Botry-Zen Limited
Registered Office Address
156 Frederick Street
Dunedin
Directors
SHEPHERD, Maxwell Gilbert
PATERSON, Howard
HUNG, Cheung-Tak
History
Incorporated: 04-APR-2001
Major Shareholders
University of Otago - 20%
Shares on Issue
Ownership Restrictions
None Known
Share Registry
Unknown
Website
http://home.xtra.co.nz/hosts/botryzen/
News
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7th June 2002 - NBR Personal Investor, by Chris Hutching
RIVALS NIP AT BOTRY-ZEN'S HEELS
The promoters of Botry-Zen are pushing ahead with a Stock Exchange listing and more field
trials to stay ahead of competitors also close to commercial production of anti-botrytis
agents.
The latest proposal to Botry-Zen shareholders is for a July listing - a delay on the listing
date announced last year of February due to hitches in production and application trials.
Investors clearly had high expectations when they massively over-subscribed the $5 million
Botry-Zen float by southern businessman Howard Paterson last year by about $115 million.
The Botry-Zen organic control agent includes an active organism that out-competes the
botrytis fungal infection and can be used on a wide range of crops and particularly grapes.
But Botry-Zen is competing in a race against other serious contenders to provide an
anti-botrytis solution for the wine and horticulture industry.
Listed Certified Organics has two years of northern hemisphere trials under its belt and
plans for field trials in New Zealand next year for its organic, microbial fermentation
formulation that controls fruit rots, including botrytis and grape sour rot.
Certified Organics has already established a distribution chain for its products in New
Zealand, has appointed agents in Australia, and is in the process of setting up joint
ventures internationally to market and distribute its products.
The company has struck a licensing agreement to commercialise the product being developed by
its partner, BioDiscovery, and the companies will collaborate to develop other organic
biopesticides, fungicides and herbicides.
The company's biological botrytis control is thought to work by altering the levels of
naturally occurring favourable populations of bacteria and fungi on the plant, reducing the
incidence of unfavourable micro organisms.
Certified Organics managing director Dr Earl Stevens said Botry-Zen might have a profile
advantage in the investment market because it had been developed closely in conjunction with
the wine industry and HortResearch but the business plan appeared to hinge on cornering a
significant portion of the market.
He questioned the vulnerability of a single-product company and the purpose of listing on the
Stock Exchange at such an early stage in its commercialisation.
Certified Organics would be launching on to the market its own home garden range of natural
weed killers based on pine extract this Spring.
Dr Earl said while his company competed with Botry-Zen, it was pleasing to see entrepreneurs
like Mr Paterson raise the profile of New Zealand's bio-technology industry.
He said botrytis was estimated to cost the New Zealand wine industry some $18 million a year
in lost production and control measures, and the kiwifruit industry $20 million.
The most common control method is to spray crops with chemical fungicides that plants may
develop resistance to and which consumers distrust.
Meanwhile, Botry-Zen chairman Dr Max Shepherd said in a letter to shareholders that they will
be asked to approve a new constitution at a special general meeting in Dunedin on June 19.
In a letter to shareholders he outlined recent problems that have been overcome.
Previously Botry-Zen had been embodied in a liquid suspension, which was susceptible to a
wide fluctuation in temperature during transit and also to variations depending on the end
users' storage and application techniques.
This had led to variations in product concentration and some technical difficulties in
application. Despite this, field trials during the past season have again produced pleasing
results, with the Botry-Zen product controlling botrytis infections in Gisborne, Hawke's Bay
and Marlborough.
The product is now produced as a paste which has solved the early inconsistencies and
lengthened the shelf life to many months, according to Botry-Zen CEO John Scandrett.
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Press Release by Botry-Zen at 28 May 2002 12:50
Botry-Zen Ltd, the company pioneering the international launch and commercialisation of an
organic control for Botrytis fungal infections in a wide range of crops, but particularly in
grapes, is expecting to list on the main board of the New Zealand Stock Exchange in July.
Shareholders will be asked to approve the adoption of a new constitution, which complies with
NZSE listing rules, at a special general meeting in Dunedin on June 19, according to chairman
Dr Max Shepherd.
The company had expected to list earlier this year but this had been delayed for a number of
reasons, "including investigations as to whether it might be more appropriate to list the
company on a foreign Stock Exchange. Having carefully reviewed all aspects of this
opportunity, the directors have decided to proceed without further delay with an NZSE
listing".
In a newsletter to shareholders, Dr Shepherd says that following some teething problems with
last seasons' trials, the company has refined its manufacturing process.
Previously Botry-Zen had been embodied in a liquid suspension, which was susceptible to a
wide fluctuation in temperature during transit and also to variations depending on the end
users' storage and application techniques.
This had led to variations in product concentration and some technical difficulties in
application, problems that have now been remedied through improvements in the manufacturing
process.
Despite this, field trials during the past season have again produced pleasing results with
the Botry-Zen product controlling Botrytis infections in Gisborne, Hawkes Bay and Marlborough
regions.
"The results achieved are typical and illustrate the effectiveness of Botry-Zen" Dr Shepherd
says.
Commenting on the improved manufacturing process, Botry-Zen chief Executive Mr John Scandrett
said today, "the successful development of the paste by our Research and Development team is
the most significant step in the company's history to date. It has enabled us to solve the
early product inconsistencies experienced in the trials and most significantly; we have taken
the product shelf life from several weeks to many months.
"This will enable the company to manufacture for 12 months of the year rather than over a 26
week cycle and as a consequence we can seriously plan to supply Northern Hemisphere markets
in an export capacity as opposed to the off-shore manufacturing licensing options considered
previously".
The company is moving quickly to expand the Dunedin plant and currently an investment of
$700,000 is underway for plant improvements over the next three months. Employee numbers will
increase from 12 at present to over 20, Mr Scandrett said.
Dr Shepherd describes Botry-Zen as a "clean green biological control product", and notes that
the directors of the company remain confident that Botry-Zen "is a world leading product with
global earnings prospects".
Annual accounts for the year ended March 31 2002 are presently with the auditors and will be
circulated along with a notice of annual meeting once the audit process is complete.
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Friday 17th May 2002 - NBR Personal Investor, by Deborah Hill Cone
New Botry-Zen chief executive John Scandrett says the company has successfully developed a
"new format" of its grape-rot product, in response to a teething problem revealed in trials.
The trials exposed some problems with the liquid suspension formulation of Botry-Zen because
of the tight time-frame in which it must be transported to vineyards. It has a short shelf
life and does not travel well, Mr Scandrett says.
But this has been overcome by developing a different product "format" from the liquid
suspension formulation.
The product will still be applied by spraying on to the vines.
"As with any new product there have been some hiccups but we were still able to get the
product on to the vines and demonstrate it worked and worked well."
Mr Scandrett says he cannot reveal details of the new format as it may represent new
intellectual property (IP) and is going through the patent process. The opportunity to get a
patent can be lost if details of the IP are released into the public domain.
But Mr Scandrett says the company is very pleased with the results of the trials, in which 60
winegrowers took part. "We have a high level of faith in the product."
Bunch rot caused by botrytis cinerea has been estimated to cost the local wine and
grape-growing industry $30 million in lost sales and the cost of control measures.
Botry-Zen is a non-pathogenic fungus, which acts as a biological control agent by competing
for the same niche as botrytis cinerea.
Mr Scandrett says the tests show when Botry-Zen is "applied correctly and in a timely
fashion" it is on a comparative basis with traditional chemical fungicides.
Botry-Zen has invested $600,000 in setting up production facilities in Dunedin. It is now
looking at manufacturing the product there to be distributed worldwide, rather than selling
the licence for others to manufacture it in overseas markets.
The company has been talking to prospective manufacturers in France and South Africa.
"But now we potentially have a totally new export market," Mr Scandrett says.
There are 12,200ha of grapes planted in New Zealand and this coming season Botry-Zen hopes
3000-4000ha will use its biological control agent product to deal with botrytis.
Different areas are affected by botrytis to different degrees - high-pressure or low-pressure
botrytis - depending on the weather conditions, with varying amounts of spraying needed to
keep it under control.
Mr Scandrett joined Botry-Zen over a month ago after a 12-year career with the University of
Otago where he was involved in negotiating deals to commercialise IP created through
university research.
Botry-Zen is pushing ahead with plans to list the company next month.
After having a provisional licence to carry out trials, it is waiting on registration of
product under the Agricultural Compounds and Veterinary Medicines Act.
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19.02.02 - NZUM
The Chief Executive of Botry Zen, John Scandrett, has been issued 1,000,000 options in lieu
of part of his cash renumeration. The options are exercisable during the period from 7 March
2003 to 7 March 2007 at Mr Scandrett's discretion provided that the annualised returns to
shareholders from 7 February 2002 until the exercise date is greater than 10%. Each option
confers a right to be issued one Ordinary Share at an exercise price of 40c.
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Friday 17th August 2001 - NBR Personal Investor, By Chris Hutching
The Midas touch of South Island entrepreneur Howard Paterson was at work again when investors
sent cheques worth nearly $120 million for a $5 million share issue to float a biotechnology
company.
Mr Paterson confirmed yesterday all the cheques were genuine and had been cleared by the bank
but most of the money is being sent back, with the successful subscribers receiving about 4%
of what they applied for. Some investors sent in cheques for many millions of dollars.
The chosen few who received an allocation in Botry-Zen, which has developed an organic agent
to control botrytis in grapes, are mainly New Zealand investors but there are some overseas
interests whose involvement will be valuable when the company sets up international
distribution.
The shares, issued at 10c each, made their trading debut on the secondary board of the Stock
Exchange at 50c each before settling back to 33c mid-week.
Mr Paterson said, compared with some other floats, Botry-Zen offered a real product backed
with research from reputable organisations as well as the industry. Investors clearly had
made decisions based on the credibility and track record of the parties involved.
Another attraction for investors was the perception that when good looking floats came on the
market the sharebroking firms snapped them up while floats with lesser prospects tended to
get offloaded fairly quickly to clients.
Mr Paterson's modus operandi was also evident in the recent floats of Blis and A2 Corporation
owners of patents for health products that are still being developed. A select few investors
are invited to subscribe at 10c a share and, when share trading begins, the price tends to
skyrocket.
In the case of Blis a subsequent share issue for more working capital was made at 73c a share
and by the time the shares eventually listed on the main board of the Stock Exchange the
price soared to $2.20 before settling back to current prices at around 90c.
One of the people who helps Mr Paterson in his Dunedin office at the Edinburgh Trust (not a
registered company) is David Parker, who said only those who were invited to take part in the
initial issue of Botry-Zen received a scaled back allocation. But many more had sent in
cheques unsolicited in the hope they would receive a parcel.
Once they were trading on the market, prices were based on expectations about the potential
value of the intellectual property involved, he said.
"It's the track record of Howard and the Edinburgh Trust that drives these things. He has a
loyal group of colleagues and friends who can provide the necessary capital to help get
things off the ground. But buyers estimate what the potential is and discount it by about 90%
to arrive at what they think is a fair price for the shares," he said.
"In the case of Blis, we had the initial float and then a placement to institutions before
final Stock Exchange listing. The share price eventually settled back to about what it was
during the interim phase, which suggests to me that fair value had been factored in by those
institutions, who also give credibility that the company has potential.
"What's more difficult is to value these fledgling companies at the very start but we take
extreme care not to manipulate prices and instead let the free market reign."
Mr Parker said Botry-Zen's anti-fungal product for grape vines would reach the product
selling stage before Blis, which required more capital for further research and
commercialising the product.
"We have a lot of people come to us who own intellectual property because they want the
lowest risk outcome. Howard generally rejects nine out of 10 proposals and in the case of
Blis other people had a look at the proposal and turned it down," he said.
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Friday 27th July 2001 - NBR Personal Investor, by Chris Hutching
A third biotechnology company is being launched by Dunedin entrepreneur Howard Paterson at
the same time as his Blis Technology company is listed on the Stock Exchange.
Blis arrives on the local bourse on Monday and is commercialising research that prevents a
range of serious infections like streptococcal throat.
Another biotech company, A2 (NBR, July 20) is also due for listing soon.
The new company, which also has plans for eventual listing, is Botry-Zen and a prospectus
is in the process of being registered. A site has been bought in Dunedin for manufacturing
The key people are Mr Paterson and former University of Otago biology Professor Max
Shepherd, whose Dunedin company Zenith Technology Corporation conducts clinical trials and
develops, manufactures and markets animal health products.
The technology discovery is a biological control agent that prevents bunch rot in grapes.
This is a major problem for the wine industry, costing $18 million a year in sales and $12
million a year to control.
The disease is also known as noble rot and grey mould and is arguably the biggest disease
problem confronting the international wine industry.
One of the main attractions of Botry-Zen is that it is organic rather than chemical-based
and controls botrytis without affecting the plant.
The Wine Institute, which is a research partner in the venture, believes the cost savings
just to the local industry will be considerable and immediate.
Research was undertaken by HortResearch as part of the Winegrowers of New Zealand research
programme, which is jointly funded by the Wine Institute and the New Zealand Grapegrowers
Council.
It was facilitated by support from the Foundation of Science, Research and Technology,
through Technology New Zealand.
Laboratory tests and field trials by HortResearch have shown the biological control agent
is effective against Botrytis cinerea and successful field trials have been undertaken
between 1997 and 2000 in selected vineyards in Hawke's Bay, Gisborne and Marlborough.
The botrytis discovery may also help Mr Paterson with his development plans for 2000ha of
grape plantings in the Waitaki Valley east of Kurow. Trial plantings have begun.
Meanwhile, Blis recently raised $6 million from institutions, placing 8.25 million shares
at 73c each. The money will be used to develop Salivaricin B products and other
bacteria-fighting substances from the large group identified by Professor John Tagg, of
the University of Otago. The university is Blis' biggest single shareholder with 20%.
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