November 10,2003

Swedish Probiotics Firm BioGaia To Market Its Reuteri Bacteria to Global Dairy Industry

Swedish probiotics firm BioGaia has taken over the marketing of its Reuteri bacteria to the international dairy industry, formerly managed by Denmark's Chr. Hansen.

An agreement in November 1999 giving Chr Hansen exclusive rights to market Reuteri to dairy customers worldwide has now been terminated. This will allow BioGaia to more rapidly increase revenue from new customers in the dairy segment, said Peter Rothschild, the firm¡¯s managing director.

BioGaia also announced last week that it had signed a license agreement with a major food company in China and Taiwan for the right to use its patented probiotic bacteria in certain dairy products. The agreement is one of several new ventures set up by the small firm this year, including most recently a deal with Swedish food manufacturer Procordia Food.

The unnamed company will launch a yoghurt beverage on the Chinese market, where Reuteri has been approved for use as an ingredient in food products. The launch is scheduled for the second half of 2004 in China and during 2005 in Taiwan.

"For BioGaia this was a logical move which will further strengthen our position in the Asian market, where acceptance of probiotic products among consumers is greater than in other parts of the world. Not only is the deal expected to generate considerable revenue over the contract period but it has also accelerated the approval process for Reuteri in China," said Rothschild.

He described the unnamed company as one of the leading food manufacturers in Taiwan, which in recent years has also established significant operations in China.

According to Rothschild, it has an annual turnover of more than $1.5 billion and around fifty production plants situated in China.

The company also makes other types of beverages and foods which could be of interest in the future, given Reuteri's recent approval in China.

Earlier this year BioGaia signed an agreement for its LifeTop Straw to be distributed to a major Chinese dairy company. The product launch is expected to take place in April 2004.