Independent trial affirms potential of Chemeq’s antimicrobial

An independent trial of the polymeric antimicrobial developed by Perth pharmaceutical company Chemeq (ASX:CMQ) has confirmed the drug’s potential to improve disease control in the poultry industry, while transforming its knife-edge economics.

The trial, involving 2160 day-old broiler chickens, was conducted at a farm owned by one of Australia’s biggest poultry producers.

The randomised trial, which compared the CHEMEQ antimicrobial with the global poultry industry’s most widely used growth promoter, the antibiotic avilomycin, showed that the Chemeq product improved weight gain by an average of 2.5 per cent over the 39-day trial, and reduced mortality by 25 per cent.

CHEMEQ-treated female birds were 50 grams heavier than avilomycin treated birds, while males were 55 grams heavier – the average for both sexes was 51 grams.

The mortality rate among avilomycin-treated birds was 4 per cent, compared with 3 per cent for the CHEMEQ cohort.

The CHEMEQ-treated birds had a significantly reduced feed conversion ratio - a measure of weight gain per unit weight of food consumed - 1.595:1, compared with 1.672:1.

The Performance Efficiency Factor (PEF) of the CHEMEQ-treated birds was 26 points – PEF is an aggregate measure of feed conversion efficiency, weight gain and mortality.

Chemeq’s founder and MD, Dr Graham Melrose, says that the poultry producer involved in the trial was “very impressed” by the result. In the poultry industry, a profit increase of just 1 per cent is highly significant. Profit margins for producers are razor thin – they receive only about 35 per cent for a bird that may retail for $7.

Melrose says his company’s product will sell at a premium over the current price of avilomycin, but on a weight-for-weight basis, the protective concentration of the CHEMEQ antimicrobial is only 3mg/kg, compared with 15mg/kg for avilomycin.

Around the world, government health authorities are seeking to wean the livestock industries away from the use of antibiotics as growth promoters.

There is strong scientific evidence that the indiscriminate use of antibiotics in the livestock industries selects for resistant microbes which that subsequently pass their resistance genes to pathogenic microbes in humans. The resulting infections cannot be treated with frontline antibiotics. The use of the antibiotic avoparcin in the poultry industry for example, has been linked to the emergence of vancomycin-resistant enteric bacteria in the world’s hospitals.

The CHEMEQ antimicrobial has already been approved for sale in the pig industry in New Zealand and South Africa, and the South African pig industry will be the company’s first customer when commercial production from its new, AUD$35 million Perth factory in about three weeks’ time.

Melrose says Chemeq has applied to market the antimicrobial to the New Zealand and South African poultry industries, and has applied for approval to market it to both the pig and poultry industries in Australia, Thailand, Korea, Brazil, Europe and the US.

It expects approval from the Australian Pesticides and Veterinary Medicines Authority before the end of the year.

Melrose says the potential of the new drug can be gauged from the fact that if just one of Australia’s two major poultry producers, Steggles and Inghams, decided to use CHEMEQ throughout its production facilities, it would consume the total output of the new Perth factory.

Globally, the potential market for the new drug in the pig industry is estimated at AUD$4 billion, and in the poultry industry, AUD$5 billion.

“The Australian poultry industry is less than 1 per cent of the global market,” Melrose said. “The Australian pig industry is less than half a per cent of the global market.

“There seems to be some anxiety in the market about our ability to sell all the drug we will produce from our first factory – but we estimate it will be manufacturing only about a quarter of a per cent of the potential global demand.

“It’s bigger than any human health market for a single pharmaceutical product.

“We could close our eyes and still sell all we can make, and our plan is to expand our production capacity as rapidly as well can – we’re already involved in planning another factory.”