New Zealand Pharmaceuticals

New Zealand Pharmaceuticals Ltd (NZP) is leading the way for biotechnology industry development in New Zealand, manufacturing and exporting specialty biochemical and natural extracts to some of the world’s biggest pharmaceutical and biotechnology companies.

This Palmerston North business was formed in 1971 to extract and purify biochemicals from by-products of New Zealand’s meat processing industry. Commercial Manager Mike Callagher says its original products were pharmaceutical intermediates such as cholic acid, many of these being extracted from bile. To this day cholic acid, used in products to treat liver complaints, remains its core export product, accounting for about half its sales. And although there is significant sales growth in other areas, Mr Callagher says the demand for this bile extract also continues to grow.

NZP also manufactures a number of direct pharmaceutical ingredients, including digestive aids, antiviral agents, and drug delivery agents, as well as a range of biochemicals and natural extracts for the international health food, cosmetic, biotechnology and aquaculture industries.

NZP exports almost all its products and has more than 150 customers in 30 countries across the globe; its clients currently include eight of the 12 largest pharmaceutical companies. Mr Callagher says NZP has a longstanding reputation as a reliable producer of high quality products, and this is further strengthened by the international recognition of New Zealand's 'clean green' and 'disease free' status.

During its 35-year history NZP has gone through a number of ownership changes. Today it is owned by private equity firm Direct Capital and NZP management and staff. Managing Director Dr Richard Garland says NZP is ranked in the New Zealand top 500 list of companies and had a market value of $100 million when Direct Capital bought into the business last year. He describes it as a medium sized exporter with “sharply growing” sales, which have doubled within the last three years.

Over the years NZP has strategically focused on broadening its product portfolio, and in the 1990s, in response to public awareness of BSE and other animal related diseases, refocused on product development of plant extracts. NZP launched several successful unique product lines, including a range of blackcurrant extracts under the brand “Just the Berries”, which it is successfully marketing into the Japanese functional foods market.

More recently, in partnership with Crown Research Institute Industrial Research Ltd, NZP has begun to concentrate on the burgeoning niche of synthetic biopharmaceuticals.

“Specifically, the successful commercialisation of novel synthetic carbohydrate technology developed by IRL has allowed us to establish niche products which have found applications in cancer treatment and heart disease. This has been a huge growth area for us,” says Andy Lewis, NZP’s General Manager.

He describes the relationship with IRL as “near business critical”, giving NZP access to a much larger pool of world class scientists, novel intellectual property and technology.

“It’s a real life example of ‘NZ Inc’ at its best, highlighting the opportunity that regional strategic partnering provides for SMEs in New Zealand that are looking to gain sustainable growth in the global marketplace.”

The successful development of the synthetic carbohydrates market has itself provided the commercial basis of NZP’s new $10 million manufacturing facility.

Mike Callagher says the new plant gives NZP the platform to take the business to the next level of growth, providing significantly enhanced operational capability and advanced compliance levels. Good Manufacturing Practice is the key quality standard for NZP and is an essential element in the acceptance of its products in pharmaceutical and biotechnology markets.

He says by focusing on high value specialised niche products to service its customers’ needs, NZP will be able to compete with low-cost manufacturers like China and India.

“It’s a key differentiator we have as a business and New Zealand has as a country. We don’t often need huge economies of scale that other international businesses believe are necessary. We can accept what may look like small scale business, but which we can often develop. One of our competitive advantages with new products is ‘speed to market’. We are flexible and responsive.”

Key export markets for NZP are Japan, the USA and Europe. More recently, NZP has recognised new opportunities that exist in India, and is currently exploring this market.

Mr Callagher says a dedicated team of NZP staff manage client relationships, visiting top customers regularly. It also uses agents globally.

Andy Lewis adds that one of the major challenges for New Zealand exporters operating in the pharmaceutical/biochemical ingredients industry is moving products to markets, and he cautions companies not to underestimate how much focus and time is required to navigate the regulatory minefield.

But he says the rewards are there and New Zealand biotechnology companies shouldn’t be afraid to compete on the world stage.

“NZP is a medium sized New Zealand exporter and we are not frightened by the scale of our competitors or our clients. We can foot it with anybody.”

Image: A New Zealand Pharmaceuticals staff member at work in the Palmerston North factory.

Contact:
Mike Callagher
Commercial Manager
New Zealand Pharmaceuticals
Phone:    +64 6 952 3800 ext 840
Email:      mike.callagher@nzp.co.nz
Website:  www.nzp.co.nz