Earth First Food Ventures Ltd (EFFV) has formed PFerrinX26, a 50:50 joint venture with North Carolina-based DeNovo Foodlabs to scale the production of bovine lactoferrin via precision fermentation.
A manufacturing partner will be announced shortly, says EFFV, which is putting together a consortium of players to build and finance facilities capable of producing 300 tons of bovine lactoferrin per year within the next decade.
DeNovo—an animal-free dairy specialist with R&D operations in South Africa and business and commercial operations in the US—has developed yeast strains capable of producing high titers of lactoferrin, and has been looking for partners to scale its tech, said CEO Jean Louwrens.
“Our titers are in a good space, and as a startup, we want to focus on having the most efficient strain out there and then partner with people that can take on the manufacturing and business development. This will accelerate the shift from limited dairy-derived supply to scalable, sustainable production, enabling us to meet global demand and unlock new applications for this exceptional protein.”
EFFV CEO Brian Ruszczyk added: “As precision fermentation reshapes the lactoferrin landscape, our combined strength – alongside top-tier tech collaborators, industrial partners, and leading incumbents – positions PFerrinX26 to become the world’s premier PF lactoferrin supplier.
“The unit economics today make for very attractive gross margins.”
Favorable unit economics
An iron-binding anti-microbial protein found in mammalian milk, lactoferrin has benefits for humans around immunity, iron regulation, digestive health, endurance, and muscle strength, but has historically only been available in small quantities owing to the costs and challenges of isolating it from cow’s milk (thousands of liters are required to make a single kilo).
As a result, prices can top $650/kilo, making lactoferrin an attractive candidate for firms in the precision fermentation space such as Vivici, All G, TurtleTree, and Helaina (human lactoferrin), who are seeking to unlock new markets for lactoferrin beyond infant nutrution in adult nutrition and performance nutrition.
Unlike the firms above, EFFV plans to develop in-house facilities rather than rely on co-manufacturing agreements, allowing for greater control over production quality and cost efficiency, said Ruszczyk.
According to Louwrens at DeNovo: “We currently operate at pilot scale with 30-liter to 100-liter bioreactors, and now our focus is on getting into a 500-L reactor so we can start doing our GRAS [Generally Recognized as Safe] regulatory submissions [to access the US market]. And then 1,500-liters is what you need to get to before you can go into the much larger scale, so that’s what we’re doing in the next few months, probably up until the end of this year.”
DeNovo cofounder and COO Richard Grieves added: “One of the great things about lactoferrin is that the unit economics look good at reasonable scales… they look good at 100,000-liters.”
According to Ruszczyk, the manufacturing capacity that EFFV and DeNovo plan to tap into is “already built, it just needs a bit of retrofitting, and it’s with a major global player.”
He added: “We’re working with one of the world’s largest foundations, we’re working with one of the world’s largest precision fermentation groups, and we’re working with close on six to seven offtakers across the spectrum, from infant formula to sports nutrition to adult nutrition.”
The addressable market
As for the size of the lactoferrin market, “everybody has different numbers because it’s a very opaque industry,” he said. “But there are approximately 850 tons of lactoferrin produced annually in 42 facilities around the globe that range from 25 tons to 75 tons.
“The biggest global producer out of Asia produces 170 tons per annum. And we believe the market can easily triple, if not quintuple, over the next decades. It costs dairy companies $300 a kilo to produce lactoferrin from milk. And under our trajectory, we’re going to be sub that price in the not too distant future, so it’s going to make us very competitive but will also allow the industry to expand as we and other [precision fermentation players] introduce a new source of supply.”
That said, the price “has to come down,” he said. “If we add 300 tons to the current market, how will that impact the market price? Does it stay at $650/kilo? We don’t think so. It will probably be in the $350-400 range, which will really open up the market.”
As for clinical data around lactoferrin, he said, “There is already a significant body of literature out there but we’re working with one of the biggest foundations that’s been working on lactoferrin for years, together with our incumbent lactoferrin group, all in the future, to be announced, and they will most likely be performing clinical trials because they would like to make certain claims.”
Continuous fermentation?
Asked in a recent interview how much it would cost to build a commercial-scale lactoferrin facility, cofounder and CFO Ricardo Radwanski told AgFunderNews: “Compared to [a facility to produce large amounts of] BLG [beta lactoglobulin whey protein], it’s a much more reasonable number. And then when you look at new technologies such as continuous fermentation, you really have a potential to bring down the COGS [cost of goods sold] and increase productivity.”
There are several market segments to target with lactoferrin, he said. “We’ll start with cosmetics and adult nutrition and then further down the road we’ll look at the infant formula market [which has a longer and more complex regulatory pathway].”
With an initial focus on land-based recirculating aquaculture systems, EFFV is “used to large scale, industrial scale ups with novel technologies, with over $850 million raised to scale globally,” said Radwanski.
The demand is there
While EFFV is looking at other dairy proteins such as beta lactoglobulin (the most prevalent whey protein) down the road, it is initially focused on lactoferrin given its high market value and relatively low inclusion rates in key applications, said Radwanski.
“What we are looking at right now is what makes the most sense from a unit economics perspective. We also know that the demand is there. Were there more available, the market would grow.”
While a growing number of startups is looking at this market, he said, there is room for “several players.”
