VIVXF - Avivagen Inc. (VIVXF)(VIV:CA) - Management Call on AB Vista Distribution Agreement
Agreement. As we had anticipated, Avivagen has entered into a distribution agreement focused on the U.S., Brazil, and Thailand markets. The 8-year agreement is with AB Vista. We expect the agreement to expand the adoption and use of OxC-beta in a number of high-value feed production markets worldwide. The AB Vista agreement should bring additional credibility for OxC-beta across the feed additive industry.Who Is AB Vista? AB Vista is a a global animal nutrition technology company supplying feed additives, nutrition expertise and analytical services to animal feed and protein producers. The Company is one of the top distributors of feed enzymes worldwide, with a large technical sales force. We believe AB Vista will be able to leverage its existing relationships and distribution partnerships for OxC-beta.Details. As mentioned, the agreement is for eight years, with AB Vista to become the exclusive distributor of OxC-beta for use with poultry, swine, ruminants, and aquaculture in the U.S., Brazil, and Thailand. The U.S. is the second largest market for animal feed (after China), Brazil is the third, and Thailand, the sixth largest. The agreement contains minimum purchase agreements, which, if hit, could result in Avivagen needing additional production capacity. The deal does not include rights for either the human or companion animal products.Transformative. We believe the AB Vista agreement has the potential to be transformative for Avivagen. And we do not rule out the possibility of AB Vista being granted rights to other areas. Management did note that there were at least five major firms interested in obtaining distribution rights for OxC-beta, which we view as some confirmation of the product. Next up is approval in China and Vietnam.Maintaining Outperform. We are maintaining our Outperform rating and US$1.00 12-month price target. Avivagen is an early-stage revenue company focused on developing and commercializing products for livestock, companion animals, and humans. We believe the Company is at an inflection point with significant sales increases just around the corner and presents a favorable risk/reward proposition. Read More >>