During the first few months of 2015 Agrivida, a biotech company producing multi-purpose enzymes decided to focus its attention on the animal nutrition sector. The company’s biomolecular technology platform uses the corn plant as a factory to produce the enzymes. It was originally targeting the biofuel and industrial sectors, but pivoted to animal health in the wake of falling oil prices.
After raising the first $12 million of a $23 million Series D round, Agrivida honed in on its animal nutrition business with guidance from its investor base.
The animal nutrition business is developing three products: GraINzyme, a corn phytase or glucanase feed additive for monogastric and ruminant animals (chickens and cows); INzyme, a silage-based grain replacement for feed for ruminant animals; and INergy, a plant line with higher energy content for ruminant animals.
The Series D round completed in August 2015 and the company brought on a bevy of high-profile investors: Cultivian Sandbox Ventures, which led the Series D, ARCH Venture Partners, Maschhoff Family Foods, and Middleland Capital. These investors joined the existing investor line-up of Bright Capital, DAG Ventures, Gentry Venture, Partners, Kleiner Perkins Caufield & Byers, Northgate Capital and Prairie Gold.
Here, seven months on, Dan Meagher, CEO of the company, gives AgFunderNews an update on the company’s progress.
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The Series D round really helped to put us on the path we’re on today. We needed to confirm our strategy for the animal nutrition business, and reorganize the company to manage this. It also helped us to secure enough runway to get us out towards the end of this year when we anticipate being in revenue for the first time.
Fast forward to today and when I look at the milestones we set one and a half years ago, I am pleased where we are. As we speak, we’ve got hybrid corn in the ground in South America. It will produce commercial seed that will come back to the US in the spring and we will plant an estimated 700-800 acres of corn across the central US with signed grower contracts in place. We have completed regulatory trials and we are on schedule to have required work in front of FDA/CVM for regulatory approval as a feed additive to support selling products in Q4 of this year. We have completed regulatory trials and we now have a dossier in front of the scientific expert panel, which we expect to be signed off quickly before we move in front of the FDA to be approved as a feed additive. This will allow us to start selling our products in Q4 of this year.
We’ve had great results from the product on feed conversion, body weight and meat quality, presenting an ROI to our customers. It’s a very unique platform using the corn plant as the factory, which offers a more cost effective production system, and “an ROI to the potential customer.”
We think this represents a paradigm shift in animal nutrition as we will be dosing animals at much higher levels than the industry does today. We are deep in discussion with potential commercial partners, but we’re not in a major hurry necessarily to do a deal immediately; we need the right partner, but we have alternative strategies to get to market if we don’t find the right deal.
Moving into our first revenues in 2016, we expect 2017 to be our first full year of revenue. If we don’t do a commercial partnership, we will need to go back to investors to extend our runway and buy ourselves more time. We’re getting close to the execution of the first phytase product, and we have other opportunities to focus our attention on for the next opportunity. We have had a strategic discussion with our investors about doing an add-on round to fuel this growth and expansion; it all depends on whether we do a commercial deal or not, but I think it’s highly likely we will do an add-on raise to fuel our go-to-market strategy.
When we completed the last round we brought in Cultivian, ARCH Ventures, Middleland, and Maschoffs, so we really have a great stable of investors that understand the technology and the space. Having Maschoffs, who is a targeted customer, is fantastic to give us that insight and perspective into the value proposition of our products, and to show us how to approach that.
We’ve also built a very strong organization and brought in a new head of regulatory who has enzymes, regulated acres, and stewardship experience so understands what we’re doing. We also have a nutrition expert and a head of supply chain, so we’re in good shape!
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