Success: Credibility key for seaweed venture

By Yoke Har Lee

Biotech company makes 90 per cent of its sales in overseas markets.

Margaret Holloway invested in expensive scientific tests to prove the therapeutic quality of Nemidon's seaweed-based gels. Photo / Marty Melville
Margaret Holloway invested in expensive scientific tests to prove the therapeutic quality of Nemidon's seaweed-based gels. Photo / Marty Melville

Nemidon's customers are a diverse lot - from elite sportspeople, to diabetics, to chimpanzees.

The company makes a range of gels derived from seaweed, including moisturiser, treatments for sports injuries, muscle aches and joint pain.

Ninety per cent of its products are exported and those overseas sales got a boost more than 10 years ago when founder Margaret Holloway took Nemidon's gel on a marketing trip to a United States triathlon trade show. Offering it to a visitor proved to be a good move - he turned out to be a member of the US Olympic committee.

"The visitor who came to our booth used the gel and was impressed by its qualities. He then asked if we would be prepared to put the gel up for the US market," Hollway said.

"What that has done for us is given us the credibility we needed early on to tackle our global push, as well as the credibility to enter the Aussie market."

A former nurse, Holloway had decided she needed to do something different and did some research, initially working with essential oils. That put her in contact with Dr Ian Miller, a New Zealand scientist working with the carbohydrates known as polysaccharides and a global authority on the subject, particularly in local seaweed.

Using Miller's expertise, Holloway set up Nemidon using a family trust structure. Together they developed a range of gels that are now sold in New Zealand, Australia, the US and Britain.

Nemidon's gels are formulated using a seaweed extract that acts as a carrier delivering the active ingredients needed for rehabilitation of the skin.

Endorsements from top sports health professionals, such as Dr Dale Richardson, have helped. Richardson is founder of ProGolf Health and senior adviser to the Titleist Performance Institute. He has used Nemidon gel with golfers including Nick Faldo and Michael Campbell.

Britain's National Health Service has approved the gel for use by diabetics, who suffer from cracked skin. Closer to home at Wellington Zoo, it has eased chimpanzees' dry, cracked feet.

Biotech companies typically struggle to gain a global presence, Holloway says.

New Zealand's isolation forces companies to go international early in their life cycle, because of the pressure to increase cashflow.

Developing research-based products is a lot of work, she says.

"It is easier to bring out generic products or copy-cat pharmaceutical products. With new inventions you have to constantly prove yourself."

One of the big expenses was conducting double-blind tests, in which neither the person receiving the treatment nor the person administering it knows what they are using. "We have managed to have the gel backed up with science, with huge success with these double-blind tests."

While New Zealand companies typically choose Australia as their first export prospect because of similarities in the two markets, Holloway cautions that Australia is highly regulated.

In the US, she believes that appointing a niche distributor is the best route for small New Zealand companies.

"New Zealand companies often have high-quality products that have to compete with companies with huge cashflow. If you go to large companies [for distribution] you are likely to get lost in the joint venture.

"It often takes time - you probably go through several [distributors] - before you find one." Kiwi companies going into partnerships with large brands typically - after about five years - see their own brands swallowed and their intellectual property taken away, says Holloway.

Work on credibility, she suggests. "Once you have the credibility, you will be in a strong position to negotiate ... Get into the niche market. In a large market, the population is big enough to give you good returns."

If she had to do it all again, she says, she would go after the niche markets sooner and not listen to advice about spending a lot on advertising.

"Take one strong bite" rather than try to gobble the entire market, she says.

As for the challenge of starting a biotech company, Holloway says "people are starting to realise how difficult it is".

New Zealand should offer some form of cheap financing - with strong audits and clawbacks - to help biotech companies in their incubation phase, as financing is one of the toughest challenges for start-ups.

Nemidon, which exports 90 per cent of its products, has had "enormous growth" over the past few years, Holloway says.

After spending more than seven years building credibility, the company is looking towards capitalising on the strength of its science to capture bigger markets overseas.

- NZ Herald

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