Jaguar snags China distributor after trials show benefits of pig supplement

pigs
Jaguar Animal Health has formed a distribution deal for a stomach remedy to treat piglets and dairy cows.

In July, Jaguar Animal Health ($JAGX) announced that it had completed two studies that offered the potential for the company to bring its gastrointestinal remedy for animals, Neonorm, to the booming China market. Now the company is confirming it has reached that goal, announcing on September 7 that it has formed a distribution agreement with California-based Integrated Animal Nutrition and Health to offer the main ingredient in Neonorm for dairy cattle and pigs in China.

The distribution agreement pertains to a botanical extract from the Croton lechleri plant, which Jaguar is currently developing into several drugs and supplements for production and companion animals. The two studies completed in China in July showed that the extract significantly relieved diarrhea in piglets, the company said. One of the studies was performed at a farm that had experienced an outbreak of porcine epidemic diarrhea virus (PEDv), a potentially fatal illness.

At that farm, Neonorm administered over two days resulted in a cure rate of 95% among piglets with PEDv, according to Jaguar. Another group of animals that received a smaller dosage over three days showed a 60% cure rate, the company said.

Under the new distribution agreement, Integrated Animal Nutrition and Health will take on all of the tasks and expenses associated with registering Jaguar’s product in China and marketing it there, according to a press release. Lisa Conte, Jaguar’s CEO, said in the release that the deal is part of a broader commercialization effort on the part of the company. “As we work to expand our commercialization efforts, we intend to seek out additional opportunities to enter key international markets,” she said.

China could prove a valuable market, indeed. China has seen an increase in demand for protein and dairy, due to a combination of factors, including rising incomes, changing dietary preferences and the relaxing of the country’s one-child policy in 2015. Swine production is roughly 723 million head per year in China, and there are more than 15 million dairy cows there, according to statistics from the Institute for Agriculture and Trade Policy cited by Jaguar.

Although Jaguar did not disclose a target timeline for introducing its product in China, there’s little doubt the company could use the revenue boost. It currently markets Neonorm Calf and Neonorm Foal in the U.S., but they only brought in $24,143 in sales during the most recent quarter. The company is working on versions of the product for beef cows, horses, and sheep, though it’s unclear how soon those will be ready for marketing.

Meanwhile, investors are waiting for news on Jaguar’s prescription drug candidates, which include Canalevia, a diarrhea treatment for dogs that’s also derived from Croton lechleri, and SB-300, an ulcer treatment for horses. Jaguar entered into a $15 million stock purchase agreement with Aspire Capital Fund in June, but it’s still burning through cash as it tries to bring its pipeline to fruition: The company’s R&D costs skyrocketed 12% to nearly $2 million in the most recent quarter and it reported an operating loss of $3.4 million.

- here’s the press release

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