TyraTech PLC (LON:TYR) is proving there is life after Vamousse – the hair lice treatment it sold last year.
Alliance Pharma agreed to pay US$17.5mln for the worldwide rights to Vamousse - with US$13mln coming upfront, followed by US$4.5mln of contingent payments tied to sales milestones.
The deal leaves TyraTech free to focus on developing technology for the control of insects and parasites, where it sees a possible US$6bn market.
Animals have pests too
Fantastic though the Vamousse product was, the potential in the animal health market dwarfs that of the human head lice treatment market.
The world's population is expanding at a rapid rate, and with it, the need for protein, and the world simply cannot afford the loss of animal production caused by parasites.
Treatments do exist, of course, to combat parasites but again we are talking old-school solutions that come with concomitant dangers to the environment and the food chain.
No one wants to see a return to the days of mass use of DDT, for instance.
Like all of TyraTech's technology, though, its PureScience products are environmentally friendly, plus, of course, they work.
As chief executive officer Bruno Jactel has previously observed, not all insecticides are so beneficial to the food chain.
“We also note with great interest the recent issues regarding the use of unauthorized insecticides to control red mites in poultry facilities in Europe and the resulting effects on egg production. We believe that our pesticide-free products deliver competitive efficacy against the red mite, which is a major problem in Europe. We have already initiated field studies in France and plan to progress this opportunity as quickly as resources and the regulatory situation permit," Jactel said.
Meanwhile, the PureScience range of animal health products targeting poultry production operations has also made good progress from a small base with limited marketing support.
The latter – limited marketing support – was always a problem for the company in terms of realising the product potential of Vamousse, and it is to be hoped that the proceeds from the sale of the head lice product will give the company the wherewithal to develop its animal health technology.
Looking to jump-start the development pipeline
In 2018, the operational goals are to expand the market penetration of the products already launched and to jump-start its development pipeline, focusing on products targeting the biggest markets – namely, the control of internal parasites in production animals.
In May 2018, the company reported on progress made on several fronts.
PureScience Poultry Mite unit sales were up 250% year-on-year, albeit from a modest base, with the company having achieved nationwide distribution in the USA with MWI Animal Health, which is the biggest distributor of animal health products in the US.
The company is in the process of expanding the usage of Poultry Mite Dust to Europe where the market is larger, estimated at US$40 million a year.
Sales of its Outsmart equine repellent to its partner, SmartPak, were up sharply on the same period of 2017, and SmartPak intends to release a new formulation of the product this year for use on sensitive parts of a horse, such as around the eyes.
“We are first focusing our development pipeline on the control of coccidiosis, a protozoan parasite of poultry,” the company told shareholders in May.
Coccidiosis, a parasite of the guts in poultry, is very common. Worldwide, the annual cost inflicted by coccidiosis to commercial poultry has been estimated at US$2 billion. The worldwide market for products to control coccidiosis is estimated at US$1 billion annually and current chemical or biological solutions are not satisfactory, TyraTech said.
“We could anticipate a streamlined launch for this future product because it would benefit from the commercial operations already established by our Poultry Mite Dust in the poultry sector,” the company said.
The worms have turned
The company also plans to direct its development effort on controlling intestinal and stomach worms in ruminants, a worldwide market valued at US$3 billion.
Ruminants are frequently infested by intestinal and stomach worms and the annoying parasites have developed resistance to the pharmaceutical products currently used.
Multiple test-tube studies have demonstrated that TyraTech's specifically designed formulations control several species of intestinal worms, while a pivotal study has been conducted on live pigs, independently managed by the University of Georgia (USA), which showed that TyraTech’s product significantly reduced the load of worms in the pigs by 70%.
More studies will need to be designed to optimise the formulations and demonstrate that they are also effective in ruminants but TyraTech regards the studies completed so far as significant milestones.
“After numerous positive lab studies, we are now moving to the Phase II of our development pipeline to test our products against internal parasites directly on animals. Initial probe studies are encouraging and show that we are moving in the right direction,” Jactel claimed.
Having sold off its money-spinner, Vamousse, the company made a loss from continuing operations in 2017 of US$4.4mln, which was a slight improvement on the year before.