A2 Corporation Limited Registered Office Address C/- Edinburgh Trust Level 10, Otago House 475 Moray Place Dunedin Directors McLACHLAN, Corran Norman GUTHRIE, James Kempster BURT, Wayne Leonard PATERSON, Howard James Background Incorporated: 17-FEB-2000 Major Shareholders Machin Investments Ltd - 21.3% NZ Central Securities Depository Ltd - 17.5% Lotus Capital Holdings Ltd - 16.7% SCL Business Holdings Ltd - 10.2% Silver Peaks Investments Ltd - 8.3% Shares on Issue 93,712,450 Ownership Restrictions None Known Share registry C/- Anderson Lloyd Otago House 475 Moray Place Dunedin Website www.a2corporation.com News
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 29th November 2002 - NBR Personal Investor DRUG GIANT TAKES UP A2 MILK QUESTIONS By Deborah Hill Cone Drug giant Bristol-Myers Squibb's nutrition subsidiary Mead Johnson was yesterday demanding answers from dairy company Fonterra over the A1 milk scandal. A brief statement supplied from Mead Johnson in the US said it was asking questions about research showing its infant formula Pregestimil has high levels of peptide beta-casomorphin-7 (MCM-7). BCM-7, a peptide release on the digestion of cow's milk, has been linked to the occurrence of some health disorders including diabetes and autism. At first BCM-7 was believed to be produced on digestion of all cow's milk but later was shown by both German and New Zealand researchers to be released only by milk with the A1 protein not A2 type protein. A confidential Fonterra memo said Fonterra research had shown that Pregestimil, a hypoallergenic formula targeted for babies and children with dairy intolerance, was shown to produce a high level of diabetes in rats in the Food & Diabetes trial, carried out by Professor Bob Elliott. "[Fonterra] has since shown that Pregestimil contains a high amount of BCM-7. This result is not known outside the New Zealand dairy industry and forms the basis of a confidential NZDRI [New Zealand Dairy Research Institute, since renamed Fonterra Research Centre] report," scientist Jeremy Hill wrote in the October 2000 Fonterra memo. Mead Johnson is asking for answers, given Pregestimil is promoted as being less likely to cause diabetes as it is for children with a dairy intolerance. A statement from Mead Johnson's Indiana head office said it had not seen data on the BCM-7 issue but had asked for it from Fonterra. "We do not know of any scientific data or published studies relating to BCM-7. Any links between BCM-7 and health risks are highly speculative. If we believed that there was any health risk associated with our product we would take action," Mead Johnson public affairs director Pete Paradossi said. Asked whether Mead Johnson was concerned Fonterra had kept information about Pregestimil from it, Mr Paradossi said: "They are not obligated to inform us of any studies they might conduct. However, we are always interested in research involving our products." Mr Paradossi said Mead Johnson was very familiar with the Food & Diabetes trial which shows Pregestimil lowers the risk of diabetes: "[But] regarding the separate issue of BCM-7 we have requested data from Fonterra." ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 14th September 2002 - Press Release EXPERIMENTS STRONGLY LINK SPECIFIC MILK PROTEIN TO HEART DISEASE Results of the first major independent scientific experiment targeting the relationship between heart disease and consumption of beta-casein A1 (a major protein in cows milk), commissioned by New Zealand company A2 Corporation, shows a direct link between the consumption of A1 casein and heart disease. Professor Julie Campbell, one of Australia�s leading heart disease scientists, from the Centre for Research in Vascular Biology at the University of Queensland studied the impact of feeding A1 and A2 casein to rabbits. Some groups of rabbits were also fed diets containing whey protein and no casein as a control. Dr Corran McLachlan, the Chief Executive of A2 Corporation said �The results of Professor Campbell�s tests showed a marked and significant difference in the heart disease outcome of rabbits depending whether they consumed A1 or A2 casein. The research demonstrates for the first time a direct link between the consumption of A1 casein & heart disease in an animal.� Professor Campbell has now submitted a detailed report on the results of her study to A2 Corporation, including recommendations for additional research to clarify exactly how consumption of beta casein A1 causes damage to arteries. Established in 2000, A2 Corporation was formed to commercialise opportunities arising from research indicating that beta casein A1, a protein component of cows� milk, may be a major risk factor for Type 1 diabetes and coronary heart disease. Beta casein A1 is one of two major variants of the beta casein gene present in dairy cattle � the other is beta casein A2. By selecting cows carrying only the A2 variant of beta casein, milk and milk products can be produced that avoid the risks associated with consumption of the beta casein A1 protein. This is known as �A2 Milk�. Professor Campbell�s report states: �Since children develop juvenile fatty streaks as a precursor to more advanced lesions in later life, the type of casein ingested in childhood may be critical to the likelihood of developing atherosclerosis. �The public could be offered the healthier choice of pure A2 milk which would be particularly important for the children of persons with known cardiovascular disease. Since the milk from Guernsey cows contains 98% A2 it may be possible to change herd composition by breeding out those cows with A1 alleles.� Professor Julie Campbell is the Director of the Centre for Research in Vascular Biology at the University of Queensland, Australia. She is also the Director of Wesley Research Institute Limited at Wesley Hospital. Professor Campbell is the author of 189 original referred papers and 3 books relating to cardiac and smooth muscle biology and to cardiovascular disease mechanisms. In addition she is a member of the editorial board of Arteriosclerosis and Thrombosis (1987-present) and the Journal of Vascular Research. The diets fed to the rabbits were specially formulated under the direction of Professor David Kritchevsky, of the Wistar Institute, Philadelphia, PA. USA. David Kritchevsky is one of the world�s foremost experts on nutrition, cancer and atherosclerosis in animals. He is a former president of the American Institute of Nutrition, Editor of Atherosclerosis Journal and sits on a number of other editorial boards. Professor Kritchevsky has had a remarkably distinguished career, receiving many acknowledgements for his contribution to science including a Research Career Award from the National Institutes of Health, Special Recognition Award - American Heart Association - Council on Arteriosclerosis. He also been a visiting Professor of the Royal Society of Medicine (London) and has an Honorary DSc from Purdue University. The scientific data in Professor Campbell�s report is expected to be published in a major scientific journal shortly. Neither A2 Corporation, Professor Campbell nor Professor Kritchevsky will be making any further comments about her research until it has been peer-reviewed and published. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 07.12.01 - NZUM A2 Corporation chief executive Corran McLachlan confirmed that Christchurch consumers should be the first to get A2 milk by the end of February. Cows in Otago and Canterbury are being tested for the A2 protein, which is believed to lower child diabetes and heart disease rates. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Friday 20th July 2001 - NBR Personal Investor The launch of A2 Corporation last year has been swathed in a flurry of excitement over the mega-dollar potential of its developmental A2 milk product but today, a year out, investors are still waiting for the supposed creamy froth of lucrative returns. The Dunedin-based biotech company contends that A2 milk, as opposed to the more common A1 milk produced in New Zealand and overseas herds, is a healthier product that lessens the chances of succumbing to heart disease or diabetes. But in doing so, the minnow from the south is pitting itself against a dairy industry, domestic and international, that has traditionally revolved around the previously unchallenged position of A1 milk and its associated products. The doubting Thomases, and there have been many, say the possible A1 link to people predisposed to diabetes and heart disease is not new. And they are right. Over the past two decades, studies in Finland, Iceland, France, Germany and Japan have acknowledged the links in those countries between A1 milk and a higher incidence of diabetes and heart disease than in countries where A1 milk is not consumed in large amounts. So has the overseas findings provided a golden opportunity for New Zealand scientists and their backers to tap into a possible goldmine, or is there greater substance beneath the A2 froth? Shoeshine has an open mind on the whole issue but detractors of A2 theory claim research over the years has yielded no substantive proof of the A1 disease link, or of the beneficial effects of A2 either. The cynics say the findings are correlative rather than a proved cause-and-effect case. However, A2 Corporation's Dr Corran McLachlan remains unfazed and points to examples of the Masai and Samburu tribes from Africa who have high milk intakes but almost negligible rates of coronary heart disease. This is apparently so because the tribes' traditional herds of cattle, goats and yak produce only A2 milk. If Dr McLachlan's theory holds water and can one day be proven beyond doubt, it must surely have the potential to turn A2 Corporation into a potential El Dorado. It is listed on the secondary board of the Stock Exchange, and information is therefore scant, but it is known Dr McLachlan is a 20% principal shareholder through his investment vehicle Machin Investments. Another 20%, interestingly enough, is owned by a couple of venture-capital companies from Monaco while some 50% of the company is tightly held by a handful of trusts - mainly Dunedin-based. A squint at the company's prospectus, issued to raise $12 million earlier this year, gives an indication about why the company has had no trouble in raising capital for its activities. For the 2002 year, A2 Corporation is conservatively expecting to make a net surplus of $15.6 million. By 2006, net profits are expected to rise to $129 million. The figures do provide a compelling argument for wanting to invest in A2 but is this still pie-in-the-sky financial projections or will A2 milk prove to be a true bonanza for its backers? Certainly there have been niggling doubts in some quarters about the ownership of intellectual property in connection with the A2 research but, last December, A2 Corporation reportedly paid $8.5 million for a half-share in the patent held jointly with the New Zealand Dairy Board covering the milk protein research and its link to Type 1 diabetes. A2 Corporation already holds 100% of the patent covering the McLachlan heart link work. But what are the chances of securing supply of A2 milk during a period when dairy farmers are already enjoying one their best seasons ever. Can A2 Corporation entice sufficient farmers to begin producing A2 milk for domestic and international consumption, or will the company need to run its own herds to produce the required supplies? There are approximately 14,000 dairy farmers in New Zealand and around 96% of what they produce is exported with only 4% going to the domestic market. Under GlobalCo, too, farmers are able to supply competitors with up to 20% of milk produced on their farms. If the right carrots are therefore dangled, securing adequate supplies of A2 should not pose a problem. There is also no regulatory bar to the production of A2 milk and the only impediment would be the time needed to genotype and sort the preferred A2 cows from the rest. But even this would be just a matter of course as A2 Corporation has already developed a DNA test to identify and select pure A2 cows. At present, approximately 20% of the New Zealand dairy herd produces pure A2 milk - sufficient to supply the New Zealand fresh milk market with pure A2 milk seven times over. However, by crossing the herd with A2/A2 bull semen, the percentage of pure A2 cows can be quickly increased - compelling stuff indeed. However, it won't be all plain sailing for A2. In Shoeshine's view, the acid test for the company will be in convincing consumers to switch to A2 milk. Old habits die hard and the benefits of A2 milk have yet to be proven. But then it is also human nature to err on the side of caution when in doubt. Ultimately, the one factor that will sway the minds of consumers will be the safety angle or, more importantly, the "perceived" safety angle. And if there is a "perceived" safer product on the market being offered at a non-prohibitive cost, consumers may well flock to it. Correct marketing and pricing will be therefore critical in the success or otherwise of the A2 product. If A2 Corporation gets it wrong, it will, at best, be peddling a health product in a niche market. If it gets it right, and further research backs up its A2 claims, the "blue sky" is potentially there. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ Friday 9th February 2001 - NBR Personal Investor, by Chris Hutching Dunedin-based bio-science company A2 Corporation chief executive David Parker says the company is well advanced with its plans for a stock exchange listing in New Zealand and Australia following a $12 million share placement. The placement of six million shares at $2 each was made to overseas shareholders who Mr Parker described as "wealthy influential individuals" who will be strategically important when the company opens offices in the US and Europe soon. The placement allowed the company to pay $8 million for a half-share of a 1994 patent owned by the Child Health Research Foundation, with the New Zealand Dairy Board holding the other half. The dual listing on the New Zealand and Australian stock exchanges will be preceded by a 1:4 share split to create more liquidity on February 15. The seldom-traded shares are listed by stockbrokers, with last trades at $3.20 (the shares were issued last year at $1 and have gone as high as $4). A 35% stake in the 20 million shares currently on issue is owned by researcher Corran McLachlan and 10% by Southern Capital, with smaller stakes held by a range of shareholders including the founder of both companies, Dunedin millionaire Howard Paterson. The company owns patents to market milk with A2 protein as opposed to milk with A1 protein that Mr McLachlan's research indicates may have a link with heart disease. Mr Parker said A2 would make its money from royalties on a DNA testing kit that will sell for $22 a cow and from royalties on the milk itself. About a third of the New Zealand dairy herd has the A2 protein and some cows have a mixture. ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~