevent undesirable infections and this will undoubtly underpin our international rollout of BLIS K12Throat Guard and future BLIS products.

Earlier this month we announced BLIS Bio RESTORE would be launched in early 2003 in collaboration with international food ingredients giant DANISCO.

BLIS Bio RESTORE is a high dose, three day course containing both the K12 beneficial oral bacteria and strains of beneficial intestinal bacteria including the HOWARU RHAMNOSUS and HOWARU BIFIDO strains licensed from DANISCO.

Pharmacists have been seeking a quality product for intestinal health to complement the oral beneficial bacteria in BLIS K12 Throat Guard. The British Medical Journal published a meta analysis recently on the benefits of intestinal probiotics following antibiotic use, and this has raised further interest within the healthcare profession. BLIS Bio RESTORE will be sold in pharmacies.

BLIS Technologies has carried out widespread screening and testing to ensure BLIS Bio RESTORE contains the strains of intestinal bacteria most suitable for post antibiotic use.

The work done by BLIS Technologies’ research team in understanding the attributes of beneficial strains of bacteria gained through the development of BLIS K12 Throat Guard is world class and can be applied across a number of therapeutic areas.

The new HOWARU strains are amongst the most thoroughly researched strains worldwide and DANISCO has acknowledged BLIS Technologies’ further testing and screening work as significantly adding to the wealth of data on these strains.

BLIS Technologies has an exclusive license on this combination of strains for the New Zealand market, with the intention of then pursuing other international opportunities on a market by market basis.
DANISCO’s involvement represents a significant development for the company. A Copenhagen publicly listed company with annual revenues in excess of $US1.6 billion ($NZ3.2 billion) in 2001, DANISCO is the world’s largest supplier of food ingredients to dairy and other industries. DANISCO has agreed to assist in the registration of the BLIS K12 Throat Guard in Germany and is an important partner in the internationalisation of BLIS Technologies’ portfolio.

The BLIS tooth decay product under testing is in the form of a lozenge taken twice daily after tooth brushing, and contains Streptococcus salivarius ‘MIA’ bacteria that inhibits the re-growth of Streptococcus mutans, a key cause of tooth decay.

Successful pilot studies on colonisation have been carried out and large scale efficacy trials in association with the University of Otago Dental School will begin in February for a six month term.

This is an exciting opportunity with huge international market potential. A patent application has been lodged and it is intended to have a commercial product in the market within 12 months.

A throat spray to complement BLIS K12 Throat Guard has been developed and will be on the market before next winter.

The Company is continuing its work on products for bovine mastitis, middle ear infections, skin infections, as well as screening for further opportunities amongst the extensive collection of BLIS producing organisms purchased from the University of Otago.

The highly successful launch of BLIS K12 Throat Guard and the strong demand for more products gives the company tremendous confidence for its future expansion.

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