Founder Letter

Five years ago we discovered mānuka oil, an essential oil that was produced on the East Cape of New Zealand. It was a small industry with two main producers, mainly producing oil from wild harvest, and as far as we could ascertain demand was greater than supply.

We believed that we could bring to that industry some of the expertise they were having difficulty finding locally and so we created what is now Manuka Bioscience (MBS). We helped to attract finance for plantation development, we developed products and a marketing team which would help grow global awareness of this powerful essential oil which is steam distilled from the leaf of the mānuka tree.

Mānuka oil is unique to New Zealand and is New Zealand’s most researched botanical extract. There are more than 1,000 independently published papers on it, yet it was being primarily sold as bulk essential oil to offshore companies to either formulate or repack as consumer products. 

We developed a brand to validate the consumer market, ManukaRx, and since then we have sold more than 189,000 products to over 42,000 customers in New Zealand and Australia.

With the help of Callaghan Innovation, we have extended our research base to where we are now conducting a phase 2 clinical trial for eczema and a  pilot study for adult eczema, just one of the many clinical indications that mānuka oil has proven efficacy.

In 2021, to secure supply for the potential that we understood to exist, we acquired the largest producer of mānuka oil in New Zealand and now we can say we are the largest producer of mānuka oil in the world.

We wanted a business that was unique to New Zealand, capable of scale, helped people’s lives and helped the planet. With mānuka oil, we found that we could do all of those things. The oil extracted from the leaves of the trees found only on the East Cape of New Zealand contained significant quantities of β-triketones, the natural compounds with strong antibacterial properties.

It is capable of scale – We were very excited when we found out that mānuka oil was 20-30 times more effective than tea tree oil against gram positive bacteria, the main type of bacteria that cause skin and skin related disease, and that Australian production of tea tree oil was 800 tons per annum. We estimated the volume of New Zealand production of mānuka oil was less than ten tons annually and so there certainly appeared to be a market, even for the oil without any added value formulation.

It helps lives – The oil was proven to be effective against a range of pathogens that caused skin disease. We had so many online customer reviews for our first ManukaRx product, an all-purpose, highly effective natural skin repair balm, saying how it had changed their lives. We knew that it did that. Not only did customers find it helpful, we could also see how it was helping people in the East Cape of New Zealand, providing an economic land use option for small landowners and employment opportunities for local people in small rural communities. What we said to the locals is, “see what wine has done to Marlborough over the last 20 years, we believe that mānuka can do that for the East Cape”. We are also delighted to have the local Iwi as shareholders in Manuka Bioscience.

It helps the planet – a big yes, it would certainly be able to help the planet. Small non-productive land blocks or even parts of larger blocks could be planted in mānuka which could be a better environmental land use than the existing uses for this land. Mānuka also plays an important role in protecting our biodiversity, improving land stability and enhancing water quality.

Here we are five years later!

• We have market validation, mānuka oil is a powerful ingredient and we regularly get amazing reviews from our online customers telling us how one of our products has helped to alleviate some skin problems they have been struggling with for years.
• We have New Zealand government support for our research programme and clinical trials which will allow us to say more about how effective our products are.
• We are the largest producer of mānuka oil in New Zealand so have the security of supply needed to scale.
• We have protected the intellectual property (IP) from our research with patents in the markets in which we will operate.
• We have developed a team of 25 passionate staff in Auckland, Opotiki, and Te Kaha on the East Cape.

And now we want to tell Australians and Americans how good this oil and products made from the oil are, and how we can help their skin, naturally.

Expanding globally and extending our understanding of this powerful unique New Zealand ingredient is what we are going to do but we need your help to do it.

We would love to share our journey with you.

Nick & Stuart

Executive Summary

Manuka Bioscience (MBS) was established in 2016 to identify opportunities in medical mānuka honey, however we have now developed into an innovative bioscience healthcare company and make products using mānuka oil as a candidate for the treatment of a variety of skin diseases.

Mānuka oil is antimicrobial (antibacterial, antifungal and antiviral) and has minimal risk of antimicrobial resistance and as such can be effectively, safely and powerfully used to treat a variety of skin conditions.

Since 2017, we have developed and sold a consumer product range to educate the market on the benefits of mānuka oil and to generate cash flow which will ultimately help fund research and development into other botanical medicinal products. The ManukaRx direct to consumer e-commerce brand has been particularly successful and generated $2m in sales in FY22. It is forecasted to continue growing at pace and generate between 40-50% of Manuka Bioscience’s revenues over the next 4 years. All the while, research and development alongside clinical trials continue to be carried out to position Manuka Bioscience to be able to license our botanical medicinal ingredients to pharmaceutical companies globally. These partners will distribute over the counter products and dermatological therapeutics using East Cape mānuka oil (ECMO) from New Zealand as the core active ingredient.

β-triketones, which are found in mānuka oil, have strong antimicrobial properties. East Cape mānuka oil (ECMO) has the highest level of β-triketones in the world. It’s a powerful natural product grown in New Zealand but one that can have a massive global impact.

ECMO is grown, harvested and distilled in collaboration with local iwi; the partnership benefits both the natural environment and the rural community. More than 5,000,000 native mānuka trees have been planted on land that was formerly used for grazing or maize production.

New planting is vital to the growth of the business, providing local landowners with a sustainable, carbon-positive, and more lucrative farming option. In a region where poverty levels are high and jobs are scarce, mānuka oil production is creating a sustainable industry in the East Cape region of New Zealand. Manuka Bioscience works with whenua Māori in New Zealand’s East Cape and Eastern Bay of Plenty to help increase the number of jobs in the region and develop its economy.

Manuka Bioscience has a wide variety of customers both current and achievable based on their product set and the extensive applications of mānuka oil. By diversifying into skincare and cosmeceuticals, we are able to spread awareness of mānuka oil as we build a pipeline of botanical medicinal products. Mānuka oil based products will be able to support common skin concerns that have multi-billion dollar markets worldwide. 

We have developed a growth strategy that leverages expertise in research and development, while also focusing on growing the existing brands and launching into the lucrative over the counter botanical medicine market. 

With a clear vision and steadfast strategic execution, we have grown from a single product company, selling our ManukaRx ointment online, to a global category leader in mānuka oil with multiple brands, a growing international customer base, a pipeline of botanical medicines undergoing clinical and consumer trials, a strong global IP position, and ownership of the largest mānuka oil supply in New Zealand and the world.

Investment Highlights

• Established and rapidly growing eCommerce skincare brand, utilising East Cape Mānuka oil as a key ingredient, that generated NZD2m of sales in FY22.
• Ownership of the largest mānuka supply in New Zealand and a global leader in mānuka oil production.
• Wide base of intellectual property (IP) protection that covers the present and future high-value-added mānuka oil-based products
• Experienced leadership across all key functions of the business.
• Loyal and rapidly growing global customer base with 42,000 customers currently.
• Strong pipeline of evidence-based botanical medicines in clinical and consumer trials.
• Demonstrated ability to envision, plan and execute on strategic growth.
• Forecasting ~NZD 30m revenue in FY26 with ~NZD 10m EBITDA.

The Problem

The human skin is the largest organ in the body. Skin health is the leading reason for seeking medical help and is the single most important determinant of human appearance and identity. Events that compromise skin health have a profound and potentially devastating impact on general well-being and self-esteem. Illness that directly affects the skin is the fourth most frequent cause of all human diseases, affecting some 1.9 billion people at any one time.

Common skin infections such as impetigo (school sores), boils, cellulitis, serious surgical wound and prosthetic device infections, urinary tract infections, and septicaemia have become difficult and sometimes impossible to treat due to a phenomenon called antimicrobial resistance, or AMR. AMR occurs when microbes, such as bacteria, mutate and become unresponsive to antimicrobials such as antibiotics. By 2050, more people will die from AMR infections than currently die from cancer: 10 million deaths every year, at a cumulative global cost of USD100 trillion. Antibiotic-resistant superbug MRSA is a leading cause of infections in both healthcare and community settings globally. With AMR reducing the pool of effective antibiotics, the virulence and impact of MRSA is increasing.

"A Post antibiotic era – in which common infections and minor injuries can kill – far from being an apocalyptic fantasy, is a real possibility"

World Health Organisation

The Opportunity

Manuka Bioscience is developing products using mānuka oil, as candidates for the treatment of a variety of skin infections. Mānuka oil is antimicrobial and is likely to reduce the risk of antimicrobial resistance. As such can be effectively used safely and powerfully to help a variety of skin conditions.

Mānuka oil contains superpowered levels of the therapeutic properties of mānuka honey. The strength of its anti-bacterial, anti-fungal and anti-viral effects is what makes this oil so special. Because of these properties mānuka has been traditionally used by New Zealand’s indigenous Māori people for skin, respiratory and digestive ailments.

The essential oil found in the leaves of the East Cape mānuka contains the highest levels of the active “triketone” compounds of any Manuka found in New Zealand and Australasia.

1. Accelerate the growth of a New Zealand industry based on the proven benefits of mānuka oil from the East Cape of New Zealand as a skincare, cosmetic and botanical therapeutic solution.
2. To commercialise effective botanical therapeutic treatments for skin and wound infections in global markets while reducing the risk of AMR.

1. Growing a New Zealand Industry based on the proven benefits of ECMO

ECMO has the highest levels of β-triketones in the world (up to 40%). It has been proven that antimicrobial properties of ECMO are due to these triketone compounds.

The opportunity to create a New Zealand industry is significant and can be compared with the growth of two similar industries.

• The growth of the mānuka honey industry - ECMO is up to 1,000 times more effective than mānuka honey against gram positive bacteria.
• The growth of the Australian tea tree oil industry - ECMO has been proven to be 20-30 times more effective than tea tree oil against common skin bacteria.

The mānuka oil industry in New Zealand started on the East Cape in the late 1980’s and gained some traction after a Cawthron Institute conducted a thorough investigation testing about 40 organisms against four oils - East Cape mānuka, East Cape kanuka, Australian melaleuca (tea tree oil) and high terpineol pine oil (as used in Dettol).

The results of that study demonstrated the powerful antibacterial properties of ECMO. Since then more than 1000 independent peer reviewed research papers have been published about the outstanding therapeutic properties of ECMO.

Until 2018, all of the production of mānuka oil was from wild harvest and there were two main producers of mānuka oil. In 2018, the first mānuka plantations were planted and today there are approximately 300 ha of plantations on the East Cape of New Zealand producing up to 10 tons of mānuka oil annually.

MBS is the global leader in the mānuka oil skin health category and we use ECMO formulated with other synergistic ingredients and carriers to optimise the efficacy and appeal of our skincare, consumer, cosmeceutical and botanical therapeutic products. We also sell mānuka oil to more than 100 customers in 20 international markets.

2. Commercialising the therapeutic value of ECMO

The predominant medicine source globally has always been from plants (more than 60% of all medicines). ECMO is New Zealand’s most powerful, most researched and multi-benefit botanical ingredient. It has very low toxicity and allergenicity and is proven to be:

• Antibacterial highly effective in killing and inhibiting the growth of bacteria that cause skin and wound infections, acne, tooth decay and gum disease.
• Antifungal highly effective in inhibiting the growth of fungi that cause athlete’s foot, ringworm and yeast infections.
• Antiviral mānuka essential oil exhibits a high capacity to destroy or inactivate viruses such as HSV-1 which causes cold sores and HSV-2 which causes genital herpes.
• Anti-inflammatory mānuka oil exhibits antiinflammatory properties and is suitable for the treatment of inflammatory skin conditions such as eczema and psoriasis, as well as infected wounds.

There are two main ways of curbing AMR:

1. Prudent use of antibiotics, especially in the treatment of most skin and wound infections;
2. Discovery of new classes of antimicrobial compounds with minimal contribution to AMR.

ECMO has the potential to be a new class of antimicrobial compounds because of its known efficacy in the treatment of a variety of skin infections caused by a broad range of pathogens, including antibiotic resistant MRSA.

Global research over the last 20 years shows that bioactives in essential oils, individually and in combination, can have significant therapeutic value in the treatment of skin and wound infections without causing AMR.

The objective of all bioactive discovery processes is to establish the most promising lead compounds, which then may be used to develop therapeutic agents. One of the families of bioactive compounds present in ECMO is natural β-triketones, found in mānuka oil from the East Cape region of New Zealand.