EZZ Life Science transforms from distributor to integrated producer of genomic health products

Recently listed EZZ Life Science Holdings (ASX: EZZ) has unveiled the four-pronged business strategy that is enabling it to transform to a fully integrated life science company focused on genomic health.

Genomics is the study of genes and other information within an individual’s genome – in other words, the complete set of instructions contained in a person’s DNA.

EZZ is dedicated to using genomic research and development to address four key human health challenges: longevity, weight management, the human papillomavirus (HPV) and the digestive bacterial infection helicobacter pylori.

In its latest annual report, the company has outlined four primary strategies to be executed in parallel: the establishment of in-house manufacturing capabilities; further investment in genomics-based research and development; enhancement of its technological platform to support ecommerce and data analytics; and a sales and marketing strategy focused on strengthening brand awareness and expanding both distribution and direct-to-consumer channels.

According to EZZ acting chief executive officer and co-founder Mark Q, the new integrated approach is expected to generate sustainable growth for the company and build on the strong results it has achieved in the last 12 months.

Transformation from distributor to producer

Since 2020, the company has started adding its own brand of health and wellness products with a focus on longevity and weight management. The supplements range has been sold via multiple ecommerce platforms in China.

As an agile business, EZZ has a history of successful business transformation.

“EZZ continues evolving and optimising its business model, integrating scientific research supported by additional ecommerce technology and a GMP-certified in-house manufacturing facility,” Mark told Small Caps.

“The transition is expected to bring numerous strategic benefits including faster product innovation, improved production adaptability and scale efficiency,” he added.

In-house manufacturing facility

EZZ currently outsources its manufacturing through a third party in Australia, but a large aspect of its integration plan is to start manufacturing its products in-house.

“We have a three-to-five-year plan, so we hope to own a facility by 2024 – but possibly in the next year,” Mark said.

The company listed on the ASX earlier this year after raising $6 million in an initial public offering (IPO) with the majority of funds earmarked for its proposed manufacturing facility, as well as additional market expansion.

“Having our own manufacturing facility will bring more flexibility and production efficiency,” Mark added.

Research and development

EZZ also plans to invest heavily in research and development to differentiate the business and its products from others in the market.

The company already has relationships with universities including the Auckland University of Technology in New Zealand, where it is currently conducting research focused on longevity and HPV.

“We plan to potentially engage other institutions to address our other two focus areas of weight management and helicobacter pylori,” Mark said.

Along with product development, the company is considering the development of diagnostic devices or services. The objective would be for consumers to be able to undertake their own tests to determine their needs for nutrition.

“Genomics is a fast-growing sector and EZZ is deepening its strategic focus to better service obvious gaps in this area,” Mark said.

Enhancing its technology platform

EZZ is working on enhancing its technological capabilities to integrate an ecommerce platform into the business.

“Our online store, which will sell direct to consumers from EZZ’s website, should be running by the end of this year,” Mark said.

The platform will be accessible via PC, mobile or an app which will also incorporate technology to assist with data analysis.

“Adding new technology layers will unlock significant growth potential across our global operations,” he added.

Sales and marketing and market expansion

In addition to establishing its own ecommerce platform, EZZ plans to continue selling its products through distribution channels which have already proven successful for the company including TMall Global in China and Costco retail outlets in Australia.

Leveraging on its established business relations in Australia and New Zealand, the company plans to develop new distribution channels for its EZZ branded products in pharmacies and supermarkets, as well as direct-to-consumer channels through third party ecommerce platforms.

EZZ’s international sales and marketing strategy involves strengthening brand awareness in China, expanding online and off-line distribution channels in South East Asian markets and then expanding to North America and Europe via major ecommerce platforms such as Amazon.

“South East Asia would be the focus of growth in the next 12 months but having said that, the domestic markets including Australia and New Zealand has always been one of their focuses,” Mark said.

Building on EZZ’s strong financial performance

In its FY2021 full year accounts, EZZ reported a 29% increase in revenue to $22.3 million with its own branded products accounting for more than half of this volume.

This was a substantial leap from the products’ 5% revenue contribution in FY2020 and signified a step change in the company’s focus from distributor to brand owner.

This strong overall performance has also enabled EZZ to declare its maiden dividend for the FY2021 full year of $0.45 per share, to be paid on 16 December.

“We’ve proven our ability to bring new products to market and are bullish about the further value-generative opportunities we can access in the life science space by focusing on genomics,” Mark said.