Abattis Biologix... The next $100M Neutraceutical Company

Bringing you undervalued, high growth opportunities... Abattis Biologix Corporation … The Next $100M Neutraceutical Company CNSX: FLU Share Price: $0.055 Shares Outstanding: 51.7M Fully Diluted: 68.2M Market Cap: $2.5M Bio-Med and Bio-Tech Stocks are Back in Vogue The Bio-Med/Tech sector has been a long suffering sector since the dot com crash. Over the last decade this theme has languished while commodities have taken over as the dominant growth theme. Bio-Med/Tech’s had entrenched themselves in the 1990’s as the pre-eminent growth story along with tech and after 10 years of consolidation as a sector, the growth story is back on. Recently the investment environment has turned extremely favorable with $100M to $1B buyouts in the sector with the flavor being spiced heavily towards the fast growing natural health product industry. An aging demographic of baby boomers who are now well into their 60’s are flocking to natural health medicine to keep them looking and feeling healthier in hopes of enjoying the highest quality of life in their retirement. The Bio-Med/Tech theme started to hear rumblings when Obamacare was announced which may or may not be having an effect on the rebirth in this sector. One thing for certain is that North America is an aging population with a generation of baby boomers trying to stave off death, stay young as possible and enjoy the best quality of life one can attain in your golden years. Health issues that remain at the forefront of this industry with very large markets are the anti-viral, anti-inflammatory, cardiovascular and joint health categories. All aspects of this industry will benefit immensely as society deals with the needs of an aging population, but there is an immense opportunity providing relief and prevention medicine in the growing $25B Natural Health industry. The penny sector has come to life with a company I wrote about last year, biOasis Technologies BTI-V tripling in value over the last 2 months from $0.50 to over $1.80. (BTI is UBC research & development company with a focus on breaking the Blood Brain Barrier by piggybacking previously ineffective drugs with Transcend). The recent action on the share price of BTI is showing signs that this sector is heating up, especially for a company with a niche market story. The renewed fervor for Bio-Med and Bio-Tech stocks and the strong outlook in the sector has created an investing environment for start-up companies to come to life and thrive. One such company that has quietly gone about its business putting together the necessary pieces of the puzzle creating a strong Bio-Tech start-up with the right mix of management, product and marketing strategy is Abattis Biologix FLU:CNSX. An Ounce of Prevention is Worth a Pound of Cure A growing trend in this industry is for individuals to focus on prevention and natural health as a major part of one’s health regime instead of relying on pharmaceuticals to fix things when you run into health problems. Traditional pharmaceuticals focus on a cure based approach and do not address the quality of life issue. Natural (neutraceutical) medicine on the other hand can focus on the same type of cure based approach as well as be very effective as prevention medicine. As our society becomes increasingly more educated about health issues and how to stay healthy for as long as possible, people are turning to natural health products such as krill oil, berry extracts and other plant and animal based derivatives to get vital ingredients that have been proven to optimize a person’s health. Have you ever heard the saying ‘an ounce of prevention is a worth a pound of cure?’ Learning about healthy living and available health products that improve your life can significantly improve the quality of life over the duration that an individual lives. An added benefit of using natural health products as part of a lifestyle is that over the next generation, a change in societal attitudes about health and staying healthy could have a drastic reduction on long term health care costs. ‘Going Natural’ can also eliminate many serious side effects and complications with pharmaceuticals which will further eliminate costs. Natural health solutions have a major advantage to products offered by major drug companies. They have the advantage of being cost effective when compared to costly patented pharmaceuticals. A trend towards natural health care will eventually decrease burdens on the health system over the longer term. The neutraceutical market is a growing industry with products that are just as competitive as pharmaceuticals and have the added advantage of keeping you healthy. Growing trend to natural health products and preventative medicine. Neutraceutical are often a less costly alternative to expensive pharmaceuticals Prescription costs to continue to rise while neutraceuticals price point remains constant Trend to neutraceuticals to avoid harmful side effects of prescriptions Natural products are increasingly more effective vs. pharma counterparts with more advanced extraction technology available to the industry. ‘Prevention’ is always cheaper than ‘treatment’ This high growth sector offers lofty premiums for companies with niche products such as ColdFx, Neptune Krill Oil and other animal and plant based derivatives. Evidence the neutraceutical market is heating up… Two highly visible takeovers in the last year Industry darling Valeant NYSE:VRX formerly known as Biovail recently bought out Afexa for approximately $100M whose sole product is ColdFx, a widely marketed natural cold product with sales of $40M in the most recent year. Royal DSM a Netherlands based bioscience’s company agreed to by Martek BioSciences for $1.09B in December of 2010. Martek was a world leader in producing DHA from algae. DHA – An Essential SuperOmega Companies are after the SuperOmega, DHA. It is the key ingredient in Neptune Technologies and Bioresources TSX:NTB NKO. NKO is a product refined from Antarctic Krill Oil. NTB is a natural health biotech worth $125M with annual revenues of less than $20M. At its highest valuation Neptune was worth $250M last spring. The neutraceutical sector offers lofty valuations for companies that develop niche products for the market such as Neptune Krill Oil (NKO), ColdFx or in Abattis Biologix case, DefenZall and their DHA infused Krill Oil platform. Abattis Biologix… …The best $3M opportunity anywhere in the biotech sector At a pint sized $3M market cap, this little biotech start-up has a platform of products that will be the envy of any neutraceutical company. Abattis has products that will compete directly with both Afexa and Neptune. If successfully marketed, just these two products alone have the potential toproduce stellar combination of revenue streams to Abattis. Afexa had sales of $40M from ColdFx in 2010/11 and was recently bought out by Valeant for approximately $100M. Neptune is a krill oil company that has annual revenues of less than $20M and worth $125M market cap. If you add the two potential revenue streams together of $40M and $20M with a combined $250M market cap, those are dizzying heights for a tiny start-up worth $3M. Abattis has the product line and industry expertise to compete with Afexa and Neptune’s products. Abattis should command a valuation well past the current $0.06 share price as they rollout the product lines in 2012 from several platforms. Abattis isn’t going to turn into a $100M market cap company overnight , but they are targeting products in an industry that have potential to earn yearly revenues in excess of $50M from the two closest competitors of Abattis. A Solid Foundation to Build From There is no start-up in the Biotech industry that has positioned itself for the explosive growth potential that FLU represents. Abattis Biologix FLU has quietly gone about its business in 2011 putting together key pieces in creating an emerging natural health products company capable of multimillion dollars in sales. Abattis products plan to be at the forefront of several different health categories including anti-viral, anti-inflammatory, cardio-vascular and joint health. The company has a key (patent pending) product in their DefenZall Cold and Flu lineup and in producing their own DHA infused oils from krill. Abattis acquired companies in late 2011 that give them key licences and facilities to produce a large lineup of natural health products outsourcing and producing patented materials in Asia and assembling the products in Canada under the label Made in Canada. This gives Abattis the ability to be a low cost producer in the industry with an identical manufacturing structure as neutraceutical giants Jamieson and Natural Factors. Recent moves by the company to acquire Northern Vine and Sci-Natural Wellness Corp provide Abattis with a product platform licenced by Health Canada with licences to produce up to 200 products. The production facilities allow Abattis to expedite production of DefenZall and their krill oil products. This instantly makes Abattis a strategically integrated specialty biotechnology nutritional company with products licenced by Health Canada. It also speeds up Abattis production timelines by 18 – 24 months with the acquisition of the facilities approved by Health Canada. With production facilities in Langley, BC and the ability to produce products at a low cost advantage by outsourcing key ingredients offshore, Abattis has positioned itself with the recent acquisitions to hit the ground running. The company has identified marketing and distribution channels in the US and Canada and built a management team that has history managing successful biotechnology companies. Dr. Tim Fealey heads up product development with his 30 years of experience serving as worldwide VP R&D with Proctor and Gamble and The Coca Cola Company. With Tim on the board of directors and his extensive industry connections and technical expertise, it allows Abattis to access DHA, Astaxanthin and other innovative proprietary ingredients from sustainable sources. Without Tim, Abattis’s plans to produce a low cost/high quality Krill Oil product competitive to Neptune Krill Oil would not be possible. Tim served as Martek Biosciences Chief Innovation Officer. Martek BioSciences recently sold to DSM for $1B. Martek is the world leader in producing DHA from Algae. Dr. Tim Fealey wasn’t ready to retire and he wants to build another $1B business at Abattis Biologix. A Focused Strategy Targeting Market Need The key acquisitions above position the company for rapid growth in manufacturing and sales of natural health products targeting key health segments such as… Anti-viral - Product launch of DefenZall targeting Cold and Flu. Spending on Flu products was $7B 2009 and $10B in 2010 representing a huge market for an effective product. Tamiflu sales average $880 million per year. Anti-inflammatory – Abattis Krill Oil (AKO) and Red Algae (DHA and Astaxanthin) product platforms target this $60 billion market specifically with DHA infused and Astaxanthin products. With an aging population this is a segment that is expected to continue to see extensive growth. Cardio Vascular – Heart and Cardio Vascular diseases cost the economy almost a trillion dollars a year in direct and indirect economic costs. The figure was estimated at $863B in 2010. AKO is excellent for the cardio vascular health. Abattis plans to produce Nitric Oxide tablets for those with circulatory problems. The Nitric Oxide discovery and its relation with the circulatory system won the Noble Prize in 1998. Joint Relief - Abattis will also produce glucosamine, chondroitin and MSM which is another natural health product that is popular for anti-inflammation. Cognitive Decline and Migraine Headaches – Abattis has a natural health product that is very effective against migraines and other cognitive issues. Key Product Platforms DefenZall Cold & FLU DefenZall FLU (patent pending)is Abattis flagship anti-viral product that could drive revenues at Abattis ‘viral’. DefenZall provides strong anti-viral protection against both colds and influenza. Here is how DefenZall fights virus… Prevents viral progression by… Preventing viral replication Preventing further cellular infection by protecting uninfected healthy cells This 2 pronged attack of inhibiting the virus to replicate and protecting healthy cells allows the body to concentrate defenses on existing infected cells and ultimately shortens recovery time. Tamiflu, the world’s #1 selling drug nets $880M in revenue a year and up to $2.5B annually during pandemics. People spent $7B on FLU in 2009 with that number jumping 40% in 2010 to $10B. This indicates that the FLU market is going parabolic and ‘viral’ in spending with huge year over year growth in this specific segment. Tamiflu is a product made from a plant called Chinese Star Anise. Tamiflu offers only one strain of antiviral protection coming from one specific plant, it is a powerful strain, but there is evidence that strains like H1N1 have become resistant to Tamiflu. DefenZall is a blend of several natural anti-viral products making it much more complex for the virus to figure out. Studies have shown when you supplement Tamiflu with DefenZall; Tamiflu becomes much more effective, significantly decreasing symptoms and duration of ill-health. DefenZall is a New and Improved ColdFx… With bonafide FLU protection that ColdFx doesn’t have!!! DefenZall Daily is an improved competitive product to ColdFX. Abattis has an additional product that Afexa did not have when it was taken over for close to $100 million. This is the DefenZall Flu Protection. The product has the identical active ingredients as Afexa’s ColdFx and has the added protection of the Elderberry which is famous for providing protection and relief against several strains of influenza including SARS and H1N1. If you had the choice of buying a product that was identical to ColdFx, but had the added protection against the several strains of influenza, which product are you going to buy? Seems like a no brainer to me. Sales of ColdFx went from ~$1M in 2003 to $30M two year later in 2005 and peaked at $50M in 2008 before leveling off at around $40M per year. If Abattis can match the performance of ColdFx, the valuation of Abattis will rapidly increase. DefenZall is a product that instantly makes Abattis a very important up and coming player in the natural health sector. The health industry is always looking for and trying the next best thing. Just like ColdFx, sales of DefenZall could go from zero to $50M in less than 5 years. If people start buying DefenZall for FLU protection, it could open up a market even bigger than the one ColdFx currently supplies. DefenZall is a product that could quickly initiate a $100M takeover valuing FLU at $1.50 to $2 per share. The #1 marketing strategy in the world… producing improved versions of tried and tested products. 1. Produce an improved product that is identical to a current market 2. Place the product beside the old version 3. Watch the improved DefenZall cannibalize ColdFx sales. Abattis is following a no brainer sales strategy angling DefenZall Daily and DefenZall FLU Protection to be a repeat new and improved ColdFx story. Do you want just Cold protection? Or do you want Cold and Flu protection in the same pill? DefenZall is a capsule recommended 3 times a day just like ColdFx and is recommended to be taken a as daily supplement. DefenZall is Cold and FLU that Protection Works! Medicinal Ingredients in DefenZall Daily: Each 3 capsules contain: Beta Glucan 200 mg Astaxanthin 300 mg Hemp Protein 525 mg Spirulina 300 mg Kelp (Fucus Vesiculosus) 300 mg Zinc 30 mg Vitamin B12 9.9 mcg Abattis Krill Oil (AKO) Krill Oil, the Super Fish Oil contains the Super Omegas DHA andEPA. These two Super Omegas are two of the most powerful nutritional supplements known to man that exist in nature. Krill oil can be shown to be extremely effective against several life threatening and quality of life diseases. It can be even more effective where one’s diet is not rich in seafood. This is typical of the North American diet. Krill Oil Can… Reduce your risk of a cardiovascular event by up to 45% Vanquish artery-clogging LDL by up to 55% Reduce harmful triglycerides by up to 27% Slash heart-damaging inflammation up to 29% Raise HDL up to 44% Soothe joint pain up to 29% Boost your memory as much as 48% Reduce facial wrinkles as much as 51% Increase your energy by over 50% Decrease symptoms of PMS as much as 47% Super Omegas DHA and EPA are so effective in Krill Oil that it is 54 times more powerful than ordinary fish oil. Abattis management has the technical expertise through proprietary processes to source both DHA and Astaxanthin from algae. Algae is the source of nutrition for all life in the sea. The krill eat the algae, the fish eat the krill, the bigger fish eat the smaller fish, and marine mammals and dolphins and whales eat the bigger fish. The components in Algae are a source of nutrients for all marine life. Krill Oil is made of 5 vital components (Everest Nutrition’s Krill Oil) Omega-3 300mg EPA 165mg DHA 95mg Phospholipids 500mg Astaxanthin 1.6mg Krill Oil is marketed by many as the lifeblood of the sea and is the superior fish oil on the market. Krill is the base of the food chain in the ocean and eventually becomes food for everything in the sea. As you go up the system, vital nutrients like DHA and Astaxanthin that originate in the algae are removed from the system. Having the ability to produce and reintroduce these two vital nutrients into the food chain in all lines fish oils will give Abattis a superior advantage in producing quality and effective products in the industry that people want. Abattis plans to utilize Dr. Fealey’s expertise to produce a low cost/high quality krill oil product competitive to Neptune Krill Oil (NKO). Dr. Fealey, former Chief Innovation Officer of Martek, the world’s leading biotech company producing DHA from algae can produce a patented line DHA infused products. Astaxanthin and DHA are the lowest values in krill oil. Having the ability to increase these values to desired levels and infuse both DHA and Astaxanthin into low-cost krill oil could turbocharge Abattis Krill Oil (AKO) with levels that no other krill oil producer can compete against. The company also plans to produce Salmon and other fish oils, but (AKO) infused with DHA and other derivatives such as Astaxanthin sourced from algae will be the primary marketed product. The product will be competitive with Neptune’s NKO (Neptune Krill Oil) at much lower price point as well as having the capacity to expand the lineup into several different fish oil products. Astaxanthin… Another Super Nutrient Astaxanthin is another niche product that Abattis has direct manufacture relations with in addition to the DHA expertise that Dr. Tim Fealey provides. Astaxanthin crosses the blood brain barrier BBB and is another super nutrient that has been professed by many people including professional ironman triathlete Tim Marr. Marr is not the only one who has found its secret as many triathletes have found it extremely effective among triathletes of all ages who use the supplement for its anti-inflammatory properties and to fight sun damage. Astaxanthin is also a powerful antioxidant in the fight against cancer causing ‘Free Radicals.’ Astaxanthin has a pretty a heavyweight imagine in Naturopathy… Powerful Anti-Inflammatory - $60 Billion market King of the Carotenoids The World’s Strongest Antioxidant Decrease in joint soreness – overuse injuries The Athletes Secret Weapon!!! o Increased Stamina o Makes you stronger o Recover Faster o Prevent joint and muscle soreness Those first three are what steroids offer…and you can get all that from one powerful little nutrient that originates in algae called Astaxanthin. Astaxanthin can be marketed with krill oil or on its own as. The anti-Inflammatory segment in health is a huge market worth close to $60B dollars. Inflammation is a constant problem for elite triathletes who train 6 – 8 hours a day running, cycling and swimming. The fact that elite triathletes seek out Astaxanthin as a nutrient to battle inflammation from constant overuse is testimony that this powerful little nutrient, the base for all food we know provides relief for the most strenuous cases that the human body can provide, the endurance athlete. Health benefits from Krill Oil and the Super Omega 3’s DHA and EPA include… Cardio vascular disease Asthma Cancer Anti-inflammatory ADHD Improved immune function Depression Joint Health Saskatoon Berry Abattis other neutraceutical strategy is to develop a line of berry extracts including a little known superberry similar to the Brazilian Acai berry, the Saskatoon Berry. The Saskatoon berry is a high antioxidant berry that is often compared with Acai for its potency. Abattis believes they can market the Saskatoon Berry as a standalone power juice product platform and as a line of extracts. The Saskatoon berry has comparable levels of Polyphenols to acai and antioxidant levels comparable to blueberry. If Brazil can market, produce and export a superberry such as Acai, the same is true for Canada’s undiscovered superberry, the Saskatoon berry. Clinical studies indicate the phyto-ingredients in Saskatoon Berries fight against… Cancer Heart Disease Diabetes Oxidative Stress Cholesterol Diverticulosis Inflammation Cognitive Impairment Nitric Oxide Nobel Prize Discovery in 1998 The Nitric Oxide (NO) discovery and how it affects the circulatory system is one of the greatest discoveries in heart medicine since the triple bypass. The American Heart Association says “the discovery of nitric oxide and its function is one of the most important in the history of cardiovascular medicine. “ Nitric oxide helps regulate the Endothelial System which plays a vital role in cardio vascular health. Scientists identified Endothelial System Dysfunction as a major contributor to all cardio vascular diseases making NO a very important contributor to cardio vascular health. Whenever the system has insufficient levels of Nitric Oxide, the endothelial system starts to deteriorate. Dysfunction occurs and eventual cardiovascular disease persists. Scientists have identified 40–50 years of age in humans when the body starts to produce insufficient levels of nitric oxide to maintain and regulate the endothelial system. Abattis through Dr. Samuel Brant has developed a proprietary blend if nitric oxide sourced from beets, artichoke and other high nitrogen products to produce a high quality nitric oxide blend that is second to none. Abattis target market is the massive cardio vascular health segment that costs the world’s economy almost a trillion dollars in direct and indirect health costs. A secondary market that Abattis will be targeting is the workout supplement market. Nitric oxide has found to be very beneficial for athletes if they take it before a workout. It increases strength, stamina and speed in the body by increasing NO levels in the body. Currently the most effective natural workout supplements for sale are specifically derived nitric oxide blends. Products like NO Explode have taken the workout industry by storm. Boosting nitric oxide levels in the body before a workout allow a person body to be able work faster, harder and longer. Nitric Oxide is certainly a much more effective energy booster for workouts than popular red bull and 4 hour energy drinks. Regular users of nitric oxide describe the energy effectiveness of Nitric Oxide the same as consuming 10 cups of coffee. In a 40 clinical day study NEO40 was shown to… Increased Plasma nitrates and nitrates in the body Significantly reduced triglycerides Modest reduction in blood pressure Key Management When it comes to investing in Biotech and Biomed stocks, there is no industry at start-up stage that is more dependent on management. Management can make or break any public company, but it is even more so crucial in this industry as you are depending on management’s ability to bring innovative, effective and competitive products to market. Dr. Tim Fealey (Global Product Development Advisor) – Dr. Fealey has extensive technical expertise to process and source low cost Krill Oil, DHA and Astaxanthin and experience as Chief Innovation Officer at DHA leader Martek Biosciences make him an invaluable asset to the Abattis team. Executive at Procter and Gamble and Coca Cola give Tim access to extensive industry contracts, networks and preferential treatment among contacts. Mike Withrow (President & CEO) – Mike has extensive experience in the neutraceutical sector founding both BioExtracts and Biocell Labs. Mike has key understanding marketing products in the natural health industry. He is adept at managing a fully integrated biotech company from product innovation and intellectual property to manufacturing and marketing of the Abattis product lines. Dr. Samuel Brant LLC (Chief Science & Medical Advisor) – Dr. Samuel Brant is the face of Abattis to the public. Dr. Brant is a gifted educator who enjoys teaching the principles of healthy living. As part of a marketing strategy Dr. Brant will be hosting a radio show that will promote the benefits of healthy living which will be an avenue to market Abattis extensive line of natural health products. Dr. Phil Hardy – Dr. Hardy is Abattis hands on in the lab science guy. Dr. Hardy is co-founder of North American BioExtracts and Pine River Petrochemicals and has been a biotechnology contractor for years.Dr. Hardy was integral in the development of FDA approved Medical Food for Alzheimer’s disease. He also helps the company grow Astaxanthin under a NRC grant. Abattis Biologix… The next $100M Biotech company When your product has… Active ingredients of ColdFx Plus ingredients from the Elderberry made famous as a natural flu remedy With studies showing increased effectiveness of Tamiflu with DefenZall. You have a product that will quickly eat into ColdFx sales. When you have the ability to… Source inexpensive Krill Oil, DHA, Astaxanthin and other innovative proprietary ingredients from sustainable sources Have one of the world’s leading DHA experts at your disposal from Martek who was the company’s Chief innovation Officer. Plans of making major inroads into the lucrative Krill Oil industry are quite realistic. When management has a proven track record… Marketing and bringing products to market. Managing intellectual property and being at the forefront of innovation. Extensive industry contacts with a vast network of established distributors to work with to execute on the marketing plan. Future revenue streams seem but a formality. Abattis Biologix is a $3M market cap biotechnology start-up that is positioned to walk among giants. They have two product platforms that compete against $100M companies in Afexa and Neptune. They have the right management with experience in corporate innovation and strategy, scientific innovation and marketing expertise to the consumer. They have numerous intellectual property and patented process that give the company real IP value. They have made recent acquisitions to start production and marketing of their most valuable product lines. With Abattis on the verge of rolling out several products in 2012, this company is starting on its path to a conservative $100M valuation if Abattis management executes on their plan for growth and value creation. Given the extensive track record and experience of management in the industry, the experience in all aspects from product innovation to sales and marketing, given the superior lineup of products that Abattis plans to roll out… Abattis is already well on track to be a major player in biotech industry. Abattis Biologix has entered into a 3 month marketing, promotion and corporate advisory contract with Beat the Market.