OTTAWA, ONTARIO, December 12, 2013 - Avivagen Inc. (TSXV:VIV), a wellness company developing and delivering products that support and enhance the health and quality of life of animals and the people who care for them, announces that a CEO update letter has been posted to its website, www.avivagen.com. We encourage you to visit our website to learn more about the company and for ease of reference, the contents of the CEO update letter have been re-produced, below.
Dear Shareholders,
It is my pleasure to provide a further update on the progress of our Company.
My update to you in June provided my impressions after three months as CEO: a great team, an exciting technology and substantial market opportunities. It also outlined the challenges that are inherent to building a successful life sciences business. In that update, I concluded by setting forth six goals. I believe we have made material progress on all of them:
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1.Support U.S. marketing of Oximunol(TM) Chewable Tablets by Bayer Animal Health. We have helped our partner in developing new materials to support its marketing of this product line. In evidence of this, a shipment of new Bayer-labelled product was delivered and accepted on November 13th. The rate of sales and re-ordering will now be determined by our partner's success in marketing this exciting canine health supplement to United States veterinarians.
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2.Launch a new direct-to-consumer canine product in the United States. In July, Avivagen took delivery of a first U.S. batch of its Vivamune(TM) Health Chews for large dogs. Since then, we have tested a print-based advertising campaign, tested internet marketing approaches and attended three pet-oriented expositions - to sample product and refine our direct sales messaging. We will expand our marketing commitment once we are satisfied our approach is optimal.
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3.Create further direct-to-consumer companion-animal products. In August, Avivagen took delivery of an initial batch of its second and third U.S. direct-to-consumer products; Vivamune(TM) Health Chews for Small Dogs and Vivamune(TM) Health Chews for Cats. These are now being test marketed alongside Vivamune(TM) Health Chews for Large Dogs.
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4.Generate initial food-animal product sales in selected international markets. In June and shortly after our first shareholder update, we announced our first commercial sale of OxC-beta: within the Kingdom of Thailand, where we have approval for commercial use. Work is now advancing on registering OxC-beta for sale in other Asian nations. We aim to announce such registrations when they are completed and as local distribution arrangements are finalized.
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5.Undertake business development activities for current and new products. Since June, we have created relationships with potential OxC-beta customers across Asia: in countries with large livestock industries, including Thailand and five other nations. Consequently, we expect that OxC-beta will soon be tested in multiple customer-driven food animal studies - in both aquatic and terrestrial livestock species. Should the results of one or more of such studies be as targeted, we believe there is the potential for material sales of OxC-beta for livestock in 2014.
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6.Communicate progress on the above to all of our stakeholders. We believe in building credibility with stakeholders and proving our seriousness with real achievements. This process started with clearing legacy liabilities and building our base of shareholders' equity. We are now proceeding to generate further proof of the utility of our product - by way of our business development activities and by publishing peer-reviewed scientific articles. As specific facts about those initiatives become available to communicate through 2014, we are committed to work with the media to maximize investor awareness of our achievements.
Of the matters outlined above, I'd like to highlight our work in Asian markets. It is important, as it has the potential to jump-start the revenues of our Company. The six countries in which we have built relationships have a combined population of approximately 1.7 billion people. This is around fifty (50) times the population of Canada, and their livestock markets are, in some cases, much larger than their populations suggest due to a focus on exports. While we cannot go into the business of forecasting future sales, our choice of geographies, species and trial designs are all directed to providing the best possible probabilities of material success for OxC-beta. When we receive customer test results, registrations and product orders, we will disclose it to the greatest appropriate extent.
It is important to recognize that such success is not built overnight: we are dealing with sophisticated livestock and feed producers who need to see real results and benefits from their adoption of OxC-beta. This requires us to engage with them to develop product-usage protocols in their species of interest and demonstrate our commitment to customer service. Our staff and outside collaborators are working intensively at such matters, which are vital to making a commercial success of our technology.
Demonstration of staying-power is also important to such livestock customers. We therefore undertook steps to strengthen our financial position over these past months. While this update is being written prior to the release of our October 31 results, our balance sheet has been dramatically strengthened. Review of our draft fiscal year-end financials show that our working capital and shareholders' equity have each been improved on a year-over-year basis: with the addition of the new equity from our financing this fall, Avivagen can better demonstrate stability to customers, suppliers, staff and investors and is in a stronger position to fund scale-up of production and sales.
While no management can perfectly ensure the successful commercialization of a technology, we believe we are providing OxC-beta the right positioning to become a big winner:
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- In companion animals, we have multiple products and marketing channels in the United States - the world's largest consumer market.
- For livestock, relationships with leading companies in some of the world's largest livestock production markets and for the most commercially important species.
- We have also secured capital needed to execute our stated corporate strategies.
With our company's position now stronger than ever, we expect 2014 to be a pivotal year for Avivagen.
We remain committed to developing Avivagen into a pre-eminent creator of products for companion and food animals. We are realizing that goal by developing internal skills for validating product applications, creating commercially-viable product formulations and managing supply and fulfillment logistics. Using this model, we intend to build exceptional value for our shareholders.
I look forward to providing updates about the above matters and believe our work towards achieving our corporate objectives will soon be reflected in the market value of our Company.
Thank you for being a shareholder of Avivagen, for taking the time to read this update and for your continuing support for our efforts.
Sincerely,
[Signed]
Cameron Groome
CEO & President
Avivagen Inc.
About Avivagen Inc.
Avivagen Inc. is a publicly-listed life sciences company trading on the TSX Venture Exchange under the ticker symbol "VIV". The Company's goal is to develop and deliver scientifically-proven solutions that can truly benefit companion and food animals by taking advantage of natural mechanisms for maintaining optimal health. Avivagen's targeted markets include Pet Wellness and Livestock Productivity.
The company has sites located in partnership facilities of the National Research Council of Canada (NRC) - in Ottawa, Ontario and Charlottetown, Prince Edward Island.
More information can be found at www.avivagen.com.
About OxC-beta
Avivagen's proprietary and patent-protected technology supports the body's own systems to maintain and enhance health, particularly by supporting immune function. Avivagen's commercial-stage application of its technology is Fully-Oxidized beta-Carotene (OxC-beta).
OxC-beta compounds occur naturally as carotenoid oxidation products in vegetation, but in minute amounts. They have been developed to support the health of companion animals and for use in the global food animal market.
Research results indicate OxC-beta helps support immune function, which can result in meaningful overall health benefits. In pets, benefits are seen in overall vitality and energy, skin, coat and gastrointestinal wellness. Food Animal benefits include healthier growth, better utilization of feed and decreased mortality. In Food Animals, it is intended that use of OxC-beta avoids the feeding of antibiotics.
The commercial products of Avivagen are Oximunol(TM) Chewables and OxC-beta for livestock.
About Oximunol(TM) Chewables - "Optimized Health in a Chewable Tablet"
Oximunol(TM) Chewables is a scientifically-formulated chewable tablet that contains Avivagen's proprietary, patented active ingredient OxC-beta. Oximunol(TM) Chewables are currently available for dogs of all ages in the United States, working with a dog's own immune system to optimize overall health and well-being.
About OxC-beta for Livestock
OxC-beta for Livestock is available as a 10% pre-mix sold in 1.0 or 5.0 Kg quantities for parts-per-million addition to animal feeds, in accordance with producer-developed protocols. In past studies, OxC-beta has been shown to have health and growth benefits in species such as chickens and pigs.
Forward Looking Statements
This news release includes certain forward-looking statements that are based upon current expectations, which involve risks and uncertainties associated with the business of Avivagen Inc. and the environment in which the business operates. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "will", "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions. The forward-looking statements reflect the current expectations of Avivagen Inc. regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Avivagen assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
For more information:
Avivagen Inc.
Cameron Groome
CEO & President
c.groome@avivagen.com
100 Sussex Drive
Ottawa, Ontario
Canada K1A 0R6
Head Office Phone: 613-949-8164
Website: www.avivagen.com