Dunedin based biotechnology company, BLIS Technologies Ltd (NZX: BLT) advised shareholders at its Annual General Meeting that it has achieved a significant company milestone today with its oral probiotic called BLIS K12 by obtaining GRAS status, which now enables this probiotic to be included as an ingredient in food products within the United States.
The US Food and Drug Administration (FDA) requires all ingredients used in food manufacturing to obtain a standard for safety, which is referred to as GRAS (Generally Recognised As Safe). Until now the Company's BLIS K12 probiotic has only been able to be sold as a dietary supplement, but today's announcement of GRAS status, will dramatically expand market opportunities for the company and enable the BLIS K12 probiotic to be marketed and sold to all food manufacturers in the United States.
The programme has taken two years to achieve and follows an FDA-approved process that allows a company to obtain GRAS status by consulting with an independent panel of world leading experts in disciplines such as microbiology and toxicology to determine if the BLIS K12 probiotic meets the FDA's stringent criteria for safety.
Dr Barry Richardson, CEO of BLIS Technologies believes that this also makes it easier for the company to market into other countries because GRAS status is well recognised internationally as a gold standard for ingredient safety. The BLIS K12 probiotic is already approved as a food ingredient in both Australia and New Zealand but its GRAS status in the United States effectively launches this novel probiotic ingredient into the global market for food manufacturing. BLIS Technologies Ltd wishes to acknowledge the support of New Zealand's Ministry of Science and Innovation in providing funding assistance for one of the pivotal safety studies, which has now set the global standard for safety with oral probiotics.
The company has plans to immediately start promotion to food manufacturers such as ice cream, yoghurt and other dairy producers in the United States. Dr Richardson also told shareholders that the company has acquired Dunedin based ice-cream company, The Gourmet Ice Cream Co. Ltd. He indicated that this investment in the ice-cream manufacturer was a strategic investment for two reasons. Firstly, it provided necessary cash flow to assist in the global roll out of BLIS K12 to food manufacturers, now this ingredient has achieved GRAS status and secondly, the ice-cream manufacturer will provide an excellent opportunity to get the probiotic BLIS K12 into frozen dairy products and help to create a novel new category of ice-cream with a specific health benefit for consumers.
Dr Richardson advised shareholders that a persistently high New Zealand dollar and lower than expected sales for the Company's branded ingredients, BLIS Technologies would likely sustain an increased operating deficit in the current financial year. Accordingly, additional funding will be required to cover the forecast operating deficit and ensure that an appropriate capital structure is maintained, which will provide additional working capital as well as fund the development of innovative food applications and the acquisition of the Gourmet Ice Cream Co. Ltd.
It is the intention of the Board of Directors to initiate a Share Purchase Plan in conjunction with a share placement on the same terms to eligible investors. The terms of the Share Purchase Plan including the price for new shares will be announced in coming weeks.
In an additional move to ramp up its commercial activities, Dr Richardson also explained to shareholders that the company has now launched a new e-commerce capability to its website. The BLIS Technologies' company website has now started selling its own pharmacy based products directly to consumers throughout New Zealand and overseas over the internet.