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Executive Summary

BIO-TECHNOLOGY GENERAL HYALURONIC ACID PRODUCTION CAPACITY IS 400 Kg annually as a result of a newly developed technique, company President Sim Fass, PhD, said Oct. 9 at a medical conference sponsored by Robertson, Colman & Stephens in San Francisco. Noting that current worldwide consumption of the substance is only about 100 kilograms annually, Fass said that "we have been able to isolate a streptococcus bacteria that in and of itself produces hyaluronic acid." Mutations in the bacteria have resulted in a strain "that produces lots and lots of hyaluronic acid," Fass said. Hyaluronic acid is a natural moisturizing lubricant found in human skin and joints, Fass pointed out. Previously, the substance has been extracted for commercial use from rooster combs, umbilical cords and shark skin, at prices ranging from $100,000 to $500,000 a kilogram. The Bio-Technology production technique gives the firm a capacity that "probably . . . is the largest in the world," Fass maintained. At present, hyaluronic acid use is limited primarily to cosmetics (as a moisturizing agent), and ophthalmic surgery. "Pharmacia has a very, very successful product, Healon, which incorporates pure hyaluronic acid, pharmaceutical grade, with a high molecular weight . . . that is used in ophthalmic surgical procedures to return to the eye the viscous gel fluid" lost during surgery, Fass said. Estee Lauder's Night Repair, a "popular product", also uses hyaluronic acid as its key ingredient, he said. The margins on hyaluronic acid are very high, Fass pointed out. Pharmacia's use of the substance totals three to four kilos a year, he said, which the Swedish pharmaceutical concern sells for about $8 mil. a kilo, list price. Pharmacia's cost for the raw material is about $150,000 per kilo, according to Fass, "so the margins are there." The potential for hyaluronic acid extends far beyond its current indications, Fass predicted. Possible applications include arthritis, drug delivery systems, and any surgical procedure where organs, tissues or vessels could be coated with a lubricant to prevent postoperative adhesions. "Pharmacia and others have projected potential consumption of hyaluronic acid for these indications of 200, 300, [or] 400 kilograms a year," Fass said. "In dollar estimations, our projection of $500 mil. per year is a conservative one." Bio-Technology currently is negotiating with a number of companies concerning supply agreements, Fass said, adding that the company already has demonstrated the purity specifications of its product in owl monkey tests for Pharmacia. "It is interesting that other ophthalmic companies, in the U.S. especially, who are interested in pursuing this product and wish not to get into an infringement situation with Pharmacia, have talked to us about a lower molecular weight product of 700,000." Pharmacia's Healon has molecular weight of "750,000 or greater," according to Fass. Bio-Technology also has negotiated a worldwide distribution agreement with an unnamed firm for cosmetic grade material. The company expects to make an announcement "in the next 30 to 60 days," Fass said. Founded in 1980, Bio-Technology conducts its research efforts in Israel, but expects to establish a U.S.-based research satellite in the next couple of years, Fass said. The firm employs about 70 people. In addition to human health, Bio-Technology also has businesses in animal health and agrobiologicals.

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