Canadian Institut Rosell agrees probiotic deal with Probi

22-Dec-2010 - Last updated on 22-Dec-2010 at 14:34 GMT

The gut feeling is good between Probi and Institut Rosell as they extend probiotic link

French Canadian company Institut Rosell has agreed a seven-year partnership with Swedish probiotic research and the development firm Probi covering dietary supplements based on its bacterial Lp299v strain.

A spokesman for Probi told NutraIngredients-USA: “The former agreement was coming towards an end. Both parties saw the opportunity to continue growing the business. Rosell will continue to manufacture the products and Probi and Rosell will both drive business development of the product in parallel.”

Michael Oredsson, CEO of Probi, said: "Dietary supplements is our fastest growing business area and is very important to us. The new agreement with Institut Rosell secures existing revenues and will lead to higher revenue and increased profitability in markets where we already cooperate. At the same time, Probi will be able engage directly with distributors or launch Lp299v supplements direct to consumer in a number of key markets.”

Dietary supplements

The new agreement will allow Probi to enter into direct distribution agreements or launch dietary supplements for gut health in regions not covered by Institut Rosell’s exclusivity. This includes the rights to launch Lp299v supplements in China, India and South Africa on a non-exclusive basis.

Institut Rosell will retain exclusive license rights to existing markets Canada, large parts of South America and some distribution channels in USA, France, Spain, Greece and Benelux countries.

The new agreement gives the French Canadian company the right to continue manufacturing capsules based on Probi’s strain Lp299v.

Probi predicted that the agreement is expected to boost the firm’s profit in the second quarter of 2011 and secure its existing license revenues over a longer period.

“The most important benefits for Probi are: Secures existing license revenues over a long term, Probi’s product margins will be improved and supply of a high quality product at competitive pricing is secured,” according to a company statement from Probi.

20 percent of turnover

The new agreement replaces the previous seven-year old agreement with Institut Rosell which, according to Probi, is the basis of about 20 percent of its turnover.

The probiotic bacteria Lp299v has been shown in clinical trials to help people suffering from symptoms associated with Irritable Bowel Syndrome (IBS), which include diarrhea, constipation and abdominal cramps. IBS affects up to 55m Americans.

The US probiotic dietary supplement market is valued at about $500m annually and significant further growth is expected.

Meanwhile, earlier this month, Probi has signed a distribution agreement giving Alapis Group the right to sell Probi’s dietary supplement for immune health in Greece and Cyprus.

The product will be launched under Alapis international probiotic brand, which currently carries two products. Probi will start shipments in the second quarter of next year.