Algae newcomer says it is using low-risk, proven fermentation approach to bring EPA-only oil to market

11-Feb-2015 - Last updated on 11-Feb-2015 at 15:01 GMT

AlgiSys did its proof of concept work in concert with the Michigan Biotechnology Institute.

The increased concern about the sustainability of omega-3s supply has given a powerful push to the development of alternative sources, now giving rise to yet another algae supplier. This one has a twist, though; officials with AlgiSys, a development stage biotech company, say they are using technology that has already been demonstrated at commercial scale.

Michael LoPresti, CEO of the Cleveland-based company, said AlgiSys has already raised $6 million in start-up capital. Part of the way the that the AlgiSys team, which includes chief technical officer Charles Roe, sold the idea to investors was to emphasize that the company is not breaking new ground per se, but is apply a proven technology in a new way.

“There are three primary ways to grow algae: in open ponds, in bioreactors and via fermentation,” LoPresti told NutraIngredients-USA. “It’s the division between phototrophic (using sunlight) and heterotrophic organisms. To date the real proven model has Martek’s (now part of DSM) using fermentation,” LoPresti said.

So the AlgiSys founders decided, given Martek’s huge success, to not try to reinvent the wheel but to using a similar technology in such way that it did not tread upon the existing patents. AlgiSys has been doing behind-the-scenes development work on a proprietary algae species that yields an EPA-rich oil in a fermentation setting. The Martek technology was centered on DHA.

“Our process follows a very similar model. We believe we will become one of the primary companies on the EPA side using fermentation,” LoPresti said.

Going to commercial scale

There have been almost as many methods proposed for the growing of algae for supplement ingredients has there have been strains that have been researched. Many approaches offer promise at bench scale but then founder when proponents try to ramp them up. Of particular concern has been controlling contamination in larger scale algal cultivation schemes.

This was a concern that led LoPresti and his fellow founders down the path blazed by Martek. Following the Martek lead has significantly reduced the company’s risk, he said.

“We don’t believe that a phototrophic approach has yet been proven to be completely scalable on the commercial level. We know that there is a significant amount of capital need to start up and sustain that model. And there are a lot of exposure points in that process where things can go wrong. So it’s a real win-win for our company in that we are following a path of proven scalability,” he said.

LoPresti said the company has met all of its development milestones to date. Initial work on the algal species was done at Virginia Tech University. The company’s technology platform was developed in concert with the Michigan Biotechnology Institute (BMI) in Lansing. BMI, which has a strategic partnership with Michigan State University, is a development nonprofit organization that works to “derisk” new technologies. AlgiSys performed its proof of concept and scale up work there as well as with some unnamed European research partners. The concept is now ready for prime time, LoPresti said.

“We have me all of our milestones to date and we have one last milestone to meet and that is to get to full commercialization. We have a North American and a European partner we are working with on that. At that point we will be able to produce commercial levels of omega-3s in 150,000 liter vessels,” he said.

Market potential

Up to now most omega-3 supplements on the market have offered some ratio of EPA and DHA in the same product. Part of this was driven by what was easily refined from fish oil, as the 18:12 EPA to DHA ratio became the industry benchmark. Now that there are different ratios and concentrations available, and EPA only or DHA only products are possible (Martek having blazed a path in this, too) Roe said there is significant market potential for an EPA-only product.

“Heart health and joint health are two indications for a standalone EPA product and joint health is particularly significant as we are moving on to an aging population. There is mood, too, but I don’t think we can say anything conclusively about that yet,” Roe said.

Sustainability message

LoPresti said the market for omega-3s will continue to grow, citing data that indicates it will hit $36 billion by 2016. All of that demand will place increasing pressure on supply, a question which is especially acute at the moment with the issues surrounding the Peruvian anchovy fishery, which was suspended altogether for the most recent catch season. Even if that fishery recovers, the supply question isn’t going away.

“Currently there are 32 pharmaceutical drugs based on omega-3s in the pipeline. The demand that is going to be placed on the supply by these high concentrations is going to be significant. With sustainability always going to be an issue on the horizon, that bodes well for a company like us where we can produce as much of the ingredient as is needed,” LoPresti said.