Algae.Tec looks to bulk up product reach with Radient research agreement

Health company Algae.Tec (ASX: AEB) has pleased its shareholders by announcing a research agreement with Radient Technologies Inc, a Canadian Venture 50 company based in Edmonton, Alberta.

Under the agreement, Algae.Tec will utilise Radient’s “microwave-assisted” extraction technology as the final step in the production of its high-value algae-based products.

Algae.Tec intends to supply the rapidly growing global nutraceutical market which is forecast to reach US$578 billion by 2025 and currently growing at around 8.8% per year, according to statistics obtained from Grand View Research.

As part of its commercial strategy, the emergent health company acquired a 20% stake in Australian pharmaceutical company NS Technologies in February this year.

Merely two years ago, the global nutraceuticals market size was valued at US$272 billion but the growing incidence of diseases such as high blood pressure, obesity, diabetes and excess cholesterol is fuelling product demand.

The prohibitively high cost of chemical-based healthcare treatments has resulted in rising consumer interest in nutraceuticals over the past few years with companies such as Algae.Tec and Radient coming to the fore to capitalise on the consumer-led shift in demand preferences.

Focusing on purity and cost-efficiency

A key focus of the research agreement signed by the two companies will be on the extraction of high-quality lipid content from Algae.Tec’s algae powders, with initial algae samples “already being shipped” to Radient’s state-of-the-art 20,000-square-foot manufacturing plant in Edmonton, Canada.

Radient says its MAP technology can “selectively deposit microwave energy into a biomass and heat the target elements while leaving other materials unaltered”. The positive effects of its technology include shorter processing times, higher purity and less energy wasted.

The near-instantaneous “in-core” heating created by the MAP process creates pressure that drives out the target compound “exceedingly faster than conventional extraction methods”, according to Radient.

First results from this extraction testing are expected to be received later this year in the third quarter, according to Algae.Tec.

Technology sprawl

Over the past decade, Radient has developed a novel method of expanding existing product yields.

According to the Canadian company, its proprietary ‘microwave-assisted processing’ (MAP) technology can cost-effectively increase the yield and consistency of the active ingredients from plants such as lipids and proteins, including algae.

In a recent case study, the Canadian company was able to increase the recovery rate of phenolics from green tea by 50%, reduced the extraction time by 92% and raised margins by 22% for a beverage company.

In a separate case, Radient managed to increase alkaloid yields from centella plants by 200% and raised purity by 150% for a multinational cosmetics company.

Radient’s progressive tech-enabled feats and achievements have attracted the attention of Algae.Tec developers who see several potential synergies between the two companies – to be developed as part of the signed agreement.

“This is a significant partnership for Algae.Tec as it will enable us to leverage Radiant’s superior extraction technology, and it represents one of the final steps in the production of a variety of products for the high-end nutraceuticals market,” said Mr Mal James, executive chairman and managing director of Algae.Tec.

“The global nutraceuticals market provides a compelling opportunity for the business and we look forward to providing our shareholders with the outcomes of this first round of extraction testing this quarter,” added Mr James.

The news had an immediate impact on Algae.Tec shares which rose 7%.