The following was provided while participating in the 2023 Destination Startup® Showcase.
Return to Destination Startup® Information Page
What We Do
uPetsia solves bad dog breath with a canine oral bacteria modified to produce mint aromas for hours and is used as a feed ingredient.
Affiliated Institution: University of Arizona
Have we formed a company? Yes
Funding: Grant Funding, Angel Funding (including Self or Friends/Family)
Our Company and the Problem We Are Trying To Solve
●Need/Value: uPetsia has developed a new animal feed ingredient that provides extended fresh breath in dogs (4x longer than existing products). Manufacturers of dog food and treats can use this ingredient to address their customers' pain point of bad pet breath as well as their desires for a dental product: it works, is convenient, and simple to use. This ingredient is a unique differentiator in a $2.3 billion (6% CAGR, compound annual growth rate) domestic market for dog dental treats, and the technology is applicable to cats and humans, with the potential for therapeutic applications. Dental treats, chews, toothpastes, and food are examples of applications. uPetsia was one of five companies globally that received a 2022 Purina Pet Care Innovation Award. ●Technology status: The bacterium is developed. A synthetic DNA construct containing the enzymes required to produce methyl salicylate (mint aroma) was introduced into canine oral bacteria. Bacteria was present and active in the mouths of dogs for two hours after feeding, as confirmed by PCR (polymerase chain reaction), recovery, and GC/MS (gas chromatography/mass spectrometry). uPetsia completed the minimum viable product, from the prototype, early in 2022. Other aromas, like vanilla, are also possible. As an animal feed ingredient, there are regulatory and testing requirements to be completed prior to being sold commercially. Multiple companies have expressed interest in using the bacteria but require regulatory approval. ●License: Exclusive, University of Arizona. ●Protection: patent-pending, PCT filing. Proprietary: 400+ canine oral bacteria database; bacteria screening technology; genomic, genetic, and bioinformatic technologies.
Our Go-to-Market Strategy
●Market: Pet food and treats are a $38 billion retail market in the USA (3% CAGR). The market for dog and cat treats is worth $7 billion. The ingredient's target sub-segment is dog dental treats, which is worth $2.3 billion (6%-12% CAGR) and has high margins. With a 20%—30% capture of the dog dental treat market, uPetsia can generate $13 million to $20 million in sales. Mint oil is the closest indirect competitor, as it is a functionally different freshening delivery method. Mint oil can be used as a complementary additive, providing an initial mint aroma before the bacteria revive and actively produce methyl salicylate (mint aroma). ●Access: uPetsia collaborates with manufacturers to incorporate the bacteria into manufacturers' formulations. As an animal feed ingredient, safety studies, reviewed by independent experts and published, are required. Additionally, the FDA will review the information. This is required before uPetsia’s products can be incorporated into existing manufacturers' products. Test marketing will be an interim step, as a supplement product, which requires less safety data and no FDA review. ●Differentiation: There are no bacteria-based products available on the market that target the oral microbiome of pets in order to improve breath quality or oral health. The closest direct competitors are mint aroma/flavor additives. These products lose their freshening properties quickly after leaving the mouth. uPetsia's modified bacteria produce pleasant aromas for hours, four times longer than mint additives. uPetsia’s roadmap includes bacteria products not only for dogs, but also for cats and humans.
How We Will Generate Revenue
●Revenue: uPetsia will sell its aroma-producing bacteria to existing pet food and treat manufacturers as an active ingredient. In full production, uPetsia anticipates selling the bacteria for $500/kg at a bench-marked production cost of $10/kg. Because the effective dose is low, additional producer costs are minimal. Several treat manufacturers were consulted about the estimated pricing, and it is consistent with their production cost expectations. Additionally, uPetsia intends to license their technology for applications other than pet treats, such as breath strips for humans. ●Financial Model: uPetsia is structured to be an asset-light company, focusing on research and development of bacteria for beneficial outcomes. Production and distribution of bacteria will be contracted, with two sources currently identified. Formulation, integration and manufacturing of food and treats will be in collaboration with existing producers – relying on their existing distribution and marketing capabilities. The future product roadmap includes additional aroma products, improved aroma production levels and duration, and the entry into the adjacent cat food and treat market. uPetsia also recognizes that having a branded product increases value. Preliminary discussions with manufacturers about co-branding with uPetsia has been positively received, as the product is a significant market differentiator. Furthermore, after initial market testing, a contract produced, branded supplement type product, such as a food topper, is possible (see Go-To-Market section) which may be an addition business opportunity.
How We Will Benefit From Destination Startup®
uPetsia is looking for funding to bring their aroma producing bacteria to market and believes that this showcase will help lead to partnerships and raise capital to move the company forward. uPetsia has determined that it will require an additional $2 million over the next two years to fund the following: $250,000 Scale bacteria production with the identified contractors. $700,000 Produce the Safety dossier necessary for GRAS (Generally Recognized as Safe) status, FDA review and other regulatory items. $100,000 Test market the product in the supplement market with limited safety data generated as part of the Safety dossier. $300,000 Formulation, manufacturing, engineering, production scale up as an approved animal feed ingredient with our partners. $175,000 Legal ($125k patent PCT, $50k other). $226,000 Salaries for one year (need beyond current funding levels). $ 45,000 UoA License, Office/Lab rent within the University of Arizona Center for Innovation incubator. $ 50,000 Lab supplies and testing for further development of existing and new bacteria strains. Cat product development. $ 35,000 Other G&A. $119,000 Runway buffer. uPetsia is always looking for strategic partnerships to supplement the company's weak areas. For example, the founding team lacked direct pet or pet food experience and has since bolstered their expertise by adding Dr. Melissa Brookshire (a veterinarian and regulatory expert) and Joe Roetheli, the founder of Greenies, as advisors, as well as spending a week at Purina's headquarters in St. Louis as part of winning a Pet Care Innovation Prize.
Operational Team: ●Mr. Zentack, CEO, holds an MBA and an engineering degree. He is a CFA charterholder. Experience in engineering, operations, sales and marketing, and investments in a variety of industries. ●Dr. Lyons, CSO, professor at The University of Arizona, has worked in pharmaceutical and biotechnology companies, and currently manages large research projects developing computational and cyber infrastructure systems for life science research. ●Dr. Ryu, Director of Research, has 20 years of experience in genetics and molecular biology, and is an expert in genetic engineering. Advisors: ●Mr. Roetheli, Pet Food/Treat Industry Advisor. Co-founder and CEO of Greenies, that grew to the 8th largest firm in the pet food/treat industry in less than a decade—sold to Mars in 2006. ●Mr. Freed, Product and Market Advisor, has 40 years experience in food and flavor businesses. He started and successfully exited several companies. ●Dr. Brookshire, Veterinary and Regulatory Advisor. She was a practicing veterinarian and co-owned a companion animal hospital. Later served as the Director of Veterinary Services for a large pet food manufacturer prior to starting her consultancy. ●Dr. Baltrus, Science Advisor, professor at The University of Arizona is an expert in host-bacteria interactions, genetic engineering, and transgene expression systems. Partnerships: uPetsia relies on partnerships for marketing, production, and distribution (see "Financial Model," above). Purina, Cosmos Corp (makers of TropiClean water additive), Wild Earth (plant based food and treats), and Jiminy's (insect protein food and treats) are all in talks to incorporate uPetsia's bacteria into their products once regulatory approval is obtained.