Saskatoon Fund Invests in Nutraceutical Firm
Release Date: June 29, 2005
Investments announced Tuesday in an Edmonton-based nutraceutical company should bolster processing jobs and crop research in Saskatoon, and advance the growing market for natural health products.
Cevena Bioproducts Inc., a company spun off three years ago from University of Alberta research work in analysing and isolating the beta-glucan components within oats and barley, received $6 million in financing from four different funds this week.
The company intends to produce a concentrated beta-glucan product called Viscofiber, which can be sold as a food product ingredient and a natural dietary supplement to lower cholesterol.
Among the venture capital funds putting money into Cevena is Golden Opportunities Fund of Saskatoon, which is investing $1.5 million.
Cevena CEO Kim Lucas says Saskatoon will benefit in a number of ways.
The company has a small office at Innovation Place, but the processing needed to separate the beta-glucan concentrate from the raw oats and barley will be done at Innovation Place’s Bioprocessing Centre. That facility was originally built by the defunct Canamino Inc. firm to separate oats into various components or fractions.
The Cevena CEO says his company will be buying quite a few hours of time during the next five years at the bioprocessing centre, a facility that employs about 15 people.
“We’re looking forward to a long and fruitful relationship with (Cevena),” said Austin Beggs, director of marketing and corporate development for Innovation Place, which manages the bioprocessing centre.
As well, Cevena will encourage farmers to grow high beta-glucan oat and barley varieties developed by the University of Saskatchewan’s Crop Development Centre (CDC), which will receive royalties on seed usage.
Cevena is involved in a study of 200 patients conducted by the University of Toronto and University of Calgary to test the effectiveness of Viscofiber. Those results will be delivered to the U.S. Food and Drug Administration, Lucas said.
The FDA has since 1998 recognized the health benefits of beta-glucan within oat cereal as a natural cholesterol lowering agent.
“That health claim for oats has been on the Cheerios box since then,” Lucas said. “What the makers of Cheerios don’t say is you’d have to eat five or six bowls a day to gain the full benefits.”
That’s why Lucas and Cevena’s developers believe there will be a market for a concentrated form of beta-glucan. In addition to beta-glucan from oats, the company’s Viscofiber formula also incorporates the same type of molecules from special types of high beta-glucan barley.
The Innovation Place Bioprocessing Centre will use Cevena’s patented solvent-based process to extract the beta-glucan from the oats and barley in more or less pristine form.
Lucas says high-quality beta-glucan has a waxing effect within the body. In the stomach, this provides a coating to slow down the absorption of glucose. Besides providing a cholesterol-reducing benefit, a beta-glucan can also help diabetics who can still control their disease by slowing the uptake of glucose within the body.
Golden Opportunities Fund CEO Grant Kook says the Cevena investment allows the fund to join a “sophisticated syndication group” in the health sector. The Golden Opportunities investment gives the fund about 18 per cent ownership of Cevena.
Among the other venture funds putting money in is Foragen Technologies Management Inc. headed by former Saskatoon resident Murray McLaughlin. Foragen maintains an investment office in Saskatoon.
June 29, 2005
© The StarPhoenix (Saskatoon) 2005