22 March 2007
From New Zealand Trade and Enterprise - Success Stories
New Zealand Pharmaceuticals (NZP) is a leading New Zealand biotechnology company, manufacturing and exporting pharmaceutical ingredients and diagnostic products for major global pharmaceutical and biotech companies, and producing a range of dietary supplements.
NZP is well connected globally, exporting almost all of its products to more than 150 customers in 30 countries around the world. 
Its product line up includes direct pharmaceutical ingredients such as digestive aids, antiviral agents and drug delivery agents, as well as a range of biochemicals and natural extracts for the international health food, cosmetic, biotechnology and aquaculture industries.
The company was originally formed, in 1971, to extract and purify biochemicals from by-products of New Zealand’s meat processing industry. This includes cholic acid, extracted from bile, used as a pharmaceutical intermediate in products to treat liver complaints.
NZP Managing Director, Dr Richard Garland, says cholic acid was one of the company’s first products and demand for it continues to grow, with sales accounting for almost half the company’s export revenues. NZP is one of the three largest producers of cholic acid in the world.
As well as continuing with its core business, NZP has also moved into manufacturing carbohydrate compounds for a promising range of new drugs to treat cancers, heart disease and other life threatening diseases.
It recently opened a NZ$10 million speciality products facility in Palmerston North. Dr Garland says this gives NZP the capability to manufacture a wide range of specialty carbohydrates on a significant scale, and the means to become a key niche player in the global market,
NZP’s exports of the new specialty carbohydrates have the potential to grow in value to NZ$50 million over the next five to ten years.
Underpinning this new direction for NZP is a close working relationship with the glycotherapeutic research team at Industrial Research Limited, one of New Zealand’s nine, government-funded Crown Research Institutes. Glycotherapeutics, which offer a new and more effective delivery mechanism for drugs, is experiencing growth rates of nearly 20 per cent a year with excellent long term growth expected.
The Industrial Research team, led by Dr Richard Furneaux, has a long established reputation in the development of novel carbohydrate compounds for big pharmaceutical companies, and has several intellectual property arrangements with NZP which assist it to cost effectively produce the carbohydrate-based building blocks required to make the new drugs.
“The new specialty products facility is crucial to our ongoing success,” says Dr Garland. “Good Manufacturing Practice is the key quality standard for NZP and an essential element in the acceptance of our products in pharmaceutical and biotechnology markets. The new plant gives NZP the platform to take business to a new level, enhanced operational capability and advanced compliance levels.
Dr Garland says during its 36-year history, NZP has built a reputation as a reliable producer of high quality products. This is further strengthened by the international recognition of New Zealand’s ‘clean, green’ and ‘disease-free’ status.
Broadening its product portfolio has been an ongoing focus for NZP and, in addition to specialty carbohydrates, the company is also diversifying into the development of plant extracts. Its unique product lines include a range of blackcurrant extracts under the brand ‘Just the Berries’ which are being successfully marketed in the Japanese functional foods market.
NZP is owned by private equity firm Direct Capital and NZP management and staff. It is ranked in the New Zealand top 500 list of companies and has a market value of more than NZ$100 million. The company employs 100 people at its production site in Palmerston North.
Key export markets are Japan, the United States and Europe with opportunities in India currently being explored.
Dr Garland says NZP is able to compete with lower-cost manufacturers like China and India by focusing on high value specialised niche products that its customers need.
“It’s a key differentiator we have as a business and New Zealand has as a country. We don’t often need huge economies of scale that other international businesses believe are necessary. We can accept what may look like a small scale business, but which has potential to develop. One of our competitive advantages with new products is speed to market and the fact that we are flexible and responsive.”
He says NZP nurtures its client relationships, regularly visiting top customers and using agents around the world.
New Zealand Trade and Enterprise (NZTE) has worked closely with NZP in recent years, providing funding to help with the design and consultancy for its new manufacturing facility, market development grants and including NZP in trade missions to Europe, the US and Australia.
In 2005, NZP won New Zealand’s first technology makeover contest, sponsored by Microsoft and Hewlett Packard. NZTE identified NZP as its first ‘Pathfinder’ company – a leader in its field with the ability to create further wealth in the community by taking new products to international markets. In 2006 NZP was a finalist in the NZTE Export Awards.
22 February 2007
New Zealand is sealing its success in the drug development world by opening a purpose built facility to produce carbohydrate compounds for a promising range of new drugs to treat cancers, heart disease and other life threatening diseases.
The $10 million Specialty Products Facility is the largest single investment in the 35 year history of New Zealand Pharmaceuticals Limited (NZP).
This new factory is a new beginning for NZP and the beginning of a new industry for NZ,” says Richard Garland, Managing Director of NZP.
NZP is already an established manufacturer of biochemicals and is one of the three large producers of cholic acid in the world. Its customers include the leading global pharmaceutical and biotechnology companies. More than 99% of production is exported.
“This investment opens new horizons for the company,” Dr Garland says.
“It gives us a toolset to manufacture a wide range of specialty carbohydrates on a significant scale and the means to become a key niche player in the global market.”
Initially, the facility will manufacture a carbohydrate mainly for American and Japanese pharmaceutical companies while a further range of products is developed.
NZP’s exports of specialty carbohydrates are expected to exceed $5 million this year and have the potential to grow 10-fold over the next five to 10 years.
Specialty carbohydrates are a key ingredient in glycotherapeutics, a new and more effective delivery mechanism for drugs, which are experiencing growth rates of nearly 20 per cent a year and are expected to experience long term growth.
New Zealand Trade & Enterprise identified NZP as its first “Pathfinder” company – a leader in its field with the ability to create further wealth in the community by taking new products to international markets.
Underpinning NZP’s investment in carbohydrate compounds is a close working relationship with the world renowned glycotherapeutic research team at Industrial Research Limited (IRL), a Crown Research Institute.
The team, led by Dr Richard Furneaux at the GlycoSyn business unit of IRL, has a long established reputation in the development of novel carbohydrate compounds for big pharmaceutical companies. This is backed by projects with world-class research partners such as Albert Einstein College of Medicine in New York and biotechnology companies such as BioCryst Pharmaceuticals who have since progressed deals with Roche and MundiPharma.
“This is an exciting phase in the development of NZP. The marrying of IRL’s research and NZP’s production expertise is creating the competitive edge necessary in this sophisticated market,” Dr Garland says.
NZP is a privately owned company whose shareholders include private equity investor Direct Capital. The company anticipates an Initial Public Offering of Shares and a listing on the New Zealand sharemarket within the next 15 months.
NZP employs 100 staff at its production site in Palmerston North. Its main product is used for making drugs that treat liver disorders and it has a range of other biochemicals used as pharmaceutical ingredients, dietary supplements, and in microbiological and fermentation media that are supplied to leading pharmaceutical and biotechnology manufacturers around the world.