2016-11-14 09:47 ET - News Release
Mr. Cameron Groome reports
AVIVAGEN ANNOUNCES AGREEMENT TO FORM CHINESE JOINT VENTURE TO COMMERCIALIZE OXC-BETALIVESTOCK
Avivagen Inc. has signed an agreement with Shaanxi Jintai Mining Co. Ltd., a widely diversified Chinese company, to form a joint venture to commercialize OxC-beta livestock in the People's Republic of China.
The agreement will create a China-Canada joint venture company ("JV") based in the city of Xi'an, Shaanxi Province. The purpose of the JV is to register and commercialize OxC-beta(TM) Livestock ("OxC-beta") in China, initially for use in poultry and swine and with an option for use in cattle and goats (bovines and caprines). The JV will be owned 51% by Jintai and 49% by Avivagen, with equal representation on the board of directors and joint decision-making. The agreement specifies that Jintai will invest up to RMB 6.0 million ( ~ C$1.2 million) into the JV to fund activities relating to the registration and commercialization of OxC-beta in China.
The agreement is substantially consistent with the non-binding term sheet between the parties that was announced by Avivagen on April 14, 2016. The JV will seek approval to market OxC-beta in China, although there is no assurance that it will receive such approval. The parties also expect the JV to enter into an exclusive distribution and supply agreement with Avivagen. Mr. Shen Xiaobo, President of Jintai, spoke about the JV's objectives, "China's National Action Plan to Contain Antimicrobial Resistance of August 26th expresses concerns about the use of antibiotics in livestock production. Jintai believes that OxC-beta offers an optimal alternative to in-feed antibiotics and should enable a material reduction in their use - now estimated at 100,000 tonnes per year in China. Jintai is proud to be pursuing this goal with Avivagen."
Cameron Groome, CEO & President of Avivagen, added, "Avivagen and its collaborators have now successfully completed 13 trials of OxC-beta in broiler poultry and swine. We now look forward to completing registration-oriented trials for these two species in China. Approximately 180 million tonnes of livestock feed are consumed in China each year, making this a large opportunity for Avivagen and Jintai to benefit both society and their shareholders."
About China and Jintai
Jintai is a private diversified company active in mining, engineering, materials and construction, utilities, textiles, electronics, auto parts, property management and investment management. Jintai is based in Xi'an, the home of one of China's leading agricultural universities (Northwest A&F). Its corporate values include sincerity, professionalism, innovation and working to establish win-win business ventures.
China is said to be the world's largest market for formulated feeds, using an estimated 180 million tonnes in 2015. The species initially targeted by the JV, swine, broiler poultry and layer hens, are estimated to consume 84% of that feed. Animal counts are estimated to be 500 million swine, eight billion broilers and two billion layers, raised in many of China's provinces and autonomous zones, including Shaanxi.
Avivagen Inc. is a life sciences company that has develop ed a scientifically-proven product for replacing antibiotics in livestock feeds and to otherwise benefit human and animal health. Avivagen is based in partnership facilities of the National Research Council of Canada (NRC) - in Ottawa, Ontario and Charlottetown, Prince Edward Island. For more information, visit www.avivagen.com .
About OxC-beta(TM) Livestock
OxC-beta(TM) Livestock ("OxC-beta") is a proprietary product demonstrated to be effective and economic in replacing the antibiotics commonly added to livestock feeds. OxC-beta is derived from Avivagen discoveries about the properties of carotenoids, the compounds that give certain fruits and vegetables their bright colors. Comprised of fully-oxidized beta-carotene, OxC-beta is a non-antibiotic means of maintaining optimal health and growth in livestock animals such as swine and poultry. OxC-beta(TM) Livestock is currently registered and available for sale in the Philippines, Taiwan and Thailand.
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