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edible crops, such as corn, it’s already classified as food. Several food and cosmetic companies are working with Phytoption to evaluate the technology with different ingredients; confidentiality agreements bar Zhang from disclosing their names, though she says some are Fortune 500 companies and others are smaller businesses.
For pharmaceutical applications, the Phytoption biomaterial would need FDA approval as a new drug excipient. Zhang says Phytoption has one pharma partner evaluating the technology for potential use in its drugs.
Phytoption traces its origins to Purdue University, where the company’s scientific co-founder was conducting biomaterials research. Founded in 2011, the company operates from the Purdue Research Park in West Lafayette. Last year, Phytoption won the 2015 BioCrossroads New Venture Competition, earning a $25,000 cash prize. The company isn’t drawing revenue from product sales yet, Zhang says, though it has some financial support from the partners that are evaluating the solubility technology.
Federal grants support Phytoption’s research efforts. Earlier this year, the company was awarded $749,785 through a Small Business Innovation Research grant. Henry Havel, a retired Eli Lilly (NYSE: LLY) scientist, joined Phytoption in March to lead the company’s R&D.
The startup is now trying to raise $2 million from investors, which Zhang says will be applied toward pilot manufacturing and commercialization of the technology. For food and cosmetics companies, Phytoption would become an ingredient supplier. To the pharma industry, Phytoption would become a vendor, making and supplying its ingredient to drug makers.
The length of the FDA’s typical approval process for a new drug excipient means that Phytoption’s first commercial uses will likely be in food and cosmetics. The company is targeting premium cosmetic applications, such as natural cosmetics, or high functionality, such as anti-aging products comprised of tough-to-deliver ingredients that current technologies can’t dissolve.
Zhang, who held business roles for food ingredient company Danisco in Asia and the United States prior to starting Phytoption, acknowledges that the food market will be tougher to crack because of the low profit margins associated with most food products. To break into the food industry, she says Phytoption will pursue niche applications where competing technologies can’t achieve solubility. But just as tough will be winning over businesses that may be reluctant to change longstanding food processing practices. Zhang says Phytoption must prove to them the technology’s cost advantage.
“Sometimes in industry, especially in established companies, people may not be willing to explore new things to tackle that problem,” she says. “But once you have something ready to solve that problem with a feasible cost, then that becomes attractive.”
Photo courtesy of Flickr user U.S. Department of Agriculture via a Creative Commons license.