A combination of strategic partnerships and production cost-savings in 2013 generated a 24% increase in revenue for the Swiss firm Evolva to £8.7m, according to the company’s financial report to 13 December.
Approximately 90% of total revenue came from research and development (R&D) through partnerships with three global ingredients suppliers (IFF, Ajinomoto and Roquette). Evolva also benefited from licensing income from EV-077 diabetic product, which is out-licensed to Norwegian biopharmaceutical company Serodus, as well as revenue from several research projects funded by the EU and national institutions.
The company is best known for its fermentation-based approach to developing ingredients for the health, nutrition and pharmaceutical markets and has spent last year consolidating key partnerships, including with Cargill and International Flavours & Fragrances (IFF) to finalise the production and launch of natural sweetener stevia and vanilla fragrance vanillin respectively.
CEO Neil Goldsmith explained: “Growth was in line with guidance and almost completely driven by product partnerships. We expect our partnerships to continue to contribute the majority of revenue in the next few years but we will increasingly take control production and marketing of our products, in a similar was to resveratrol, as our infrastructure grows and new products developed, including saffron ingredients which are currently in development.”
The pre-production phase for vanillin was completed earlier this year and a commercial launch date should be announced in the second half of the year. Meanwhile, the Cargill/Evolva joint venture to develop fermentation-derived steviol glycosides entered the pilot phase at the end of 2013 with the first products expected to market by 2015/16. As part of the deal, Cargill agreed to make a CHF4.5m equity investment in Evolva, which could equate to US$7.5m in future returns for the biotech group.
Since acquiring natural antioxidant resveratrol from the stricken Fluxome Sciences in 2012, Evolva has managed to significantly reduce production costs and is preparing for an end of the year launch. Resveratrol originally launched in the US in 2010, but sales were low due to high production costs. It already has GRAS (“Generally Recognised As Safe”) status in the US and Novel Foods authorisation in the European Union for use in Dietary Supplements. Furthermore, a ruling in 2013 by the Japanese Ministry of Health, Labour and Welfare is expected to facilitate the approval process for the product in Japan.
“R&D development has focused on finding gene combinations in yeast cells to generate the highest production rates to reduce production costs and make end-products more competitive. Fundamentally, it’s about making more grammes per litre per day,” said Goldsmith.
Evolva predicts revenues will exceed CHF 10 million (2013: CHF 8.7 million) in 2014. Net cash outflow from operating and investing activities is forecast to increase to CHF16-18m, primarily driven by stevia and resveratrol.