No Summer Doldrums at EnWave Corp
After announcing a machine purchase order, a Technology Evaluation and License Option Agreement (TELOA), and a commercial royalty-bearing agreement, EnWave Corp (TSXV:ENW – $1.15 CAD & OTC:NWVCF – $0.89 USD) extended its TELOA with Ultima Foods Inc. All in one month!
In May last year, the Company signed a technology evaluation agreement with Ultima Foods, a major Canadian yogurt and fresh dairy products manufacturer. Since then, the dairy company conducted all of its product development work on a 10kW Radiant Energy Vacuum (REV) dryer at EnWave’s facility in Ferndale.
Now that Ultima has successfully developed several shelf-stable yogurt snack products with the use of the Company’s REV technology, it’s time to take the following step.
The next phase of development includes the installation of a 10kW REV machine for a period of up to six months in Ultima’s processing plant in Quebec, Canada. This rented unit enables Ultima to refine its developed products and prepare for a commercial launch in early 2017.
EnWave will also receive a royalty on all goods sold that are produced with its REV technology. If the product is successful, larger dehydration equipment will most likely have to be purchased.
The agreement between EnWave and Ultima Foods gives the latter the exclusive right to develop dehydrated yogurt applications using EnWave’s REV technology.
Ultima Foods, a joint venture of two of Canada’s largest dairy cooperatives Agropur and Agrifoods, has over 700 employees and produces more than 100 million kilos (220 million lbs) of fresh dairy products each year at its Granby, Quebec plant. Ultima is a big player in the market. It owns two production plants, three distribution centers and five sales offices across Canada.
Since 1971, yogurt consumption in Canada has increased from 471g (1 lb) to 8.7kg (19 lbs) per person each year. From drinkable yogurts and tubes to probiotics and unique flavors, Ultima’s products, sold under the Iögo and Olympic brands, have played a vital role in this tremendous growth.
A New Way to Dry Military Ration Components
A few days ago, EnWave representatives attended the Institute of Food Technologists (IFT) show in Chicago. IFT is the largest food industry trade show in North America for food ingredients, equipment, processing, and packaging suppliers. With more than 1,100 companies exhibiting, this is where the latest global food trends — and the products and innovations designed to address them — are on display.
This year’s show was a phenomenal success for EnWave in terms of leads acquisition. Many well-known companies stopped by EnWave’s booth with a specific product application in mind. The show generated 70 new leads for the company.
It is noteworthy that Dr. Tom Yang, a food technologist at the U.S. Army Combat Feeding Directorate, gave a presentation at IFT in which he touted the use of EnWave’s nutraREV technology to produce U.S. soldiers’ ration. Click to view the slides of the presentation.
The Combat Feeding Directorate actively leverages leading edge technologies to ensure the warfighter is provided the decisive edge in all aspects of combat feeding.
It basically provides the Department of Defense (DoD) with a joint service program responsible for Research, Development, Integration, Testing, and Engineering for Combat Rations, Food Service Equipment Technology, and Combat Feeding Systems.
Dr. Yang has been pushing the U.S. military to buy a REV machine for some time now. He was quoted saying, “With Vacuum Microwave Drying you combine vacuum technology with microwaving to remove water, you can do so at a lower temperature. You maintain nutrients since the rapid drying process doesn’t destroy heat-sensitive nutrients. The colors remain appetizing and the texture doesn’t become hard and brittle. In addition to producing higher-quality foods, the process takes less time than conventional air drying or freeze drying.”
Dr. Yang continued, “Our Soldiers deserve the best. They are under a lot of stress and they need to be well fed. Their physical and mental state needs to be in top shape. We are hoping to get a vacuum microwave unit so that we can use it as a tool to try out many ingredients and recipes that we know soldiers would like to have.”
If the U.S. military decides to move forward, a logical next step would be to buy a 10kW REV unit to start doing product development. If that phase is successful, this could become another huge opportunity for EnWave.
Advancing REV for Pharmaceutical Applications
In other news, Dr. Richard Mitchell, with over three decades of experience in various management and business development roles, has joined EnWave. He is the new Senior Vice President, Pharmaceutical Business Development and is responsible for expanding the presence of EnWave’s REV technology in the biotech and pharmaceutical sectors.
These are two very lucrative markets for EnWave. In comparison to the industry standard, lyophilization (freeze drying), REV has proven to dramatically reduce processing times, while maintaining product efficacy, shelf-life and stability. REV machines also typically have smaller footprints allowing for the optimization of expensive clean room plant space. Both powderREV and freezeREV are appropriate replacements for the freeze drying process.
- Designed for bulk dehydration of temperature-sensitive biomaterials such as probiotics and enzymes. EnWave has developed powderREV as a high-speed, low-energy, continuous alternative to lyophilization. Pilot-scale and commercial-scale machinery is currently available for use by EnWave partners.
- Designed for the dehydration of biomaterial and pharmaceutical products below the freezing point in vials, freezeREV is currently available as a multi-vial prototype for partner research and development. EnWave is currently building a commercial-scale non-GMP freezeREV machine suitable for the drying of vaccinations.
EnWave has already signed two commercial licenses in these areas. The first one is with Sutro Biopharma, a pharmaceutical company based in San Francisco, and the second one with Merck, one of the world’s leading pharmaceutical, chemical and life science companies.
Dr. Mitchell was formerly the Director of Business Development at Fred Hutchinson Cancer Research Center after holding strategic positions in many well-known pharmaceutical and technology companies, including Nastech Pharmaceutical, Adnavance Technologies and Shoreline Community College, MDS Pharma Services, among others.
The hiring of Dr. Mitchell specifically for these markets indicates that there’s a tremendous amount of potential.
For more than 40 years, Ultima Foods has been a Canadian leader in the manufacturing and marketing of yogurt and fresh dairy products. When the company started looking for an innovative way to produce dehydrated yogurt products to consumers, it opted for EnWave. Ultima is yet another company that’s moving closer to becoming a royalty paying customer.
The IFT show was a huge success for EnWave and a validation that the Company is becoming the reference in the dehydration space. Also the presentation of Dr. Yang as part of the Innovation Summit at IFT was an eye opener. Any progress with the U.S. Army as potential customer would be very big news.
Finally, a seasoned pharmaceutical industry professional such as Dr. Mitchell should bring a lot of industry knowledge to the table. Consequently, we expect more news in this area soon.
This is only the beginning for EnWave. It’s certainly not too late to buy shares or to add to your position. Buy recommendation.
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So many developments to look forward to. I’m particularly looking forward to the Sutro Biopharma and Merck updates! I couldn’t be more impressed with ENW’s ability to execute their business plan as of late.
You’re absolutely correct. There are so many things happening at EnWave. Their team is extremely energized as well with so many opportunities at hand.
Can you share on how you arrive at a target price of $ 3.23 ? And in what time period ( 12 months?)
Hi John….feature request for Enwave. Can you add ticker symbol links when referencing companies using EnWave Products. I think a means to determine the effectiveness of companies using Enwave products might be to see if using Enwave products is affecting their bottom line through reductions in CAPEX, OPEX, or in increased sales and profit margins.
My thinking is improved CAPEX and OPEX reductions might be attributed to organizations using Enwave machines whereas increased sales and profit margins, through product offerings, could bolster projections for increased royalties to Enwave.
Great idea. We’ll make sure to do so. Note though that only a couple of companies, with which EnWave has a commercial agreement, are public.