Companies to watch: the stories behind five impressive companies serving the dietary supplement and functional food businesses.

Bionorica: Innovation Will Come From Science

Bionorica LLC, San Clemente, CA, is a subsidiary of Bionorica AG, a 75-year-old pharmaceutical company based in Neumarkt, Germany, which produces a range of botanically based medicines. Founded by Josef Popp, grandfather of the current CEO, professor Michael Popp, the company remains a family-owned business to this day. Growing in the double-digits for the last several years, Bionorica AG posted sales of [euro]130 million in 2008.

Bionorica's products are approved as herbal medicines in Europe based on clinical trial evidence of their safety and efficacy in children, ages two through 12, and adults. In fact, most of its products have been the subject of multiple randomized, double-blind, placebo-controlled studies.

Its flagship brand, Sinupret (for sinus/upper respiratory support) is more than seven decades old and still going strong in Europe and many other parts of the world. Sinupret contains a proprietary blend of European elder, common sorrel, cowslip, European vervain and gentian. It has been through several double-blind, placebo-controlled studies with thousands of subjects. It has even gone head-to-head in studies with competing products.

Given its reputation in the world market, Bionorica AG decided to expand its reach across the Atlantic about five years ago. "Being the single largest market in the world, the U.S. had been on our minds for quite some time," said Wolf Aulenbacher, president and CEO, Bionorica LLC." We had humble beginnings in 2004, establishing a small office in Oregon to target holistic health practitioners. After we moved to California in 2007 we achieved distribution in the mass market. My specific goal for this year is to go after the natural foods channel."

Containing all botanical active ingredients, the Bionorica products sold in the U.S. are considered dietary supplements according to the Dietary Supplement Health and Education Act (DSHEA). Last year Sinupret for Kids became a sensation when an FDA panel recommended a ban on hundreds of OTC cough/cold products for children under the age of six due to lack of proof and safety. A unique botanical dietary supplement in the U.S., Sinupret has a solid research portfolio that makes it ideal for parents concerned about finding new ways to support healthy respiratory, immune system and sinus function.

To help ascertain the changing nature of the American marketplace, Bionorica LLC recently commissioned a study conducted by Harris Interactive in March to take the pulse of consumers regarding OTC medicines and natural remedies. According to the results, the company still has a way to go to educate consumers and physicians about the respiratory, immune system and sinus function support that Sinupret provides. The study found only 46% of parents to be "very knowledgeable" about the dangers of current OTC cough and cold products for children. And while 77% of consumers consider themselves "somewhat knowledgeable" about the possible benefits of natural remedies, only 28% actually turn that into product purchases.

Sinupret happens to be the most prescribed product by European pediatricians. "They are very interested in the product because of the amount of literature supporting it," said Harel Seidenwerg, MD, head of corporate communications, Bionorica AG. "Because we are recognized as a safe, effective natural remedy, we have very good connections with doctors worldwide. We continue to keep very close relationships with healthcare professionals because they are the future."

Motivated by the recent impressive performance of Sinupret for Kids, Bionorica LLC hopes to launch some of its other herbal evidence-based products in the U.S. in 2009. Armed with significant science, the company hopes these products will offer a similar degree of success.

Concerning the company's future in the U.S., Dr. Seidenwerg is optimistic. "I think there's a great future for researched dietary supplements in the U.S. We hope long-term there will be legislative recognition of clinical evidence that might open up some additional claims channels."

On the horizon, Dr. Seidenwerg said, "I see dietary supplements becoming more science-based--the new cGMPs are designed to put everyone on that road. I also see more mainstream doctors coming to our camp in the U.S., like in all other countries of the world. For these and many other reasons, I see more steady growth ahead because these products are viewed as true alternatives. Ultimately, I hope someday there will be general international acceptance of phytopharmaceuticals."

Brassica Protection Products: Harnessing the Benefits of Broccoli

A little more than a decade ago, researchers Paul Talalay, MD, and Jed Fahey, ScD, made a crucial discovery about cruciferous vegetables: age does matter--at least as it pertains to their beneficial compounds. For broccoli in particular, they found that mature varieties are highly variable in their antioxidant capacity. However, for younger broccoli plants, such as broccoli sprouts, the researchers uncovered a more consistent level of potency.

Brassica Protection Products, Baltimore, MD, was borne out of this research, conducted at Johns Hopkins University during the 1990s. At that time, Dr. Talalay was busy exploring the cancer-fighting power of certain compounds found in cruciferous vegetables when he and Dr. Fahey identified a powerful compound called sulforaphane glucosinolate, or SGS.

On a mission to grow the perfect broccoli sprouts, Dr. Talalay and others searched for the variety with the most consistent amounts of SGS. The most important part of SGS' capabilities is its ability to stimulate the body's natural antioxidant detoxification system. As an indirect antioxidant, SGS has the ability to protect the body for up to 72 hours, significantly longer than some vitamins like C and E.

Armed with mountains of evidence and extensive intellectual property exclusively licensed from Johns Hopkins, Dr. Talalay engaged his son, Tony Talalay, current CEO, to join the crusade for extolling the virtues of broccoli sprouts and SGS. The goal was to provide broccoli sprouts with consistently high concentrations of SGS, but that wasn't easy. Testing scores of seeds showed that only a handful contained consistently high concentrations of SGS. As not all broccoli seeds are the same, not all broccoli sprouts are the same. In fact, BroccoSprouts from Brassica typically contain more than twice the amount of SGS as other commercial broccoli sprouts. Further, according to the company, it is the only product in the produce section grown specifically to provide a precise level of a phytochemical.

With food safety top of mind for many consumers today, it may be reassuring to know that Brassica employs an exhaustive set of tests to make sure all of its BroccoSprouts broccoli sprouts are fit for consumption. More specifically, it utilizes several quality and safety procedures at all of its growing facilities. On top of its GMP and HACCP programs, it employs FDA-designated seed sanitation and "hold for release" testing, procedures that are critical for food safety. Before harvesting, the sprouts are tested for E. coli and salmonella and then held until negative tests are confirmed.

So why such a complex system for broccoli sprouts? "It quickly became clear in growing broccoli sprouts that there were some issues with microbial contamination and we didn't want to go from marketing a healthy product to worrying about making people sick," said Mr. Talalay. "We believe we have resolved these issues by working with all of our growers and FDA to develop a program for safer sprout production."

Offering some insight on his involvement in the business, Mr. Talalay explained, "My background is in consumer marketing, advertising and consumer communications, and I had worked extensively on foods and beverages, which was helpful at the time. When my dad and Jed came up with the idea of BroccoSprouts they had no idea how to get it to market, so I slowly, gingerly stepped into the picture to help them write a business plan. However, it was never my intention to stick around and be part of the 'family' business."

So what convinced him to stay? "Nothing annoyed my dad more than seeing other broccoli sprout products with little or no protective content being sold to the consumer," he said. "So my mission was to bring this to market with quality and integrity that mirrored the research. "Today, BroccoSprouts are very successful in Japan and licensed in many parts of the world.

It's been more than 10 years since Mr. Talalay assumed the CEO role and he says he's enjoying running the Brassica business and has big plans for the future. "Initially the scientific focus was on how these components could protect the body from cancer. Today we are concentrating as well on its anti-inflammatory, anti-bacterial and antioxidant properties and how controlling these influential factors can help protect against much chronic disease."

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Mr. Talalay said the company is also looking at the ingredient market. "From the beginning we knew you could take this compound as a stable extract, so we started in 2000 making natural water extracts of seeds/sprouts into powders that contained 6% active ingredient. Eventually, we developed the know-how and technology around the extraction and found it to be an ideal ingredient for dietary supplements and functional foods," he said. "We initially took this into the tea business and decided to make the product ourselves."

While Brassica Tea had very good early success, according to Mr. Talalay, he soon realized the company couldn't handle the mechanics of managing a consumer product. "Without huge marketing resources, we lost most of our retail distribution and now sell it mainly through the web, although it is available in Wegmans stores," he said. "We are happy to keep it around, but it has evolved into more of a demonstration product than anything else."

Two years ago, Brassica became more aggressive in supplying these ingredients to the supplement sector, first working with Xymogen in the health practitioner market. The company has developed a supplement ingredient that delivers 12-13% SGS. Mr. Talalay offered, "We are now launching our new high potency SGS extract, available for use in foods and supplements. We are also in the development stage with several food companies around the world."

In the end, Mr. Talalay admitted, "I don't know if we'll make a lot of money from this, but for us money is not the primary goal. My father is a world-class scientist who is still in the lab at age 86. It only takes one bad thing to ruin a 60-year reputation, so it is very important to us to maintain the integrity of this business now and in the future."

Brudy Technology: Looking at DHA in a Whole New Way

Brudy Technology, Barcelona, Spain, is a research and development company founded in 1999 to create innovative technologies for the food, pharmaceutical and nutraceurical sectors. At the helm is Francesc Gasso, managing director, who's been researching novel health ingredients for the last several years.

Brudy's strengths lie in helping companies generate totally new products for market niches yet to be discovered. One of its major areas of focus is polyunsaturated fatty acids. In the 1990s it generated some success and recognition by using omega 3 fatty acids in food products, specifically industrial pastry and eggs. The latter development resulted in a strong relationship with a company called OmegaTech, a company based in the U.S. Under the Gold Circle Farms brand, OmegaTech marketed a line of DHA-enriched eggs, and is credited by some experts as being one of the first successful functional foods.

Since that breakthrough, Brudy has taken its research in omega 3s, particularly DHA, a step further. After investing [euro]10 million over a period of eight years in research and development, the company has come up with a DHA molecule that features an impressive nutritional profile and superior bioavailability to other forms on the market. It calls the ingredient Algatrium.

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Mr. Gasso explained the complexities and benefits of this DHA molecule." Omega fatty acids found in nature are always found on a triglyceride (TG) backbone. Off the TG backbone are combinations of omegas (e.g., EPA DHA). Typical sources consumed by humans include marine (e.g., fish) and vegetable sources (e.g., plants, algae). The concentration of DHA is normally on the extreme positions of the TG backbone. More specifically, DHA is typically found on the 1 and 3 positions in these sources," he said. "In human breast milk, the DHA is heavily concentrated in the number 2 position on the TG backbone and less so in/on the 1 and 3 position. This means our metabolic process cleaves the omegas and rearranges them to a more usable (bioavailable) formation.

"Brudy uses a unique and natural enzyme technology to perform essentially what our body does naturally in rearranging the DHA to a much higher concentration to the number 2 position," Mr. Gasso continued. "In this manner, we are (naturally) preparing the Algatrium DHA (outside the body) to be a more bioavailable and arguably more potent source of DHA."

To support this theory, Mr. Gasso said there are two university clinical trials and a half-dozen in vitro trials that support the theory of greater bioavailability and potency of Algatrium, second position, DHA.

Interestingly, Brudy's technology can be applied to DHA from algae or flax. The more DHA present, the greater efficiency and commercial viability. What this demonstrates, Mr. Gasso noted, is that the process technology is presently more important than the source of the raw material.

Algatrium has another important feature: a strong antioxidant capacity. According to the company, it protects cell membranes and DNA from oxidation by free radicals by increasing intracellular concentration of glutathione, one of the most important antioxidants in the body.

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Research is also very important to Brudy. With more than 300 subjects in human trials, it is currently researching the potential benefits of DHA on several serious health conditions.

Brudy is offering Algatrium in both the European and North American markets. Currently it is represented by Xsto Solutions, Morristown, NJ, in the North American market. With several patents issued and more to be published soon, the company continues to leverage its proprietary technology to create new and better DHA preparations. "Brudy keeps a close eye on the bottom line and has remained profitable throughout its 10-year existence. This allows us to focus on our long-term goals rather than adjusting constantly to attract investors or meet short-term investment goals," said Mr. Gasso. "We feel that we have identified a unique solution or link in omega fatty acid nutrition that no one else has been able to see."

So how does the company feel about its position in the market? "At Brudy we have learned you don't have to be big to be successful. Being creative in how you approach challenges and opportunities is more important than size, "Mr. Gasso commented. "It's nice to have the resources to speed up research, but sometimes taking your time has its rewards. We are comfortable with our position, so long as we stay creative and profitable."

Gaia Herbs: Passion for People, Plants and Planet

Ric Scalzo is the man and the mind behind North Carolina-based Gaia Herbs, an herbal products company that is as much about protecting human health through the use of plants as it is about protecting the planet. Prior to founding Gaia Herbs in 1987, Mr. Scalzo worked as a clinical herbalist in an early integrative medicine practice in Massachusetts during the 1980s, after receiving a Master Herbalist degree from Dr. John Christopher, founder of the School of Natural Healing, in 1981.

Through his experience with Ayurveda, iridology and naturopathy, and formulating and compounding liquid herbal remedies for thousands of patients, Mr. Scalzo wanted to address a broader, more extensive audience. So he set his sights on building a company that could offer rejuvenative elixirs--concentrated herbal syrups to help people meet their wellness needs--for a range of consumers interested in the healing power of plants.

Out of this dream came Gaia Herbs, which is both a company and a philosophy to Mr. Scalzo. "There's a symbiotic relationship that exists between plants and cells in the human body," he explained. "But for me it goes beyond the physical because when you take a plant you are consuming knowledge. With Gaia Herbs I wanted to take the opportunity to enliven that knowledge within people. Plants have the ability to reset the physiology back to wholeness."

As it quickly grew from a New England-based herbal manufacturer to a nationally-distributed company, Gaia Herbs launched full-strength fluid extracts of Chinese, Amazonian, African, European and tropical herbs, along with an array of proprietary" supreme" blended products based on the formularies of the eclectic physio-medical doctors of the 19th and early 20th centuries, such as Drs. Lloyd, Scudder and Roberts, along with Ayurvedic principles.

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By the early-1990s, Gaia Herbs had introduced the first "standardized full spectrum" fluid extracts with guaranteed biomarker concentrations on product labels, while preserving the natural array of phyto-constituents. After moving the company's headquarters to Western North Carolina in 1996-in an effort to combine certified organic farming into a certified organic manufacturing, laboratory analytics and packaging operation--Gaia Herbs launched a patented vegetarian liquid capsule delivery system (trade name: Liquid Phytocaps), which offers the superior bioavailability and absorption of their fluid extracts in a convenient vegetarian capsule.

So what makes Gaia Herbs' business model both unique and sustainable?"In an economy that has been extremely humbled by failed system-wide investments in highly leveraged fast-growth models, and in a global trade system that has come to rely far too heavily on raw ingredients of questionable authenticity and safety, Gaia Herbs has stayed true to a predominantly domestic U.S. grower/manufacturer model. This has yielded slow and steady growth for the past 10 years, along with unsurpassed scientific quality and validation of our raw materials, the majority of which on a weight basis we grow ourselves," said Greg Cumberford, vice president of strategic initiatives. "Gaia Herbs is probably a 'Company to Watch' this year because of the way we're honoring ancient and traditional (pre-20th century) medicinal systems, while constantly pursuing 21st century methods for validating and authenticating the quality, safety and efficacy of traditionally used medicinal herbs."

Gaia Herbs is in the small minority of companies in this space that actually controls its entire value chain, through its own farm or its trusted growers and suppliers, making it truly vertically integrated from "seed to shelf." Further, the company has been recognized as a leading supporter of scientific research through federal grant awards from NIH and USDA.

Recently, in partnership with Clemson University, Gaia Herbs developed a new all-natural biopolymer composite resin made from renewable resources (trade name: EarthBottle), which will bring environmentally sustainable packaging solutions to many dietary supplement companies all over the world.

"As consumers move away from taking pills to solve isolated health concerns and into changing their entire diet/lifestyle/spirituality profiles, they tend to 'come home' to comprehensive plant-based solutions that support long-term wellness and prevention goals," said Mr. Cumberford." Biologically, the human genome is no different than it was 40,000 years ago. Our bodies expect to receive an ecologically diverse diet of plant-based nutritional inputs as the foundation of our health. Because so many people have become compromised through adverse diet and lifestyle circumstances and choices, in terms of reaching their true health potential, Gaia Herbs' approach is both very timely and timeless."

He went on to say that the company's philosophy of personal health empowerment, holistic natural wellness solutions in optimal delivery systems, and deeply validated quality in sourcing and manufacturing has found a loyal and expanding consumer base, driven by a desire to connect personal and planetary healing. "This, of course, is why Ric Scalzo named the company 'Gaia' in the first place 22 years ago," said Mr. Cumberford. "Gaia Herbs will continue to adhere to our philosophy of 'contemporizing the ancient' because we are convinced that the human genome needs this level of support, especially during these stressful times."

Virun: Developing 'Clearly Exceptional Technology for Nutraceuticals

Established as a biotechnology company in 2003, Virun, City of Industry, CA, was never supposed to pursue the nutraceuticals market. But as fate would have it, the expertise it accrued in developing delivery technologies for pharmaceuticals actually prepared it to be an ideal solutions provider in the nutraceuticals space."I come from a pharmaceutical background, where I started working with small particles to use in injectible medicines," said Philip Bromley, founder and CEO." Originally, Virun was founded as an R&D company with the goal of improving the oral pharmacokinetics of compounds. The food and beverage industry was a happy accident."

In the early days, while the company focused on improving the oral bioavailability of naive compounds and peptides, it gained recognition for its Mucosa Adhesive Penetrating Technology (MAPT). Its major accomplishment was achieving 61% oral bioavailability of human recombinant insulin compared to IV injection. These technological advancements are what set the stage for its move into nutraceuticals.

As a biotechnology company, Mr. Bromley quickly realized Virun would always need funding, which is part of the reason why the company decided to focus simultaneously on the dietary supplement and food and beverage markets. "Biotech companies are getting absolutely no funding these days, so our happy accident has paid off for us," he said. "Today, due to our wide range of expertise, our profits are very diversified, much like a strong, conservative investment portfolio."

Virun's specialty lies in using nanotechnology to incorporate non-polar (water hating) compounds, such as omega 3s and CoQ10, into food and beverages with clear solubility and stability. Until now, these compounds had no life in clear, shelf-stable beverages, existing mostly in cloudy or dairy-based applications. Virun's technology essentially creates a bubble around the ingredient so that it remains protected, allowing it to be added to a multitude of applications. This opens the door for ingredients that in the past have been notoriously difficult to formulate with, including omega 3s (EPA/DHA), CoQ10, beta-carotene and lutein.

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Further, the substances Virun uses in its technology are natural. Instead of using synthetic preservatives, it uses a natural antioxidant system, which binds to EPA/DHA, for example, to reduce light scattering and contribute to the clarity of beverages. The natural antioxidant system also prevents oxidation, which is crucial for ingredients like fish oil. For these reasons, Mr. Bromley regards nanotechnology as Virun's" blank canvas."

Most recently, the company developed a highly concentrated form of its Omega[H.sub.2]O line of products, allowing for a more affordable solution to food and beverage formulations. "You can expect the first ever shelf-stable apple juice containing EPA/DHA to hit store shelves this summer in several SKU types, including a unique kids single-serve product, along with larger serving sizes," he said.

In addition to being the founder and CEO, Mr. Bromley is also the man responsible for developing most of the technology and intellectual property for Virun. Compared to working with pharmaceuticals, Mr. Bromley said working with foods and beverages is very different. "In the pharmaceutical industry you have a responsibility for helping to cure disease. In the food and beverage industry, we are concerned mostly with providing technical solutions for various applications. It's a totally different proposition."

Currently, there are several different companies on Virun's client list, ranging from omega 3 suppliers to big food and beverage companies. And so far Mr. Bromley is really enjoying the collaborative efforts. "Large beverage manufacturers are more than willing to research an application together, which not only yields a solution, but allows for camaraderie in a faceless age of technology," he said.

For the future, Mr. Bromley accepts the role of being a solutions-driven company. "For as long as there are problems, we hope Virun will be an integral solutions partner," he said. "Down the road, I believe the nutraceuticals industry will see double-digit growth. I also believe that innovation will become more affluent, especially with the growing number of professionals, scientists and entrepreneurs diversifying our industry around the world. Our industry is more globally united than ever before."

By Rebecca Wright

Editor