San Diego-based Verenium is going into a strategic collaboration with Novus International, a St. Louis, MO-based maker of animal nutrition and health products.
The partners plan to jointly develop and commercialize a series of enzymes from Verenium’s late-stage product pipeline for use in global livestock, poultry, aquaculture, and companion (pet) markets.
The deal represents one piece of the strategy that Verenium CEO James Levine outlined for me in March.
Novus will pay Verenium $2.5 million in license payments on signing, and $2.5 million following what the companies call “regulatory filings or commercial activity.”
While that might not seem like a big deal, Levine says Verenium and Novus will partner equally to fund development and commercialization, and they plan to share 50-50 in the profits.
It’s also just one part of a bigger picture for Verenium. In its previous incarnation as Diversa, the company amassed billions of enzymes collected from organisms thriving in extreme climates and places, from deep sea thermal vents to Arctic tundra.
Verenium wants to be a broad-based enzyme company, where animal nutrition is only about 10-15% of the overall industrial enzyme market, according to Levine.
In addition to animal health and nutrition, Verenium has focused on developing enzymes for grain processing (into biofuels or beverage alcohols) and oil seed processing for edible oils.
In the oil seed market Verenium has the only enzyme product used to make soybean crushing more efficient, which Levine describes as a $300 million market opportunity.
The company, which officially relocated its headquarters from Cambridge, MA, to San Diego, CA, on June 1, generates nearly all of its current revenue from three market segments: animal health and nutrition, grain processing, and oil seed processing.
In 2010, Verenium’s sales in those three markets amounted to slightly over $50 million, but Levine said he sees tremendous opportunity for Verenium in the $3.3 billion overall global market for industrial enzymes.