The Canada-based company is a wholly owned subsidiary of biotech firm SemBioSys which hopes that the increased investment will allow the business unit to function independently of the parent company.
Targeting the personal care industry
"This transaction provides Botaneco with the financial resources necessary to aggressively pursue opportunities in the personal care, over-the-counter and topical pharmaceutical markets completely independent of SemBioSys," said CEO Andrew Baum.
Venture capital firm Avrio Ventures has announced a $4m investment in the company in the form of a convertible debenture helping Botaneco commercialize its Hydresia range of personal care ingredients.
Hydresia is a natural emulsion base derived from safflower seeds and can replace synthetic and petroleum-derived ingredients according to the company.
Botaneco launched the second generation oleosome ingredient at In-Cosmetics in Amsterdam earlier this year. Hydresia G2 can be used over a broader pH range than the original ingredient, which the company claim makes it perfect for use in low pH exfoliants and anti-aging products.
"Dozens of companies are now developing consumer products with Hydresia, and we expect to see a further array of product launches based on these ingredients in the coming quarters," added Baum.
Increased demand due to natural trend
Botaneco hopes that the current trend for natural ingredients will help the company get ahead in the personal care market.
"The company's oleosome technology is well positioned to capitalize on this trend away from petroleum and other synthetic ingredients," said partner of Avrio Venture and new board member of Botaneco, Aki Georgacacos.
The Botaneco venture was designed to be the cash cow of the Canadian biotech company, providing a strong and dependable revenue stream to finance the pharmaceutical research of the parent company which is not profitable in the short-term.
Although the biotech firm posted improved revenues of just over CAD $1m ($950,000) for the first half of 2007, it made a net loss of almost CAD $6.5m ($6.2m).
