Why Stevia First is Ready to Shine in Fast Growing Stevia Industry
Before we introduce Stevia First Corp. (STVF – $0.48), let’s start with an overview of stevia and why it has such huge potential.
Stevia has no calories and is up to 300 times sweeter than sugar in the same concentration. It’s derived from a plant, which is part of the Asteraceae family, related to the daisy and ragweed. Several stevia species called “candyleaf” are native to subtropical and tropical regions from western North America to South America. In some of these regions people have used leaves from the stevia bush to sweeten food for hundreds of years.
In the western world, stevia, and its benefits to the ever growing obese population, was only discovered a few years ago. Now, stevia is attracting more and more attention with the rise in demand for low-carbohydrate, low-sugar sweeteners, a market estimated to be worth $10.5 billion in 2012, according an analysis by Markets and Markets research firm.
Eureka, a cure to reduce obesity and diabetes! Not quite yet, because stevia’s taste is somewhat different and has a slower onset and longer duration than that of sugar. So at this moment replacing all sugars in foods and drinks with stevia, while maintaining the same taste isn’t yet possible. But that issue is being remediated.
The big breakthrough for stevia, as a food and drinks additive, occurred in 2012, when PureCircle (LSE: PURE) announced a joint venture with The Coca-Cola Company to develop commercially viable stevia sweeteners.
Today, Coca-Cola is using stevia in 45 of its products, such as Vitaminwater Zero and Fanta Select. Late last year it launched Coca Cola Life in Argentina, sweetened with sugar and stevia. The new drink has 108 calories in a 600 milliliter bottle – between classic Coke with 250 calories and the zero-calorie Diet Coke. “Coca-Cola Life is the first soda from the Coca-Cola family that is naturally sweetened with sugar and Stevia, which adds to our portfolio a delicious taste with a proposed low in calories”, Coca-Cola stated on its Argentinean website.
No date has been set to introduce the product elsewhere, but Company executives at a news conference in Buenos Aires, compared this launch with the 2005 debut of Coca-Cola Zero, which was first introduced in Australia and later sold elsewhere.
The development of new stevia products continues. Earlier this year, PureCircle received a GRAS (generally regarded as safe) letter from the US Food and Drug Administartion for its high-purity Rebaudioside M sweetener (also known as Reb M or Reb X), clearing the way for PureCircle to use the sweetener in soft drinks and food in the United States. Purecircle claims the substance has a “closer taste to table sugar than previous stevia ingredients, allowing for deeper calorie reductions in food and beverage products, particularly those that have higher levels of sweetness”.
So all good news for PureCircle. Alas, the company has a $1.6 billion market cap and is, as such, not what we’re looking for. So we started a search for a suited stevia-related small cap company. And as always with a hype or new trend, we found many obscure companies, some with good intentions, but others with pump and dump intentions, eager to make a quick buck.
Why Stevia First
What we have learned over the years when dealing with a young sector in which the products and techniques are new, is to look at the jockey and not so much at the horse. Because the sector is still establishing itself, it’s extremely hard to determine what will work and not. In such a case, it’s safe to bet on people who have already earned their stripes. And so our search led to Stevia First.
Stevia First plans to become a premier global supplier of stevia products through use of proprietary fermentation technologies combined with modern agricultural innovations. The stevia extract would be destined mostly for use by major multinational food and beverage companies, which enables the reduction of sugar and artificial sweeteners in low-cost, mainstream products.
Of the most abundant steviol glyclosides, the one with best taste profile is Reb A, which can be 200 to 400 times sweeter than sugar, depending on how it is formulated and used. Reb A has zero calories and does not elicit a glycemic response – making it appropriate for diabetics. It’s also non-cariogenic, making it safe for teeth. Because Reb A is heat and pH stable, people can use it the same way they use sugar – and enjoy calorie-free sweetness.
As part of its “Beyond Reb A” research program, Stevia First aims to produce not only Reb A through fermentation-based methods, but also more rare steviol glycosides such as Reb D and Reb X, which have been identified by major multinational companies as the next-generation of stevia sweeteners.
So far so good, but the best is yet to come when we look at the “jockeys” in charge to execute these plans.
Robert Brooke, Chief Executive Officer – is a co-founder of Stevia First Corp. He was previously the founder of Genesis Biopharma, Inc., a cancer drug development company, and served as President and CEO of Genesis until February 2011. Mr. Brooke also founded Percipio Biosciences, Inc., a research diagnostics company that manufactures and distributes products related to oxidative stress research worldwide. From 2004 to 2008, he was a buy-side analyst with Bristol Capital Advisors, LLC, an investment manager for Bristol Investment Fund, Ltd.
Avtar Dhillon, M.D., Chairman of the Board – is a co-founder of Stevia First Corp. Dr. Dhillon is currently Chairman at Inovio Pharmaceuticals, Inc. (NYSE Amex: INO). He’s also the former President & Chief Executive Officer of Inovio where he successfully led the turnaround of the company through restructuring and the acquisition of technology from several European and North American companies, including a merger with VGX Pharmaceuticals to develop a vertically integrated DNA vaccine development company with one of the strongest development pipelines in the industry. He led eight successful financings, raising more than $136 million for the company, and concluded several licensing deals valued at more than $200 million that included global pharma leaders Merck and Wyeth (now Pfizer).
Dr. Anthony E. Maida, III, Ph.D., MA, MBA, Director – brings a strong practical experience in agriculture through management of all aspects of a family farm business and contract work for Del Monte, Sunsweet, and FMC Corporation. This includes work related to row crops for irrigation, pest control, cultivation, harvest, technology utilization, equipment operation, experimental seed testing, and set-up of fully-integrated agricultural systems.
Dr. Maida’s expertise includes the execution and oversight of finance, operations, research, clinical and scientific development, regulatory and manufacturing for the development of various therapeutic initiatives. Over the past 25 years Dr. Maida has served in a number of executive roles including, Chairman, CEO, COO, CSO, CFO and business development. Over recent years Dr. Maida has raised or assisted in financings of approximately $200 million for emerging biotechnology companies. Today, Dr. Maida serves as an advisor, consultant and technical analyst for multiple investment firms and life science companies. He sits on the board of directors of Spectrum Pharmaceuticals, Inc. and is a former board member of Sirion Therapeutics, Inc. and GlycoMetrix, Inc.
Quite impressive right?
For small cap investors looking at opportunities in the stevia market, we believe Stevia First is a suited candidate based on the fact that its management has proven to be capable of moving research forwards and of raising the necessary money.
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