Andreas Bais, BASF’s head of global marketing communication in human nutrition, told us the Pronova buy, if approved by regulators, will cement the company’s omega-3 presence from food to pharma grades, while boosting output capacity in the hot sector.
“A successful acquisition of Pronova will complement the recent acquisition of Equateq [now BASF Pharma Callanish] and will offer significant expansion opportunities for our existing dietary supplements business,” Bais said.
“The technologies from Equateq, Cognis and Pronova each are different and complementary. Synergies will also be created between the BASF business units: 'Pharma Ingredients and Services' and 'Human Nutrition'.”
“A successful Pronova acquisition will enable both units to optimally combine their raw material purchasing, even at intermediate steps along the value chain. The company offer the entire range from low to medium to super high concentrated omega-3 fatty acids.”
Pharma dynamics
Commentators have focused on the move’s pharma potential, as Pronova supplies the likes of GlaxoSmithKline, the maker of US Food and Drug Administration (FDA)-approved blockbuster omega-3 heart health drug, Omacor/Lovaza.
Omacor/Lovaza patents are set to expire in various parts of the world in 2013, potentially bringing generic drug makers to the sector, but a similar patent’s European expiration in 2009 did not provoke an avalanche of generic copycats.
There are others like Amarin that have recently secured initial patents, in its case for a cholesterol-lowering drug called Vascepa (isosapent ethyl), set for market in 2013.
BASF, along with Nisshin Pharma, Catalent, Chemfor and Banner Pharmacaps are suppliers to Amarin for that drug.
Pronova’s supplements potential
In 2011, Pronova announced its intention to better tap the food supplements sector amid a €500m investment in its Norwegian and Danish facilities that meant it could churn out 2500 tonnes per year of pharma-grade omega-3.
Typically that means EPA (eicosapentaenoic acid) and DHA (docosahexaenoic acid) dosage of 60-75% of a 1g pill, meaning 600-750mg per pill.
At the time, CEO Mortern Jurs told us, “there is 900 tonnes excess we can devote to supplements if we want to.”
Pronova set aside more than €7m for the supplements project with Murs stating: “Having established a dominant position in the omega-3 pharmaceutical market, we are well positioned to leverage our existing infrastructure, knowledge, research, regulatory and partnership capabilities in order to drive a highly successful consumer business targeting a different segment of the population.”
After the US, the biggest markets for Omacor/Lovaza are Italy, the UK, France, Greece, Spain, Germany, and South Korea.
BASF gained food-grade, fish-sourced omega-3 when it acquired fellow German ingredients supplier, Cognis, for about €3bn in 2010.
It paid an undisclosed sum for Equateq in May this year, which gave it high-end omega-3 potential plus access to novel chromatographic separation technologies.
Market researcher Packaged Facts estimates the global omega-3 market to reach €26bn in 2016.