published on September 23, 2016 - 1:27 AM
Written by The Business Journal Staff

Fresno-based Integrated Animal Nutrition and Health has signed a potentially lucrative agreement to supply Chinese farmers with a botanical extract used to treat gastrointestinal issues in dairy cattle and pigs.

The Fresno firm inked the distribution deal this month with Jaguar Animal Health, a Bay Area-based company focused on developing and commercializing gastrointestinal products for companion and production animals.
 The agreement followed positive results, which Jaguar announced this past July, of two studies to evaluate the safety and effectiveness of the Croton lechleri botanical extract in piglets.

Croton lechleri, known as sangre de grado — dragon’s blood — in Spanish, is a species of flowering plant in the spurge family and is native to northwestern South America.

Dr. Kai Hang Chen, founder and CEO of Integrated Animal Nutrition and Health, said he first learned about Croton lechleri “about two years ago” through a doctor at Cornell University.

“I became very interested because neonatal diarrhea is a major issue for dairy and swine,” said Chen. “The problem is [even] worse in China than the U.S. due to poorer hygiene and lack of vaccination.”

At dairies in China, Chen said it’s “very common to see calf diarrhea of 30 to 50 percent and mortality rates of 10 to 30 percent. In swine, the diarrhea rate averages about 10 percent and the mortality rate runs about 30 percent — despite heavy antibiotic usage,” he added.

After first learning about Jaguar’s work with the extract, Chen said he did further “investigation into the product” and worked with various clients to run field trials.

“The results from the trials confirms the beneficial effects on neonatal diarrhea, which gave me the confidence in the product,” he said. “I believe it will give tremendous benefit to our clients in China.”

The terms of Chen’s agreement with Jaguar specify annual minimum purchase amounts necessary to maintain exclusive rights to the proprietary product.

Under the terms of the agreement, Chen is responsible for all costs necessary to obtain required product registrations, marketing authorizations and customs clearances for the Chinese market.

The piglet studies that spurred the deal were sponsored by Integrated Animal Nutrition and Health and involved more than 1,000 animals. The study, Chen said, took place earlier this year at a number of pig farms in China.
The encouraging results showed resolution and cure rates ranging from 60 to 99 percent, according to study organizers, who believe the botanical extract is very effective at controlling outbreaks of diarrhea.

 “We have seen great interest in Jaguar’s Croton lechleri botanical extract in China and believe that the market potential for the product is substantial,” said Chen, who is known to his American colleagues as Walter.

Born and raised in China, today Chen spends half of his time in the U.S. and half in China. He has an undergraduate degree from Southern China Agricultural University and Master’s and Ph.D. degrees from the University of Arizona.

Chen and another Chinese colleague established Animal Nutrition and Health strictly to export Jaguar’s product. “We don’t have an office yet in Fresno,” Chen said. “The purpose of setting up the company is to find good products or technologies and export [them] to China.”

Chen’s Beijing-based Kai Hang Management Consulting Co. Ltd. includes 10 full-time Chinese employees, who cover several dozen dairies and nearly 350,000 cows in China, including the Mengniu Fuyuan Dairy Group with 45,000 cows and the 88,000-cow Yili Youran Dairy Group.

“My U.S. dairy experience is very important to me,” Chen said. “Even though there are differences in climates, feed and feed quality in China, there are a lot of similarities, such as facilities, milking equipment and feeding practices. My goal is to help my clients make the right decisions on a day-to-day basis.”

Recently profiled in Progressive Dairymen, Chen said he relies heavily on technology to maintain contact with his Chinese staff while he’s stateside two weeks each month.

“While I am at home [in California], I work with my team and my clients through WeChat, email, phone calls or Ding Ding, a mobile-based app,” he said. “It seems to be working well.”

 Lisa Conte, Jaguar’s president and CEO, called the supply and distribution agreement with Animal Nutrition and Health a good deal for both companies.

“We are very happy about the opportunity to leverage our first-in-class technology in this very important Chinese market,” Conte said. “As we work to expand our commercialization efforts, we intend to seek out additional opportunities to enter key international markets.”

 Based in San Francisco, Jaguar Animal Health is focused on developing and commercializing first-in-class gastrointestinal products for companion and production animals, foals and high value horses.

Jaguar’s lead prescription drug product candidate, Canalevia, is aimed at treating diarrhea in dogs. Jaguar is also developing a prescription drug, SB-300, to treat gastrointestinal ulcers in horses.

Both Canalevia and SB-300 contain ingredients isolated and purified from the Croton lechleri tree, which Conte said is sustainably harvested.

Neonorm Calf and Neonorm Foal are the company’s lead non-prescription products.

Neonorm is a standardized botanical extract also derived from the Croton lechleri tree.

Jaguar currently has nine active investigational new animal drug applications filed with the FDA and Conte said the company intends to develop “species-specific” formulations of Neonorm in six additional target species, formulations of SB-300 in horses and Canalevia for cats and dogs.

“Given the limited therapeutic options available to many animals, we believe that collaborations across the animal healthcare ecosystem are important to accelerating the pace of innovation,” the company states on its website.

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