New Zealand Pharmaceuticals Ltd

It’s exciting times for Manawatu biotechnology business New Zealand Pharmaceuticals (NZP), with new products and markets set to continue and accelerate its rapid export growth of the past four years and enhance its already impressive international track record.

NZP was formed in 1971 to extract and purify biochemicals from by-products of New Zealand’s meat processing industry. This includes cholic acid, extracted from bile, used in vaccine manufacture, drug delivery and as diagnostic ingredients. Commercial Manager Mike Callagher says to this day cholic acid remains NZP’s core export product, enjoying a global leadership position built on quality and service.

NZP recognised early on that diversification was a key driver of growth for the firm, both in terms of markets for its products and in its product portfolio.

“Pharmaceutical products have a natural life cycle and are constantly being replaced by better cheaper or more generic products,” explains Mr Callagher. “Our strategy for our foundation bile products has always been to maintain a spread of uses and we’ve also developed a strong market for bile ingredients outside of the pharmaceutical industry.”

In the 1990s following increased public awareness of BSE and other animal related disease, NZP refocused its market development on plant extracts, researching and testing several product lines for use in the international health food, cosmetic, biotech and aquaculture industries.

“Our Just The Berries branded blackcurrant products aimed at the international functional foods sector are now bringing the much awaited returns, with a three-fold increase in sales over the last 12 months. We’ve also been working closely with an Australian company to bring a range of seaweed extracts to the market which has seen significant increases in sales over the past year.”

NZP’s other big focus has been the burgeoning niche of synthetic biopharmaceuticals. Its symbiotic relationship with the carbohydrates team at Crown Research Institute Industrial Research has enabled the successful commercialisation of this novel technology, enabling NZP to establish niche products with applications in treating cancer and heart disease.

The successful development of the synthetic carbohydrates market provided the commercial basis for NZP’s new $10 million specialty manufacturing facility that opened earlier this year.
Mr Callagher says the new facility has given NZP a platform to accelerate its export growth rapidly, providing the firm with much greater operational capability and advanced compliance levels, allowing NZP to position itself internationally as a significant Good Manufacturing Practice supplier.

Geographically NZP has traditionally focused on Europe, the United States and Japan, as these are the regions in which the key pharma and biotech markets and sectors have tended to cluster. However Mr Callagher says the firm is now taking a more systematic approach to market entry, developing and strengthening key agent relationships in existing and new market such as India, South America and Eastern Europe, where it is assessing opportunities for significant new business.

He says one of the biggest hurdles NZP faces is regulatory requirements – both in New Zealand and in export countries.

“Animal extracts form the bulk of our product portfolio and these carry with them the need for rigorous traceability and documentation,” explains Mr Callagher. Markets such as Europe have differing and complex regulations for each country, and sometimes even each state.
 
“Sometimes it feels like these are non-tariff barriers. And whether they are or not, they provide some of our toughest street fights.

“The tyranny of distance is also a real challenge. We are often faced with questions regarding delivery and lead times and in Europe in particular six weeks sea freight is a tough thing to sell. Air freight is expensive but to service the customer we have to factor in such things.”

NZP's commitment to meeting all of its customers’ needs and the quality of its products helps overcome these barriers, and it has established many long term business relationships. Its New Zealand origin - the country’s clean green reputation and disease-free animal status - are an advantage in the international arena.

Today NZP exports 99 percent of its products, and has more than 150 customers in 30 countries across the globe, including eight of the world’s 12 largest pharmaceutical companies. A rapidly growing, medium-sized New Zealand firm, Market Development Manager Selwyn Yorke says the foundations are now in place for NZP to achieve annual export sales of $100 million within the next 10 years.

The firm has been through several ownership changes during its 36 years history and today is owned by private equity firm Director Capital and NZP management and staff.

“Compared to the corporate days, having the staff/managers as owners is a much more motivating environment,” says Mr Yorke. “We all feel that we are part of the developments and the speciality products facility is a great example of that.
 
“Our developments and successes over the past few years have really established NZP and New Zealand as a real player in the biotech world.”
 
Contact: Mike Callagher, Commercial Manager, NZP, phone 06 952 3800, ex 840, email mike.callagher@nzp.co.nz, www.nzp.co.nz