Antonio Cruz
Director General
Kurago Biotek
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View from the Top

Rising Demand for Functional Foods

Wed, 09/09/2015 - 16:41

Q: What is the story behind the creation of Kurago’s innovative functional foods?

A: Kurago Biotek was founded in August 2006 by five executives with experience in multinational companies. The original idea was to develop a type of candy containing a mixture of carbohydrates, proteins, vitamins, and minerals to help children with HIV/AIDS. We first contacted a senior researcher at the National Institute of Medical Science and Nutrition Salvador Zubirán (INCMNSZ), who provided us with very valuable insights after reviewing our project. We learned that, in order to improve people’s health, adding nutrients to the food is not as useful as improving the absorption of the nutrients.

We began researching probiotics such as lactobacillus, bifidobacteria, and streptococcus, and understood that their best natural habitat is the mucus of the upper third of the intestine. After this research, we developed Ventro, an innovative biogel that hosts these microorganisms and resembles the biochemical and biophysical conditions of the human intestine. This product ensures that the microorganisms are alive and metabolically active inside the biogel. They begin their colonization from the moment they are ingested and can help regularize digestion in no more than 24 hours, as opposed to weeks for other prebiotics.

Ventro can actually be categorized as a symbiotic, which is a functional food that contains both prebiotics and probiotics. A prebiotic is a non-digestible carbohydrate that is the energy source of probiotics, the beneficial microorganisms that live in the human gut. Their interaction triggers the production of different kinds of bioactive metabolites. Ventro was our first big hit in the market but we followed it up with other products, such as Ureless and Nutrihealth, which are distributed by Morepharma, owned by Sanfer group. Ureless reduces the toxins in chronic kidney disease, so it delays requirement for patient’s dialysis. Nutrihealth is an adjuvant for chemo and radiotherapy for cancer.

Q: What is the size of the prebiotics market in Mexico and how do you differentiate yourself within it?

A: The prebiotics market in Mexico is worth US$1 billion per year, mainly through dairy and tablets. Yakult’s earnings are US$376 million a year in Mexico while Activia brings in US$195 million. We have four products on the market, with Ventro being our main one. It is sold in Walmart and HEB where it has done very well despite being twice as expensive as the market leader and Walmart having slow sales for the last three years.

Despite these challenges, we have seen 25% growth and a GMROII over 4.5, while being sold alongside Yakult and Activia. I attribute this success to the many benefits of our product. Ventro has undergone clinical trials and is regulated by COFEPRIS as a Process Food under the category Gelatin with prebiotics and probiotics, and complies with NORM-051. It is the only product in its category which can display health claims such as the ability to regulate digestion and stimulate the immune system.

Q: What have the clinical trials revealed?

A: Our trials have shown that Ventro aids the digestive system by preventing slow digestion, returns, and blockage. Consumption for 40 days guarantees a stronger immune system. Ventro also stands out as it is not a dairy product, meaning that it does not have problems associated with lactose intolerance, allergies to milk, high calories, or fat. As for Nutrihealth, calprotectin was used as an inflammation biomarker in a clinical trial. Calprotectin increases during chemotherapy and radiotherapy treatments and, when it is not controlled, patients have to halt their treatment. The study group that received Nutrihealth, also a functional food, during the clinical trial saw significantly lower levels of inflammation within two or three weeks. This allowed them to continue with their treatments with fewer side-effects. Recognition of our products in the medical nutrition community has been a challenge. This is why we partnered with Morepharma, owned by Sanfer group. The company became our biotechnology license receptor for the medical nutrition market and exclusive distributor, allowing us to benefit from their prestige, knowledge, and well-trained sales representatives.

We established a number of alliances in products for the Mexican market. We manage our veterinary portfolio with Avimex, as well as licensing our biotechnology to the industrial group, PAVIA. Their holistic nutritional system of five functional food products is aimed at the regular health, nutrition and wellness market. Our zero-sugar biodigestive, Biogel, is under license to Reino Maya for direct sales.

Q: How have you collaborated with academic institutions and research centers in terms of intellectual property creation and protection?

A: In designing Ventro, ITESM conducted intellectual property searches to confirm that nobody had patented any product similar to the Ventro biogel before, allowing us to launch the product in Mexico, the US, Europe, and Chile, among others. We have a large technology network in Mexico, involving 22 of the biggest universities and research centers, such as UNAM, UDG, INCMNSZ, CIATEJ, IPN, and ITESO.

Our work is supported by the government institutions CONACYT, INADEM, and the Ministry of the Economy. Sharing or ownership of intellectual property is the first step in these collaborations. If the institution provides a service that could be offered by other parties, the intellectual property belongs to Kurago Biotek. However, if they bring a novel technique to the table or develop new research, we share the intellectual property with them. We worked with Santa Clara University in Silicon Valley to create a social model to deploy biotechnology in the market. As we seek joint ventures in Europe, we are counting on the support of IHK Germany.

Q: How are you planning to export your products as a Mexican company in an industry dominated by US, European, and Japanese competitors?

A: Ventro is not sold in the US yet but we have already founded a joint venture in California with a company that used to be Yakult’s major distributor in the country for the Latin market. We are now in the process of developing the image and packaging for the product in the US as well as sorting out the distribution channels. We expect to launch Ventro on the US market next year. In addition, we have been working with German & UK partners in order to transfer the technology to Europe. They have already seen our technology and the paper we presented in the second Conference on Immunology in Berlin in 2009 as well as our patents in Europe. Nevertheless, positioning an innovative Mexican product in Europe has been quite challenging as European countries are years ahead of the US in the field of functional foods.

There is another problem. Mexican pharmaceutical and food companies tend to fear commercial failure and prefer to develop generics rather than innovative products. Despite this, we have shown the ability to develop successful products with the collaboration of universities and research centers. Mexican companies like ours have everything they need to succeed without needing to call upon external talent and capabilities. Biotechnology will remain one of the most promising technologies in the world for several decades and Mexico has a huge window of opportunity to capitalize on this. Technological breakthroughs match up perfectly well with economic boom and bust cycles. Advances in the field of chemistry led to thousands of different products rapidly being developed. The likes of Microsoft, Apple, and Facebook have become pillars of the information age. Now, biotechnology has a similar chance as it will be the leading megatrend for 2015-2040 in three major areas: bioenergy, biopharma and biofood. Furthermore, we have the second major herbal medicine market after China and Mexico’s diversity of weather and soil allows it to produce nutraceutical agents and nutrients that modulate different health functions. Within Mexico, Jalisco is the perfect site for biofood companies due to its growing biocluster. The state holds four major advantages: its agriculture, its specialized universities and research centers, its booming food and pharmaceutical sectors, and a state government that has made IT, biopharma, and biofood areas for strategic development. The private sector has not been left behind as Jalisco has 22 ecosystems for entrepreneurial development, which have recently received considerable attention from foreign investors of late. Finally, the state has a huge diversity of fruits and roots, such as agave, from which inulin has been drawn and used as a very effective prebiotic.

Beyond this groundwork, biotechnology and biofood products need the development of collateral products. For example, the probiotics industry benefited greatly from Russia’s and Bulgaria’s production of yogurt. From that, a Japanese company isolated one strain of lactobacillus and produced functional dairy products, such fermented milk, before France innovated again and began producing yogurt as a beverage. Finally, this all led to Kurago Biotek launching Ventro a biotechnologically formulated gelatin.

Q: What is your vision for 2015?

A: We want to expand our market in Mexico while starting our operations in the US and finalizing our technology transfer agreement with Germany or UK. For the future, we want to develop products through the bioconjugation of molecules, which is the bonding of two or more molecules for a specific therapeutic purpose, such as fighting cancer.