Last year, the global animal health market was valued at more than $42 billion, with much of the growth coming from mergers and consolidations.
Combined with the increase in popularity of companion animals as well as the demand to feed up to 10 billion humans by 2050, there’s a pressing need to fill R&D gaps created by budget and strategic reprioritization.
TechAccel and Reliance Animal Health Partners thinks Covenant Animal Health Partners can help meet that need.
The Overland Park-based animal health investment company announced the formation of the new subsidiary during Global Animal Health Week. Covenant is based out of TechAccel’s headquarters, with a staff distributed throughout the country.
Covenant’s purpose will be to provide “revenue-ready” animal health products, meaning products that have been fully developed, tested and awarded the proper regulatory certifications and ready for sell. Brett Morris, a principal at TechAccel, said Covenant will build its own product portfolio that the company will sell or license to other animal health companies, as well as partner with corporations to develop technologies that stalled or were shelved because of budget considerations.
“Some of the big companies have healthy or substantial R&D budgets but they’re not growing — and so products 1 through 10 might fit in that budget they have, but 11 through 20 may not,” Morris said. “We’re trying to identify and work with some of those companies and take some of those projects 11 through 20, fund them, develop them and bring them to that revenue-ready state so that these companies don’t have to consume their R&D dollars.”
Dr. Tom Overbay, Covenant’s managing director, said the company also will work to ensure the right manufacturing strategy is in place so that once the licensing registration is complete, animal health companies can sell the product Covenant developed immediately.
“Ideally, these companies would see no difference in incorporating a Covenant-developed product versus an internally developed product. The day you receive the registration is the day you’re prepared to go to market,” Overbay said.
Overbay and Morris said Covenant will work with partners locally with the Kansas City Animal Health Corridor as well as internationally. Overbay said the company is “opportunity-based” in its approach, open to developing from any product category within the animal health spectrum.