Epax only does about 20% of its business in pharma – the rest is in food supplements – but it has upgraded facilities to make them fully pharma-API (active pharmaceutical ingredient) compliant and Snove says: “We see tremendous growth in pharmaceuticals.”
The entry of BASF and DSM back up his stellar prediction, not that food-grade suppliers need feel frozen out. “We still see tremendous opportunities in dietary supplements especially in the US and Asia and the European market is picking up again after a slow year,” said Snove.
High-dose is not all about cardiovascular drugs after all…especially when omega-3 forms like DHA (docosahexaenoic acid) and EPA (eicosapentaenoic acid) have approved health claims around brain, heart and infant health in many countries.
There may be 36 omega-3 drugs in the R&D pipeline, but drug approval is a long process which may explain why only three have been approved.
Landscapes, seascapes…
Epax remains a major player but has been dwarfed somewhat by the nutrient divisions of BASF and DSM wading in and splashing about €2bn on leading players like Martek Biosciences (DSM, €830m approx), Equateq (BASF, undisclosed), Ocean Nutrition Canada (DSM, €430m) and Pronova Biopharma (BASF, €690m).
It gets a little weird when you consider Epax was once a part of Pronova but since 2010 is owned by Trygg Pharma – a 50-50 JV between krill supplier Aker Biomarine and New York venture capitalist Lindsay Goldberg. They paid €70m. And don't forget BASF's €3bn Cognis buy in mid-2010 - not an omega-3 exclusivist, but a major supplier nonetheless. Anyway, let’s not go there…
It’s a new landscape, or seascape, that many are seeing purely in terms of the pharma patent situation.
White space
Statements like the one that follows from Walter Dissinger, the president of BASF’s nutrition and health division, can fuel such perceptions. He told us at a December 2012 opening of its Equateq Scottish omega-3 outpost now named BASF Callanish: "The patent cliff that is coming is an opportunity."
But maybe it’s not that simple because while GlaxoSmithKline’s coming-off-patent, billion dollar cholesterol-busting blockbuster, Omacor/Lovaza, is creating a lot of head-scratching in omega-3 corporate thinktanks in a hot-to-sizzling sector, high-end also includes high-dose supplements and even foods and medical foods.
Dissinger acknowledged as much when in the same interview he added: "We see large opportunities in functional foods as well as dietary supplements. We see a new market in dietary supplements coming which we call white space - coming from the highly concentrated omega-3."
Drugs, foods
Despite all the pharma hype, omega-3 low-end and high-end food, drinks and food supplements still dwarf omega-3 drugs in global value by something like a factor of 10 - €20bn to €2bn going by Euromonitor and GOED (Global Organisation for EPA and DHA Omega-3s) market data.
In food, the near-ubiquitous use of algae-sourced DHA omega-3 in infant formula in North America and other regions was a key factor in DSM’s 2010 decision to spend more than €800m on Maryland-based algae leader, Martek.
Throw in regular foods-beverages – now worth something like €6bn according to GOED – and you can see the low-end market is hardly melting before the generic pharma frenzy.
What is clear is the ability of omega-3 to positively impact health. One side-effect of all this activity may be to throw a compelling light on the ongoing and sometimes acrimonious debate that rages around the role of medicines and foods. How very often, despite what laws may state, there is very little to separate them once they are imbibed and taking action in sick - or well - human bodies.
As Snove observes: “We are happy to be in both markets.”
There appears plenty of room to fly high in both...and even to fly low.