Trio vies for share of action

SURPRISINGLY, Perth is home to not one but three Australian Stock Exchange-listed companies developing animal health products to replace the use of antibiotics.

While each of the companies has different technologies, all have identified opportunities flowing from consumer and regulatory resistance to the use of antibiotics in animals.

All three companies agree the potential market is enormous but their estimates of market size vary significantly.

Chemeq is the best known of these companies, having been listed since 1999, and in the S&P/ASX 200 index since July last year.

Imugene, which has been listed since 2002, is developing a range of animal health products and, following a licensing deal last week, is a direct competitor to Chemeq.

The third company is Stirling Products, which completed a backdoor listing earlier this year (see next page).

Chemeq executive chairman Graham Melrose says its polymeric antimicrobial supersedes the use of antiobiotics for growth purposes in animals, particularly pigs and chickens.

He estimates the global market is worth $9 billion annually, split between the pig industry ($4 billion) and the poultry industry ($5 billion).

Chemeq’s manufacturing plant will produce about 20 tonnes of polymeric antimicrobial per year, worth $20 million, so initially it will attack a tiny portion of the global market.

Imugene provides a much more detailed breakdown of the market opportunities.

It said its pig and poultry products aim to exploit market segments worth $US3.5 billion ($A5.0 billion) of the existing $US8 billion annual global spend on existing treatments.

One of its target segments is a product to prevent disease caused by E.coli bacteria in piglets – exactly the same market initially targeted by Chemeq.

Imugene said the market for E.coli disease prevention treatments in pigs was estimated to be worth $US450 million ($A640 million).

Stirling Products said the global market for animal health was estimated at more than $US10 billion, of which more than 30 per cent was represented by the use of feed additives, its target market.