Bio marine 2013final report-v43-final
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Bio marine 2013final report-v43-final



The fourth edition of BioMarine just ended on exciting new opportunities with multiple implications for the blue economy

The fourth edition of BioMarine just ended on exciting new opportunities with multiple implications for the blue economy



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Bio marine 2013final report-v43-final Bio marine 2013final report-v43-final Document Transcript

  • TABLE OF CONTENT TABLE OF CONTENT ................................................................................................................................................... 2 BIOMARINE OUTCOMES............................................................................................................................................ 5 MESSAGE FROM DENISE LEBLANC, NATIONAL RESEARCH COUNCIL OF CANADA ................................................... 6 AVAILABLE KEYNOTES ............................................................................................................................................... 7 JOHN R. MCDOUGALL, PRESIDENT, NATIONAL RESEARCH COUNCIL OF CANADA .................................................................. 7 PETER HOGAN, VICE PRESIDENT (NOVA SCOTIA), ATLANTIC CANADA OPPORTUNITIES AGENCY (ACOA), CANADA .................. 9 MARC ST-ONGE, CEO, ASCENTA HEALTH, CANADA ...................................................................................................... 11 HENRY CLIFFORD, VICE PRESIDENT, MARKETING & SALES AT AQUABOUNTY TECHNOLOGIES, USA ................................... 15 VERONICA MCGUIRE, EXECUTIVE DIRECTOR, PROGRAM, REGULATORY AND TRADE POLICY, CANADIAN FOOD INSPECTION AGENCY, CANADA .................................................................................................................................................... 19 THAD SIMONS, CEO, NOVUS INTERNATIONAL INC., USA ............................................................................................... 23 MONA ELISABETH BRØTHER, NORWEGIAN AMBASSADOR TO CANADA, NORWAY............................................................... 25 PAUL BUNJE, SENIOR DIRECTOR, WENDY SCHMIDT OCEAN HEALTH XPRIZE, XPRIZE FOUNDATION...................................... 26 ROMAN SZUMSKI, VICE PRESIDENT LIFE SCIENCES, NATIONAL RESEARCH COUNCIL OF CANADA............................................ 29 SESSIONS REPORTS .................................................................................................................................................. 31 SESSION 1A: MARINE NATURAL PRODUCTS – DISCOVERY OF APIS FOR THE PHARMACEUTICAL INDUSTRY .............................. 31 AVAILABLE PRESENTATIONS: ...................................................................................................................................... 32 Dr. Michael Kuehnel, Sales Manager, Eurofins GfA Lab Service GmbH, Germany ......................................... 32 Prof. Dr. Deniz Tasdemir, Professor of Natural Product Chemistry and Marine Biodiscovery, Marine Biodiscovery Research Group, National University of Ireland, Galway, Ireland ............................................. 33 Jeffrey L. C. Wright, MARBIONC, University of North Carolina Wilmington ................................................... 34 SESSION 1B: AQUACULTURE BUSINESS PERSPECTIVES .................................................................................................... 35 SPECIAL SESSION: INNOVATION FORUM ....................................................................................................................... 38 PRESENTATIONS: ............................................................................................................................................. 38 ShellBond Used with Swine Waste as a Source of Natural Products: A Carotenoid Antioxidant ................... 38 2
  • Molecular Diagnostic Assays for High-Throughput Analysis of Water Samples for Invasive Species Propagules ....................................................................................................................................................... 39 Carbon Sequestering Production of Australian Premium QC Seaweed Biomass............................................ 40 ALGASOL RENEWABLES: Patented PhotoBioReactor (PBR) for the Low-Cost Cultivation of Algae Biomass . 41 Evaluation of a New "Green" Excipient for Cosmeceutical and Nutraceutical Applications .......................... 42 Commercialization of MAG-EPA as an API for the Treatment of Prostate Cancer ......................................... 43 The Turquoise Revolution: Research, Development and Commercialization of Integrated Multi-Trophic Aquaculture (IMTA) and its Diversified Products ............................................................................................ 44 Yeast Protein Concentrate; A Novel Ethanol Production Co-Product can Partially Replace Fishmeal in Aquaculture Feed ............................................................................................................................................ 45 SESSION 2A: MARINE NATURAL PRODUCTS AND ENVIRONMENT ..................................................................................... 46 SESSION 2C - INVESTMENT STRATEGIES TO REALIZE THE POTENTIAL OF MARINE BIOTECHNOLOGY .......................................... 50 SESSION: BIOMARINE CLUSTERS................................................................................................................................. 57 SESSION 3A: MARINE NATURAL PRODUCTS - COSMETICS AND OTHER PERSONAL CARE PRODUCTS ....................................... 65 SESSION 3B: OPPORTUNITIES FOR SUSTAINABLE ‘NEXT GENERATION ‘AQUAFEED INGREDIENTS ........................................... 72 SESSION3C: MICROALGAE BIOREFINERY ...................................................................................................................... 79 PLENARY DISCUSSION: INTERNATIONAL PERSPECTIVES ON MARINE AQUACULTURE ............................................................ 88 SESSION 4A: MARINE NATURAL PRODUCTS & NUTRACEUTICALS ..................................................................................... 94 SESSION 4C: SEAWEED BIOREFINERY ........................................................................................................................... 98 Special Session: EUREKA and Canada ................................................................................................................ 107 International Industrial Technology Projects ................................................................................................ 107 TIPS FOR PUTTING TOGETHER A SUCCESSFUL PROJECT.............................................................................................. 113 SESSION 5B: THE ROLE OF SUSTAINABLE AQUACULTURE REGULATION TO SUPPORT GROWING FOOD PRODUCTION .............. 119 SESSION 5C: INDUSTRIAL BIOTECHNOLOGY – OPPORTUNITIES FROM THE SUSTAINABLE USE OF MARINE BIORESOURCES .......... 126 SESSION 6A: MARINE NATURAL PRODUCTS AND REGULATORY ISSUES ............................................................................ 135 SESSION 6B: OPPORTUNITIES IN AQUACULTURE HEALTH TECHNOLOGY .......................................................................... 140 SESSION 6C: ALGAE SELECTIVE BREEDING AND GENETIC MANAGEMENT / MANIPULATION ............................................... 150 PLENARY DISCUSSION: MARINE BIO RESOURCES & SPATIAL PLANNING .......................................................................... 159 3
  • THANKS TO OUR 2013 SPONSORS ........................................................................................................................ 164 LIST OF EXHIBITING COMPANIES AT BIOMARINE 2013 ........................................................................................ 166 BIOMARINE CASCAIS 2014 .................................................................................................................................... 164 MANUEL PINTO DE ABREU, SECRETARY OF STATE FOR THE SEA, PORTUGUESE GOVERNMENT ............................................ 164 Watch the video ................................................................................................................................................ 164 4
  • BIOMARINE OUTCOMES “The fourth edition of BioMarine just ended on exciting new opportunities with multiple implications. I wish to thank all the key leaders from industry, science and government agencies for such a strong mobilization, which made the 2013 edition such an exceptional one. In addition to acting as a platform for meetings and exchanges between the different professionals of our industry, BioMarine is above all the strategic center of action and initiatives for key stakeholders in the marine bioresources sectors. Finance, research and industry have learned to use the platform to diversify their knowledge, strengthen their existing partnerships, and build new opportunities. BioMarine is indeed a high-level event, sought and coveted for its approaches as well as its trans-sector initiatives, all within an exclusively international context. This can be demonstrated by the many tripartite exchanges involving producers of raw materials, industry leaders with recognized technical expertise, and countries seeking to develop their own industry. The launch of the BioMarine International Clusters Association (B.I.C.A.) in Halifax has been welcomed by the industry which wants to accelerate the development of their SMEs, while also securing its access to international financing. It was established that the synergy between BioMarine platforms and B.I.C.A. would significantly boost trade and promote business opportunities at the international level without creating a redundant structure. B.I.C.A. is positioned to complement regional and national clusters by providing a unique network of international expertise. As a matter of fact BioMarine is now positioned as: 1 - The broker of innovation in marine bioresources, 2 - The broker of investment in marine bioresources 3 - The broker of international collaborations in the field of marine bioresources BioMarine is the only event bringing together key decision makers of this new industry. In association with B.I.C.A., it will allow manufacturers, researchers and, investors in the sector of bio marine resources to communicate more fully with government agencies, consumers and the public which is always looking for transparency and accurate information. Pierre Erwes BioMarine Executive Chairman 5
  • MESSAGE FROM DENISE LEBLANC, NATIONAL RESEARCH COUNCIL OF CANADA As we close the chapter on BioMarine 2013, I am pleased to conclude that this event has been a success on all counts. With over 300 participants joining us from 21 countries, well-attended and highly praised Discovery Day tours, a streamlined delivery of one-to-one business meetings, and a multitude of well-organized opportunities for business networking and social interactions, the consensus is that the Halifax edition of BioMarine has been the best one yet. A success like this, however, is only made possible by the commitment, contributions and most of all, the interest of all of you who attended. On behalf of the BioMarine Core Planning Committee, the National Research Council Canada (NRC), and myself, I would like to take this opportunity to extend our sincere thank you to all BioMarine 2013 delegates, exhibitors, supporters, sponsors and speakers whose collective presence and involvement was essential in generating such positive outcomes. I trust that you found your participation in this highly recognized international business forum to be as valuable and rewarding as I have from an NRC perspective, and I hope that those of you who traveled from far away enjoyed discovering Halifax and will return for business and pleasure in the near future. It is with great pride that NRC now passes the torch to Cascais, host city of the 5th edition of BioMarine. To them and to all of you, I raise a cheer to an equally outstanding BioMarine 2014 in Portugal! Sincerely, Denise LeBlanc General Manager, Aquatic and Crop Resource Development National Research Council of Canada 6
  • AVAILABLE KEYNOTES JOHN R. MCDOUGALL, PRESIDENT, NATIONAL RESEARCH COUNCIL OF CANADA O n behalf of the National Research Council of Canada, it is my pleasure to welcome everyone to Canada, to Nova Scotia, to the city of Halifax and to the 4th BioMarine International Business Convention. It is truly an honour to host this convention and I am sure I speak for our co-organizers at BioTopics SAS when I say it is gratifying to see the outstanding quality of attendees here. It is not surprising that this convention has generated much interest. The global value of the biomarine economy is now estimated at some $176 billion a year — and we have barely scratched the surface. Perhaps even more impressive than its economic potential is the part the biomarine environment can play in addressing some of the greatest problems we face as a world and as a species — providing a sustainable supply of energy and food for the future. As we are reminded in the program for this week, the global population is projected to increase by two billion by the middle of this century — with the rather stunning consequence that, over the next 50 years, more food will be consumed than in the whole of human history. Marine science and technology could have a major impact in determining whether there will be enough food as well as provide fuel sources complementary to fossil fuels. As populations and incomes rise, the global demand for energy will also grow significantly and quickly. The International Energy Agency projects that by 2035, the world's need for energy will be more than a third higher than it is today. 1 To add to the mix and partially address this growth, advances in bio-refining technology are developing rapidly around the world. Here in Canada we have launched a major algal carbon conversion demonstration project. In essence, we will capture industrial CO2 emissions and use them as a feedstock for microalgae. This biomass can be refined into carbon-neutral biofuel and other products — not just reducing harmful emissions, but giving them commercial value. This process can also contribute to a more sustainable food supply, including feed for a growing aquaculture industry which could supply as much as 50 percent of the world's protein by 2050. 7
  • As a country bounded by three oceans and with the longest coastline in the world, the potential for jobs, growth and long-term prosperity that would flow from innovation in biomarine technologies is of great interest to Canada. Within the Government of Canada alone, no fewer than 11 departments and agencies are engaged in some type of ocean science and technology, from Fisheries and Oceans Canada to the Canadian Space Agency. These departments lead or collaborate in a host of research activities ranging from environmental monitoring and sustainability of aquaculture to climate change and oceanography. Marine science and technology is a major area of interest for the agency I lead, the National Research Council of Canada — the NRC, Canada's premier research and technology organization. NRC is working with industry partners to lead the algal carbon conversion project I mentioned — a project that builds on the knowledge we've gained over more than 50 years growing and working with algae at our marine labs not far from here. NRC research partnerships stretch around the world and this past year, Canada strengthened its international presence by joining the EUREKA network. This creates new opportunities for Canadian companies and organizations to collaborate in market-driven research and development with partners in other countries. There are now more than 40 countries in EUREKA and it will be the subject of two special sessions here on Wednesday morning. Membership in this global network is part of the Government of Canada's broad commitment to foster innovation and the partnerships that are essential to accelerating the pace of innovation — including innovation in marine biosciences. Like all of you, Canada can see the potential of the blue economy to generate long-term social, environmental and economic benefits to our citizens. This week offers an opportunity to learn from one another, to build the relationships and forge the partnerships that will help to realize that potential. Please enjoy your time in this great city. I hope you will join us for the reception following this plenary session. Thank you. 8
  • PETER HOGAN, VICE PRESIDENT (NOVA SCOTIA), ATLANTIC CANADA OPPORTUNITIES AGENCY (ACOA), CANADA G ood   evening   everyone   and   welcome   to   one   of   Canada’s   oldest   coastal   cities. Like coastal populations the world over, we have a deep and binding relationship with the sea. Bonsoir   et   bienvenue   dans   l’une   des   plus   vieilles   villes   côtières   au  pays.   Comme   les   autres  populations   côtières   du  monde   entier,   nous  bénéficions   d’un   lien   profond et étroit avec la mer. First and foremost the sea has been a reliable source of sustenance over the centuries  first  for  the  Mi’q  maq  and  other  aboriginal  peoples  and  then  for  those  of   European origin who began their journeys here in the early 17 th century. But before the French and the British,   those   unparalleled   seafarers,   the   Vikings   made   their   way   to   l’Anse   aux   Meadows   in   our   sister province, Newfoundland and Labrador over 1,000 years ago. Historically, trade, transportation and foodstuff motivated our engagement with the marine environment. The promises of money, passage or a meal were irresistible driving forces that brought men and families to embrace the sea as a way of life. After hundreds of years these themes - trade, transportation and sustenance - continue to resonate. Nova Scotia live lobster is a recognized delicacy throughout the world. Just last week, Halifax took delivery of two post-Panamax cranes and the port has become a regularly scheduled destination for cruise ships plying the eastern seaboard of North America. There  has  been  great  change  too  coupled  with  opportunity.  As  a  regional  economic  development  agency  of  Canada’s   national government, this is where ACOA has a role to play, supporting opportunity with a focus on growing the economy. We work with small businesses to help them in their development of innovative products and services, to expand their market reach on the global stage, to build upon their productivity. We do this primarily through providing interest free loans and assisting clients to identify external expertise that can help them improve their offerings, or further refine a competitive advantage. We also provide the capital for the Atlantic Innovation Fund that helps support the commercialization of R&D and build partnerships between private industry and academic institutions. One of our great success stories from this program is the firm Ocean Nutrition Limited, a global leader in fish oil derived, Omega 3. The company was acquired by Royal DSM for $540 million just over one year ago. It has continued to base its operations here in Nova Scotia and has introduced a significant global player to what is happening in our local scene. As well, just last year Rolls Royce received a $3 million contribution from the Fund to develop technology to conduct refuelling and launch recovery missions at sea for unmanned surface vehicles. 9
  • In addition, we work with industry associations such as BioNova which represents the life sciences here in Nova Scotia. Among their members are companies who transform biomarine resources and who have developed international markets for their products such as Acadian Seaplants Ltd. and Ascenta Health. Our global focus is a consistent theme. For instance, just last week a delegation of 11 Atlantic companies—including seven from Nova Scotia, travelled to China to showcase their expertise at the inaugural Oceanology International Exhibition in Shanghai. The business mission was made possible by the Canada-Atlantic Provinces Agreement on International Business Development, of which ACOA is a partner. As well, we were able to provide some support for this Convention through this same funding mechanism. I note as well that ACOA is an active participant in this Convention. Gordon Deveau,  ACOA’s  Director  of  Innovation  and   Entrepreneurship, will  be  taking  part  in  a  session  entitled,  “EUREKA  and  Canada—An Opportunity for International Industrial  Technology  Projects.”  That’s  on  Wednesday. In  just  a  few  moments,  we  will  be  hearing  from  Marc  St.  Onge,  this  evening’s  keynote  speaker.  I  had  the  pleasure of meeting with Marc last month and hearing first-hand how the company has grown and developed over the past few years. Our visit was capped off with a tour of their production facilities that were remarkable for a number of reasons not least of which   was   the   commitment   to   quality   control.   It’s   not   surprising   that   Ascenta’s   commitment   has   been   recognized by its global customers who are supplied from this small location here in Atlantic Canada. Beyond the strictly biomarine, Atlantic Canada has many stories from a marine resource industry perspective – remote sensing, development of support technologies for unmanned surface vehicles, onshore and sea-based aquaculture, and of course the National Shipbuilding Program. Now more than ever, Atlantic Canada is a great place to do business and ACOA is proud to be part of an ecosystem that encourages innovation and talent and supports entrepreneurs. Plus   que   jamais,   le   Canada   atlantique   est   un   excellent   endroit   pour   faire   des   affaires,   et   l’APECA   est   fière   de   faire partie  d’un  écosystème  commercial  qui  encourage  l’innovation  et  le  talent  en  plus  d’appuyer  les  entrepreneurs.   This ecosystem of entrepreneurial support is comprised of many federal and provincial partners. Certainly the importance of the National Research Council in particular cannot be overstated. On a specific note at ACOA—we’ve   recently taken this partnership one step further. As of last Thursday, some NRC staff from the Industrial Research Assistance—or  “IRAP”  program—have started the process of  moving  in  with  us  at  our  ACOA’s  offices  in  Halifax.   NRC-IRAP is Canada's premier innovation assistance program for small and medium-sized enterprises, and is regarded world-wide  as  one  of  the  best  programs  of  its  kind.  We’re  looking  forward  to  the  cross-pollination of NRCIRAP’s  hands-on  technical  expertise  with  ACOA’s  business  focus—to the benefit of Nova Scotia SMEs. Overall,  ACOA’s  support  to  businesses  in  Atlantic  Canada  over  the  past  five  years  has  had  a  considerable  impact  on  the   Atlantic economy. Each dollar ACOA has invested directly in businesses has generated more than $5.40 2 in gains. Labour productivity among ACOA-assisted firms has increased by an average of 5.4 per cent 3 a year. In fact, the Atlantic  region’s  GDP  has  been  estimated  to  be  almost $1 billion4 higher  than  it  would  have  been  without  the  Agency’s   programs and services. In closing, thanks to the organizers and the speakers. I look forward to meeting some of you over the course of the conference. 10
  • MARC ST-ONGE, CEO, ASCENTA HEALTH, CANADA “A Green Path to Blue Ideas” Key points of his presentation: • Ascenta founded in 2003 and has benefited for the past 10 years from one of the ocean’s   greatest   resources:   omega-3   fatty   acids.   Our   mantra   is   “health   of   people   and   planet”,  and  over  the years we have • “We  know  more  about  the  surface  of  the  Moon  and  about  Mars  than  we  do  about  the   deep sea floor, despite the fact that we have yet to extract a gram of food, a breath of oxygen  or  a  drop  of  water  from  those  bodies.”— Paul Snelgrove TED talk  “Census  of  the  Ocean”   • What we do know is that the Oceans provide 50-85%  of  the  oxygen  in  the  Earth’s  atmosphere.  Each  breath  of  air   you take is made possible by this microscopic life under the sea. (Source: • It’s  without  doubt  that  the  ocean’s  possess  the  answers  to  many  of  the  world’s  greatest  problems. • We are entering an exciting era of ocean exploration. From 2000-2010 the Census of Marine Life, labeled as a “decade  of  discovery”  brought  together scientists from around the world to explore and quantify marine diversity. It creates a baseline from which change can be measured (but a baseline that arguably is made at a time of unprecedented change in our oceans).1200 new species discovered, increase estimation of species in ocean from 230,000 – 250,000. We are just scratching the surface. (Source: • The reality is our oceans are still wild and we rely on them heavily for essential resources such as food.In fact the oceans provide the largest source of wild protein.This is particularly important in developing countries where food security and subsistence fishing are important parts of basic survival. The health benefits of wild seafood cannot be matched, and much of our industry relies on wild stocks for primary product. Few of us would have successful businesses without the resources that the oceans produce. (Source: • Throughout the history of human civilization we have been dependant on the ocean for food, raw materials, and transport.  The  rapid  growth  and  development  of  the  past  century  is  unprecedented  in  human  history.  Our  “human   machine”  continues  to  build  speed,  which  for  the   most part elicits a sense of awe and excitement. But without a good understanding of where you want to go, fast quite often comes at the expense of far. • We know the impacts we have had on the ocean – the most obvious is overfishing and habitat destruction, but there are even more alarming and persistent impacts that include pollution from land based activities and ocean acidification as a result of increasing CO2 in the atmosphere. Are we already too close to the edge? Despite our scientific advances and vast amounts of data nobody really knows the answer to that question. • Overfishing – an example very close to home. In Atlantic Canada, we experienced not only the largest collapse of a fish stock in the world – but the largest collapse of biomass. We did this within a 25 year period. Despite management attempts, the cod have not recovered. 11
  • • The responsibility lies directly with poor management, with expecting that the oceans would continue to provide, despite warning signs to the contrary. Failure to heed those warning signs resulted in social and economic catastrophe for coastal communities and fundamentally changed Atlantic Canada. • We now have a marine food web that is dominated by crustaceans – shrimp, lobster, crab – and small pelagics. A complete flip of the system we had just a few decades ago. • The collapse of the North Atlantic cod fishery is not an isolated incident and ecologists are predicting many more ecosystems and food webs to flip in coming years. • The impacts of fishing on sea floor habitat. Here is a photo of bycatch of deep sea coral in the Canadian Arctic.These corals live for centuries and can be up to 2 m tall - “the  redwoods  of  the  ocean” Source: DFO photo, 2006 shrimp trawl survey • This is what plastic pollution looks like in some coastal areas. By not addressing the increasing amount of plastic in our ocean, we are threatening not only the natural resources upon which we rely, but the ability to ensure that our products promote health, as these toxins accumulate in the ecosystem. (Source: • Plastics never die! Just gets smaller and smaller. Plastic breaks down in our oceans, and accumulates in the water column  and  on  our  beaches  in  small  particles  called  “microplastics”.  These  resins  contain  high  levels  of  PCBs  and   other toxic agents which cause a broad range of adverse effects in biological systems and bio-accumulate up the food chain. • Recent examples of the magnitude of the problem: In the north Pacific Central gyre, researchers found 6 times higher abundance of microplastics than zooplankton. (Source: May 2013 Blog by Dr. Hideshige Takada, Environmental Organic Geochemist, Tokyo University of Agriculture and Technology and Founder of International Pellet Watch (IPW). • Here is a simple diagram of how ocean acidification happens. • CO2 is emitted. • it is dissolved in water. • Acid breaks down into bicarbonate and hydrogen. • Hydrogen reacts with carbonate in organisms with calcium based skeletons (coral, shellfish, diatoms). • The reaction impairs growth and reproduction and eventually leads to disintegration. (Source • The impact of acidification is only starting to be felt, largely on coral reefs, where restoration efforts are near impossible,  even  when  land  based  nutrient  run  off  is  decreased  or  mitigated.  We’ve  often  relied  on  the  idea  that   with renewable resources we can restore them, and we can, with better management and changes in behaviour. While fisheries restoration has been challenging enough, the impacts of acidification have little to no chance of being mitigated or reversed, without a massive and immediate change in human societies and economies. (Image Source: – Smithsonian Institute) 12
  • • There are only 3 important questions in business – Why, What, and How. • The world of business is pre-occupied with only 2 – What? and How? • There will be lots of engaging discussions over the next 3 days pertaining to What and How. • I’m  hoping  that  we  can  change  this  and  reconnect  our  business  agenda  by  linking  back  to  “Why?” • Venture   capitalist   and   author   Guy   Kawasaki   asserts   that   your   #1   goal   for   building   a   great   business   is   to   “create   meaning,  not  money”.  Apple  computers  is  in  the  business  of  making  meaning,  the  byproduct  of  such  is they make a lot of money. • How do we want to be involved in changing how primary resources are extracted from the ocean? • How can we learn from past experience in fisheries management – both failures and success? • Can we collaborate around demand, find better uses for the resources, higher value, and ensure we are feeding back into the natural ecosystem? • The challenges of our stressed and changing ocean environment also creates new opportunities to innovate, foster new growth, including remediation of the damage that has already been done. • Let’s  move  from  a  linear  flow  to  a  cyclical  flow  model • Over the past decade, there has been an ever increasing awareness both by consumers and by fishing companies and retailers that things need to be done differently. • Certifications started in the terrestrial system with organics (USDA) and Forestry (FSC) and more recently in the marine ecosystem (MSC) and there has also been significant attention to north –south trade and equity through the fair trade movement. • Most recently, there are aquaculture certification systems ASC (Aquaculture Stewardship Certification, Global Aquaculture Alliance). • How are we collectively supporting certification? Are we engaged in chain of custody, ensuring transparency to our customers? • A responsible company assumes responsibility and accountability for entire supply chain not just their position on the vertical. • The growing demand for seafood has lead to a rapidly expanding aquaculture industry, in particular farmed salmon. • The industry has faced several challenges – from conservation organizations who are concerned about the impacts of this type of high intensity farming on the natural marine ecosystem, including site specific impacts and the larger impacts of using wild fish for feed. • Additional challenges have included spread of disease, namely ISA (Infectious Salmon Anemia) and sea lice infestations which must be treated with pesticides which impact wild species, such as lobster. • Although progress is being made on these fronts the question   still   remains   “Can   we   produce   healthy   and   productive  fish  farms,  in  concert  with  healthy  and  productive  marine  ecosystems?” 13
  • Source:, • Squalene is derived from shark liver oil and used in vaccines, cosmetics, and is the active ingredient in shark liver oil products. Since the 1950s, shark populations have been in decline globally, with some species declining up to 90% in a few short decades. Sharks are often targeted specifically for their fins and their livers. While the biomedical / nutraceutical industries have traditionally sourced and extracted squalene from shark livers, there are alternatives from plant based sources, including olives, amaranth, wheat germ a few examples. • Here is a very specific example where a concerted effort by our industry to actively substitute shark derived squalene would have a direct impact on the markets for sharks and likewise would improve the success of management measures to reduce shark catches. Image Source: Myers et al 2007. • Efforts   to   establish   the   world’s   largest   Marine   Protected   Area   in   the   Antarctic   Ross   Sea   was   blocked   by   Russia.     How do we ensure that the science is not overridden by commercial or political interests? • A shining Nova Scotia example: Acadian Seaplants created the largest land based seaweed cultivation in the world, demonstrating innovation and sustainability, from an economic and environmental perspective. 14
  • HENRY CLIFFORD, VICE PRESIDENT, MARKETING & SALES AT AQUABOUNTY TECHNOLOGIES, USA "Feeding the Future with Genetically Modified Foods" Pasteurization, internal combustion engines, vaccines, in vitro fertilization, cloning, artificial   sweeteners,   evolution…….What   do   these   important   discoveries   and   breakthroughs share in common? They were all ground-breaking advances in science, technology, and human know-how, which contributed significantly to the betterment of mankind, and yet when each was first introduced, they were considered by some to be controversial, undesirable, even a threat to humanity. In each case, opponents of these important advances attempted to block their adoption, arguing that they were too risky, dangerous or unnecessary. And even today, there is still some lingering resistance to that last one on the list. But ultimately those opponents were proven wrong, and the breakthroughs were vindicated. Imagine what life would be like today without engines, vaccines, or pasteurized milk. How about a more contemporary list: stem cells, nanotechnology, in vitro meat synthesis, 3-D printing, human gene testing, all with tremendous potential for solving problems and improving the quality of our lives, and yet which are opposed by many groups, some for merely ideological reasons. Will their opposition also ultimately be judged as misguided?  Probably  yes,…but  only  time  and  perseverance  will  tell.  And  to  that  list,  we  can  add  genetically  modified   plants and animals, opposed by some for ideological or economic motives, but which carry tremendous potential for solving some of our most pressing food production challenges. The title of my presentation is feeding the future with GM foods. Genetically modified plants and their derivatives have played important roles in our diets, and the diets of domesticated animals, for the past 20 years. Thousands of products in grocery stores where we all shop contain ingredients derived from genetically modified plants, not to mention many of the pharmaceutical products, which we rely on. And now we have a chance to add genetically modified animals to the portfolio of technological innovations that will help us feed the future. We’ve  all  heard  these  statistics;  by  2050  the  human  population  is  projected  to  be  at  9.6  billion,  and  in  order  to  feed   that many people, we need to double global food production, and seafood, as a vital protein source, will have to be part of that increased production. We currently stand astride an historic moment when aquaculture is finally overtaking capture fisheries as the largest source of protein from the sea, just as in our distant past, animal husbandry eventually overtook hunting as our primary source of meat. And in 2011 the world quietly reached a milestone in the evolution of the human diet - for the first time in modern history, world farmed fish production exceeded beef production. The gap widened in 2012, with output from aquaculture reaching a record 66 million tons, compared with beef production at 63 million tons. More than just a crossing of lines, these trends illustrate the latest stage in a historic paradigm shift in food production—a shift that at its core is a story of natural limits, sustainability, and food preferences based on health benefits. There   is   little   doubt   that   the   world’s   fisheries   are   in   crisis.   We   reached   the   oceans   maximum   sustainable   output   of   about  90  million  tons  back  in  the  early  90’s,  and  now  aquaculture  has  the  potential  to  become  a  sustainable  practice   that   can   supplement   capture   fisheries   and   significantly   contribute   to   feeding   the   world’s   growing   population.   According to FAO projections, it is estimated that in order to maintain the current level of per capita seafood consumption, global aquaculture production will need to reach 80 million tons by 2050. The aquaculture industry is going to have to rely on innovative technologies to attain those production levels. If we reflect on the challenge of meeting a worldwide, growing demand for seafood, we cannot afford not to incorporate into aquaculture and 15
  • agriculture, innovative new technologies such as plant and animal biotechnology. But there are those who are actively working to block adoption of these new technologies. For those of you who are not already aware of AquaBounty Technologies, we are a biotechnology company dedicated to productivity enhancements in aquaculture using genetic engineering. Since 1989 we have been developing a genetically modified Atlantic salmon known as AquAdvantage Salmon, which grows faster than conventional Atlantic salmon and reaches market in approximately half the time. This photo depicts an AquAdvantage Salmon in the background, compared to a same age sibling Atlantic salmon in the foreground. AquAdvantage Salmon is currently under review by the U.S. Food & Drug Administration, and if it is approved as we expect, it will be the first genetically modified food animal approved for human consumption in the history of mankind. And it is merely the tip of the spear; because in many other countries there are other genetically modified animals being developed for human consumption, including other fish candidates for aquaculture. In order to mitigate environmental risk associated with the commercial deployment of AquAdvantage Salmon, we built multiple, redundant biological, physical, and environmental containment measures into the fish and its proposed culture methodology. For example, our salmon will be sterile, all female, and produced only in land-based, freshwater, contained aquaculture systems. So the salmon cannot establish reproductively active self-sustaining populations inside the culture system, or in the environment. These salmon will not be reared in sea cages. We are currently growing the salmon in the highlands of Panama, more than 120 km from the Pacific Ocean. Sterile, all female AquAdvantage Salmon are confined to a biosecure culture system equipped with 21 individual physical containment barriers, with a minimum of 11 in sequence. In addition, there is a natural thermal and ecological barrier around our project in the form of warm water temperatures and low ambient oxygen levels downstream from our facility, which are lethal to Atlantic salmon. Finally, even if the sterile, all female salmon were able to circumvent the multiple, redundant physical and ecological containment barriers and reach the Pacific Ocean, they would be unable to breed with any of the five species of Pacific salmon that inhabit the Pacific Northwest. For most rationale, objective observers, the multiple redundant, biological, physical, and ecological containment barriers built into our fish and its culture system would be sufficient to assure minimal environmental risk, but apparently it is not adequate enough for the activists and politicians who oppose our salmon. On numerous occasions members of the Alaska congressional delegation have disingenuously attempted to raise alarms over the hypothetical threat of a few sterile AquAdvantage salmon escaping from the highlands of Panama, miraculously avoiding the 21 physical containment measures and ecological barriers around our facility, and swimming thousands of miles across tropical seas in order to threaten wild salmon populations in Alaska, ignoring the scientific reality that Atlantic salmon cannot interbreed with any of the five species of Pacific salmon which inhabit the Pacific Northwest. The truth is these sanctimonious politicians are practicing parochial economic protectionism in an attempt to eliminate a low cost, more sustainable alternative to wild salmon, and to protect their local wild salmon fishing industry, which ironically exports 60-70% of their harvest to Southeast Asia, and which ironically is not in fact 100% wild, since a large percentage of their so-called wild salmon begin their life cycle in government operated hatcheries. We initiated the regulatory process with the FDA in 1995, and from 2001 to 2009 we submitted more than 10,000 pages in 28 scientific studies, making AquAdvantage Salmon one of the most scientifically scrutinized fish in the history of aquaculture. In addition to demonstrating that our salmon poses no environmental risk, in our technical dossier presented to the U.S. FDA, we also demonstrated that AquAdvantage Salmon is nutritionally equivalent to a conventional farmed Atlantic salmon, and thus does not present a food safety risk to the consumer. Now you would think that 18 years would be long enough for the FDA to conclude their scientific review of our technical dossier, especially since we have successfully complied with each of the technical elements required of us. In addition, in presenting the findings of their exhaustive review of our dossier to the independent Veterinary Medicine Advisory 16
  • Committee, or VMAC, the FDA essentially recommended that our application should be approved. And the VMAC committee  concurred  with  the  FDA’s  findings,  and  also  recommended  that  our  application  be  approved. So   why   hasn’t   it   been   approved?   It   has   been   suggested   that   political   interference   is   responsible   for   the   delay   in   approving   our   salmon.   This   protracted   regulatory   review   is   undermining   the   credibility   of   the   FDA’s   science-based regulatory system. In the   words   of   Dr.   Calestous   Juma,   at   Harvard’s   Kennedy   School   of   Government:   “It   sends   the   message to the rest of the world that the science-based regulatory oversight as embodied in the FDA review process is subject to political intervention. Furthermore, it signals to the world that the United States may forfeit its leadership position  in  the  agricultural  use  of  biotechnology.”  Compared  to  commercialization  of  GM  crops,  genetically  modified   animals are exposed to disproportionately high regulatory delay and considerable uncertainty. Regulatory uncertainty makes their commercialization in the United States prohibitively expensive and will inevitably drive this technology offshore to countries with more predictable policy environments. A similar fate may have befallen the genetically modified pig, known as Enviropig, which was developed here in Canada at the University of Guelph. With many laudable products in the research and development and regulatory pipeline, like the Enviropig and AquAdvantage Salmon, it is  not  in  society’s  interest  to  give  up  on  a  promising  set  of   technologies merely for lack of regulatory response, or to allow special interest groups or regional political selfinterests to interfere with what should be a strictly science based review. The science-based regulatory review of GE animals should be protected from political interference. Otherwise the technologies will shift to developing countries with more GM-friendly regulatory environments. There are more than 15 genetically modified animals currently under development in China including GM fish, and a GM cow whose milk will carry heightened levels of omega-3’s.   It’s   been   a   decade   since   China   first   authorized   the   commercial planting of four GM crops, but faced with land degradation, chronic water shortages, and a growing population that already tops 1.3 billion, China is turning to a transgenic green revolution to secure its food supply. In 2013 the Chinese government announced a plan to invest US$3.5 billion in an R&D program for genetically modified plants. And countries such as Brazil, Argentina and Panama have demonstrated much greater willingness to embrace these innovative products. All technologies pose both risks and benefits, and both the risks and benefits should be weighed equally. However, current regulatory review of GE animals emphasizes almost exclusively the risk of the new product, with very little evaluation of the benefits. No technology could survive a risk-only analysis, because all technologies have some inherent elements of risk. Even aspirin kills thousands of people each year; should we ban aspirin? Occasionally airplanes malfunction and crash; should we ban air travel? There are very few groundbreaking, paradigm shifting technologies that are completely risk free, and their benefits to society should not be overshadowed by scare tactics designed to mislead the public in the name of environmental protection. As  an  extension  of  liberal  environmentalism  and  the  health  food  industry,  opposition  to  GMO’s  has  taken  on  a  life   of its own, complete with its own form of junk science and scare tactics. A great deal of the web-based information on this subject is inaccurate, misleading or blatantly false. Critics have claimed GM food products are dangerous. But the research and scientific evidence contradicts their alarmist falsehoods. In the European Union, which is not exactly a traditional  sanctuary  for  GMO’s,  a  2011  summary  report  from  the  European  Commission  covering  twenty-five years of research involving 130 research projects and   500   independent   research   groups   determined   that   “There   is   no   scientific evidence associating GMOs with higher risks for the environment or for food and feed safety than conventional   plants   and   organisms.”  The   Commission’s   report   concluded   that   there   i s no evidence that GE foods have any harmful or long-term effect over multiple generations. A declaration signed by more than 3,500 scientists — including twenty-five Nobel laureates — reiterates this position. The World Health Organization, the American Medical Association, the U.S. National Academy of Sciences, the British Royal Society, and every other respected organization that has examined the evidence has come to the same conclusion: consuming foods containing ingredients derived from GM crops is no riskier than consuming the plants modified by conventional plant breeding. And the potential benefits to society are immeasurable. Worldwide, 70 per cent of all water is used for agriculture; 17
  • water consumption has doubled during our lifetime; still, 1.3 billion people do not get enough drinking water and this number could double by 2025. So the potential benefits of transformational genetics in agricultural biotechnology, for example drought resistant or drought tolerant GM crops, will be indispensable. We cannot allow the technophobes and luddites to impede work in these important areas. The agricultural challenges of feeding 10 billion people are sufficiently gargantuan that we are going to need every biotechnology available. At the very least GM animal applications should be weighed on a case-by-case basis and assessed for merit, and not subjected to a universal ban for all applications. Much of the opposition to GM foods is coming from the organic food industry, which apparently is feeling threatened by a more productive, lower cost, food production alternative than what they offer. And despite the growing recognition that organic food is not any safer, tastier, or more nutritious in spite of the higher price, their advocates continue to clamor for foods that  are  produced  the  old  fashioned  way  on  the  small  family  farm.  Please  tell  me…in  what   other   sector   of   our   economy   do   we  encourage   the   greater   use  of   yesterday’s  technology?   The   organic  food   advocates   bemoan the increased use of genetically engineered seeds, implying that farmers are naïve helpless suckers who have been   taken   in   by   Monsanto’s   propaganda.   The   fact   is   that   farmers   are   shrewd   business-people who switched to genetically engineered soybeans, for example, because of the savings in fuel and herbicides and the environmental benefits of no-till seeding. In 2012 17 million farmers in 28 countries grew a record 420 million acres of GM crops, and for the first time in history, last year there was more GM plant production in developing countries than in developed countries. Are they all hapless boobs mesmerized by GMO propaganda? I do not think so. In reality the ideal formula is a strategic combination of conventional, organic, and GM food production technology. In fact many experts would argue that GM food production is a natural complement to organic food production. That is the argument proposed by Dr. Pamela Ronald, a plant geneticist at the University of California Davis, and whose husband   happens   to   be   an   organic   farmer.   In   her   book   “Tomorrow’s   Table”,   she   argues   that   a   judicious   blend   of   genetic engineering and organic farming is the key to helping feed the world's growing population in an ecologically balanced manner. The challenge that farmers face, trying to provide larger yields without resorting to expensive or environmentally hazardous chemicals, could be facilitated by the use of GM plants. What could be more logical than to produce a disease resistant strain of vegetable using no pesticides or chemicals? Or to produce a fast growing GM salmon with no antibiotics, or a fast growing GM cow with no growth hormones. And as we speak, aquaculture researchers are developing GM animals for enhanced productivity. Researchers at the University of Rhode Island are developing a transgenic trout with more muscle than a conventional trout. A company in the USA is developing a transgenic shrimp that will be more resistant to disease. China is working on a low feed conversion transgenic carp. And   last   week   it  was   announced   that   AquaChile’s   Verlasso   Salmon,  which is fed an omega-3 rich genetically modified yeast  developed   by   Dupont,   which  in  turn  allows  it   to   reduce  its   “fish  in  to  fish  out”   ratio  to  less  than  1.5,  was  the  first   farmed   salmon   to   receive   a   thumbs   up   from   the   Monterrey   Bay   Aquarium’s   Seafood   Watch. A British company has developed and is field-testing a transgenic mosquito designed to eradicate dengue fever. And there are numerous pharmaceutical applications of GE animals. The possibilities are practically unlimited for life enhancing benefits of GE animals. I submit to you that if Thomas Edison were alive today, and he was attempting to introduce to society his marvelous new invention, the electrical light bulb, he would very likely be opposed by activists from the American Darkness Society, he would be sued by vulture law firms representing the gas lamp industry, and legislative initiatives blocking his innovative new product would be proposed in Washington by politicians representing the candlestick industry in their districts. Now imagine if they had all been successful in blocking adoption of the electric light bulb. That is what genetically modified foods are facing today. We must collectively find the wisdom to allow GM technology to flourish. 18
  • VERONICA MCGUIRE, EXECUTIVE DIRECTOR, PROGRAM, REGULATORY AND TRADE POLICY, CANADIAN FOOD INSPECTION AGENCY, CANADA I t gives me great pleasure to be here today at the BioMarine International Business Convention. To begin, let me extend my sincere appreciation to the organizers for putting together this forum and to all participants for your presence here today. My aim this morning is to share with you   some   thoughts   on   the   Canadian   Food   Inspection   Agency’s   Transformation   Agenda   (regulatory  modernization  initiative),  and  on  the  Agency’s  long-term vision. The  Agency  is  dedicated  to  safeguarding  Canada’s  food  supply  and  protecting  animal  and  plant  health.    As  a  regulator,   we value scientific rigour, and professional and technical competence. We work with consumers, industry, other governments and public partners. Together, we protect Canadians from preventable health risks, implement food safety measures, and promote systems that maintain the safety and security of  Canada’s  agriculture,  aquaculture,  fisheries  and  forestry  sectors. We operate in a complex environment, and we share our role and responsibilities with other government departments, provinces and territories. The Agency works with Fisheries and Oceans Canada to deliver the National Aquatic Animal Health Program, which addresses aquatic animal diseases of finfish, molluscs and crustaceans. We are responsible for certifying exports of aquatic animals in order to maintain access for existing aquatic animals and seafood markets. We secure entry to new markets by negotiating practical, cost-effective and science-based export conditions. We also establish standards and labelling requirements for finfish species raised for use in animal feed. As an organization dedicated to protecting the health and safety of Canadians, we continuously strive to improve and to excel as a science-based regulator. Our goal is to be trusted and respected by Canadians and the international community. And as a result of our efforts, Canada has one of the best food safety, animal and plant health systems in the world. However, global supply chains are changing the way agricultural and agri-food products are processed, packaged, distributed and sold. Consumer demands are also changing. Canadians want more information and their expectations of industry continue to increase. In   this   rapidly   evolving   environment,   we   must   constantly   ask   ourselves   how   to   maintain   and   improve   the   Agency’s   performance while managing food safety, animal and plant health risks. Vision for the CFIA The  Agency’s  long-term vision is for a stronger focus on prevention and compliance, a citizen centred service delivery culture, with optimized internal performance, and highly competent professionals. The Agency is pursuing a comprehensive transformation agenda to help us move toward this vision, with the goal of allowing Canada to modernize and adapt to consumer, global and scientific trends. 19
  • A   key   component   of  the   Agency’s   transformation   agenda   is   our   regulatory   modernization   initiative.     It   is   a   systematic   approach  to  modernizing  all  of  the  Agency’s  regulations over 10 years, taking a science- and risk-based approach to protect human, animal and plant health, while not hindering trade. The   initiative   offers   an   opportunity   to   better   align   our   regulatory   frameworks   with   the   Canadian   government’s   priorities regarding economic prosperity and border security. And at the same time, the Agency is taking this opportunity to refocus our activities on our core mandate—health and safety. Themes Our regulations have helped Canada achieve a world-class food safety system that is supported by internationallyrecognized expertise in animal and plant health; yet, the traditional approach to regulation is increasingly described as a barrier to economic growth and competitiveness. But why is that? Regulation strengthens investors’   and   consumers’   confidence,   which   helps   foster   uptake   of   new   products   and   processes, and creates certainty for your investment planning and execution. The regulatory modernization initiative is, at its foundation, an opportunity to develop more clear and concise regulation. This will help establish a common vocabulary and agreed upon definitions that can then act as a basis for dissemination of information within the marine sector and to your customers. Ultimately, regulation helps create both a level playing field in the domestic market and builds international coherence towards open export markets. Rather than a barrier to competitiveness, I challenge you to think of regulation as an enabler—as creating a supportive environment for industry. 1. Changing Roles Part of the regulatory modernization initiative has been to re-examine  the  Agency’s  role.    The  Agency  also  promotes   compliance to ensure that regulated parties fully understand their obligations. We continue to work with international governments and standard-setting organizations to align international standards, rules and procedures, and facilitate market access. The Agency helps industry understand and comply with requirements, but industry is accountable for ensuring the safety of its products and processes. Going forward, the Agency expects that industry will assume greater responsibility for safety, and will continue to work towards identifying, understanding, mitigating, and eliminating risks. 2. Modern approach to regulation The Agency is committed to a more systematic and concerted approach to developing and implementing regulation; one that employs more outcome-based regulation where appropriate. Outcome-based regulation places greater emphasis on specific and measurable outcomes and less emphasis on prescriptive provisions. It specifies what to achieve and how compliance will be measured, but does not prescribe how to achieve an outcome. It affords you the opportunity for innovation, and provides flexibility to introduce new technologies, processes, and procedures that enhance safety and/or reduce costs. The flexibility of outcome-based regulation is also an enabler. If you develop a new process that allows you to reduce your energy costs, provided you continue to achieve the regulatory outcome, we will not prevent you from using that new process simply because it is unfamiliar. You are enabled to make decisions about your business based on your expertise and experience. 20
  • 3. Evolving relationships The   Agency’s   relationship   with   industry must evolve as agricultural and marine sectors in Canada, and around the world, continue to become more complex. Industry associations can facilitate this evolution by providing advice to members regarding how to achieve modernized regulatory requirements. There is an important role for industry associations to help drive and disseminate consensus among their members on key trends, activities and approaches in the sector. The Agency will continue to work with these industry leaders and other government departments to build forums for discussion. Our relationship with Canadians must include more communication and greater trust. The Agency is promoting a culture of engagement with key representative associations from various sectors though our transformation agenda. An informed public—able to identify and manage risks—will play a key role in protecting human, animal and ecosystem health. The transformation agenda will allow us to enhance our service culture and engage with stakeholders to provide service excellence. Opportunities and greater pressures will exist for alternative service delivery to make resource production more efficient and improve program delivery. We will maintain our oversight responsibilities but will leverage partnerships to deliver alternate service through independent parties, other departments or other levels of government where feasible and practical. 4. Enhanced transparency Transparency is important to citizens and to industry. The Agency will communicate with stakeholders so that they know what to expect in services delivered by us, and what they can do when they are not satisfied with the standard of service they receive. We have developed a Statement of Rights and Service for Producers, Consumers and Other Stakeholders, as well as six accompanying inspection guides. These documents offer clear, plain language explanations of our commitment to transparent decision making, accessible and timely information, fair, respectful and unbiased interactions with stakeholders, and responsiveness and continuous improvement. We aim to improve service delivery by offering a suite of service-related and transparency initiatives. This includes establishing service standards and user fees that reflect the cost of service delivery, and facilitating easier access to information about the outcomes of our regulatory and enforcement activities. The   open   consultations   under   the   Agency’s   transformation   agenda   present   an   opportunity   to   integrate   stakeholder   views into the modernized regulations. Conclusion As  we  tackle  the  Agency’s  transformation  agenda  over  the  coming  months  and  years,  please  consider  the  following: First, industry is accountable for ensuring the safety of its products and processes. The Agency expects industry to exercise enhanced due diligence to identify, understand, mitigate, and eliminate risks going forward. Second, we are committed to a more systematic and concerted approach to developing and implementing regulation; one that employs more outcome-based regulation where appropriate. Third, our relationship with industry and Canadians is changing to include better communication and greater trust. We ask that you engage with us on our transformation agenda though various consultation events and activities. 21
  • We are dedicated to transparent decision making, accessible and timely information, and fair, respectful and unbiased interactions with stakeholders. Again, I challenge you to imagine regulation as an enabling force. With these final thoughts, let me take this opportunity to wish you a productive discussion. Thank  you.” 22
  • THAD SIMONS, CEO, NOVUS INTERNATIONAL INC., USA T hank you Pierre and thank you Veronique, thank you to all the organizers for BioMarine. This is my second time to be able to attend Bio Marine and as I was thinking   about   the   past   few   days   and   all   the   different   presentations…and   the   challenges that we are facing, Francisco left you with a question of why are we here. Why do we come to Bio Marine and what do we gain from it? I think as far as Novus goes; I would put it back in terms of the Novus vision. Twenty-Two years ago we started as a company and we started with a common vision. A rather bold vision for a small company of about $200 million dollars in annual sales and selling one product and primarily selling that one product into the poultry industry. That one product being an important product, Methionine amino acid, which is essential to life and definitely essential to the poultry industry. And that vision, we established that vision helping to feed the world wholesome and affordable food, and I think that has been very important to Novus as an organization to be a rallying and organizing theme; a purpose statement if you like, for us as an organization as we have grown. We have grown quite extraordinarily over the last 20 years to over one billion dollars in sales. Still most of that to poultry industry, and if you think about it, this is the way in which the evolution has happened in terms of livestock and terrestrial production. It has been an incredible ride if you think of how much that industry has grown over twenty years and we have grown along with it. If  we  go  back  to  something   like  the  1960’s  the  feed  efficiency  that  we  had  then  in   poultry  was  3.2  so  it  took  over  3   kilos of feed to produce  a  kilo  of  chicken.  Today,  it  is  half  that  amount…1.6.  So  to  optimization  that  we  have  able  to   achieve in that industry over time, by putting the resources into technology, and by actually working together, and that goes all the way across from processing and value added a whole new branding. If you think back thirty years ago and you would go into the supermarket there was unbranded chicken and basically whatever was there was whole chicken. And today, at least in the US and I think in Europe it is very hard to find a whole chicken. You are going to find all the value added and branded pieces. This is where our industry here, we need to go. We need to think about the consumer. That consumer is really missing here in the audience today. My wife is not  here  so  I  can  pick  on  her…but  last  night  she  was  at  the  dinner  and  Darren   was commenting to me saying is that consumer that we need to appeal to. We need to think about it when the consumer is going in, and the chicken industry has already done this. They have done this very effectively and they have been able to grow and they have been able to afford to put the investments in that have been necessary for their part in helping to feed the world. If   we   don’t   do  that,   as   the   video   shows,  we   are   going   to have difficulty actually being able to achieve the goals that we have as an industry to be able to produce the amount of protein that is going to be required. We have heard about the 9 billion people over and over again but we need to dissect the 9 billion people a little bit. Because we know that well over a billion of them, more of them actually suffer from obesity; and all the issues from over  nutrition  if  you  like…but  still  very  malnutrition  and  poor  nutrition.  And  those  people  are  living  here  in  Canada and they live in the United States, they live in Europe and increasingly we find those people living in the developing world. You actually know that the diabetes is higher, and the number of people with diabetes is higher in India and China than in the United States. So increasingly we have an issue with lack of nutrition being both lack of calories and poor  nutrition.  What  we  can  do  in  our  industry…in  aquaculture  is  really  help  to  solve  that  problem  both  in  terms  of   making sure that people have adequate calories but also making sure that they have the right calories and they are good calories. And that they can be affordable, which is very important. So it is not only producing fish for the rich, it is making sure that we are thinking about how we are actually going to raise up the production level and access to fish all around the world. We heard several times also in terms of sustainability. There are so many different ways, and so many different concepts of is sustainability. But I think if we always think in terms of how are we going to do more with less, how are 23
  • we going to reduce the impact on the environment with what we do, and how are we going to make sure that it is always available to everyone? We can start achieving some of those elements of sustainability. Al mentioned to us that he is very focused on Energy, and fish really allow us to have the minimum of energy input. That is true. That is a very important measure of sustainability. But  one  I  don’t  know  why…maybe  because  it  is  obvious  to all of you that fish live in water. But of course you realize that the biggest constraint we have in terms of increasing food production is water. And the most efficient species or protein source to use water is fish. If we are going to be able to produce the food that we require, we have to be able to use the oceans to be able to provide that. There is not enough airitable land and definitely not enough bottled water to be  able  to  achieve  what  we  need  to  achieve  in  terms  of  protein  production…but  there  is enough water in the oceans. So I think that I want to encourage all of you to think about why did we come here, and what do we want to take away from this experience at Bio Marine? And what do we want to take next year as we go to Portugal? I think we can take lessons from the poultry industry and they can guide us along the way. But actually we can achieve more than they ever achieved. We can achieve a higher level of efficiency, we can have less of a carbon and water footprint, we can actually do more than they were ever able to achieve. But we can only do it if we work together in support of understanding consumers and understanding their consumption and why they would eat more fish. So it is not whether the fish is coming from the ocean through the fisheries, it is not whether it is coming from a pond system or a closed system, or whether it is coming from a marine based system. We as an industry need to support ALL ways in which consumer see that fish is important in their diet and important to feeding the 9 billion people, and in doing that in a way which is the same. So that is my challenge to you as we go forward into next year and as we come back next year in (Portugal), I am looking forward to that very much. It should be a great attempt, and I think that we have already talked about we need to have next year policy people, I also want us to have some people who are more from the retail, and maybe just a few consumers. You know really the people who are buying the products that need to understand what we are doing.  So  those  are  my  recommendations  Pierre  and  Veronique  and  even  friendly  NGO’s.  Let’s   broaden  the  audience  a   little bit more, and get a little bit deeper dialogue and maybe even a few sparks flying next year. Thank you! 24
  • MONA ELISABETH BRØTHER, NORWEGIAN AMBASSADOR TO CANADA, NORWAY “The  sea  unites  us.  The  blue  revolution” O nly  two  percent  of  the  world’s  food  production  comes  from  our  Seas   and Oceans. We know that Seas and Oceans cover 70 percent of the Earth. We are therefore using 30 percent of our planet surface to produce 98 percent of the food. Further growth in the biomarine industry relies on a sustainable management. The  ocean  and  seas  and  its  resources  are  the   backbone  of  Norway’s  economy.  Our   economic zones are 7 times the size of our land area. Our seas are very productive, both the shore with the kelp and fishstocks, the shelf with its oil and gas resources, and the waters with large renewable fish stocks. Therefore it is vital for Norway to play an active role on the international arena when global agreements and instruments like the Law of the Sea, and the Code of Conduct for Responsible Fisheries are negotiated. First and foremost we build our decision-making system on scientifically based knowledge. Over time, our national policy on fisheries management has been changed and improved based on what we have learnt. An important tool is also the robust management regimes we have developed in cooperation with our neighbouring countries, like for instance Russia. Both the seafood and the biomarine industry need to have the perspective of eternity, and thus a regard for the future generations. This responsibility mainly rests on the shoulders of the industry, but it is crucial that the authorities and politicians also engage in these important questions. Sustainability is said to be the capacity to endure. Given this perspective, we must remember that the concept of sustainability encompasses more than concern for the environment. Social and economic aspects must also be taken into consideration, and there must be balance between the three. We need ideas which have the potential to produce innovative solutions for the biomarine industry of the future. Many have pointed to the need for a stronger cooperation between the offshore industry, the maritime and the marine sectors to facilitate such a development. Multipurpose coastal planning is one such key. The needs are many. One example is the need to develop new sources of fish feed. Algae, plankton and plants are potentially alternative raw materials. This development need to maintain seafood's nutritional benefits for the consumer, as well as the health and welfare of the farmed fish. Norway is keen to learn from the experiences of others and, vice versa, we hope that our own experiences can help other seafood countries to develop their biomarine industry. A useful platform might consist in establishing a common understanding of the challenges and opportunities facing the seafood industry. To that end, a conference such as this provides a valuable arena for dialogue between researchers, technology developers, producers and regulators. Norway in Canada is the maritime sector. Our fishfarmers, our oil companies, our explorer ships in the north. Our common arctic history, and all technologies for the high north, that is our brand. The sea unites us; it is our common challenge. I hope that firms, persons and institutions have found each other in this conference; that the love for the sea, and for the coastal population and their sound economies, will be a platform to provide the world with sustainable food and other sea products. Everything starts with a persons creativity. The Norwegian government, and the Embassy, can be the link you need to make things happen. 25
  • PAUL BUNJE, SENIOR DIRECTOR, WENDY SCHMIDT OCEAN HEALTH XPRIZE, XPRIZE FOUNDATION “Ocean Health and the Economic Value of Marine Biology Resources - Innovation to Inspire Ocean Services: the Wendy  Schmidt  Ocean  Health  XPRIZE” Building a Vision to Address Ocean Grand Challenges: In order to achieve Great Impact o i.e. Healthy, Valued and Understood Oceans We must Catalyze Sustainable Industries o E.g. Transport, Communications, Natural Products, Aquaculture, Information Services, Food, Energy, Protection, Restoration By uniting breakthroughs o E.g. Oil cleanup, ocean health, ocean mapping, etc. BioMarine Resources are Diverse, Biomarine Industries must be Diverse Convening Forces are needed: forces such as BioMarine and XPRIZE About XPRIZE The XPRIZE Foundation drives innovation and inspires the belief that we can create a better future. Our prizes target Grand Challenges and market failures by defining large problems and incentivizing competition to drive radical breakthroughs that benefit humanity. The Ansari XPRIZE began with $2.5M in seed money and a $10M prize purse, which led to $100M in research and development, yielding a $1.5B private space industry. XPRIZEs are an innovation model with a proud history. One of the best known incentive prizes is the Orteig Prize, a $25,000 purse offered by hotel magnate Raymond Orteig to the first person to fly non-stop between New York and Paris. In 1927, with the whole world watching, Charles Lindbergh won the prize and became a global celebrity. Prizes create benefits beyond the intended innovation Identify and mobilize new talent Prizes attract diverse talent worldwide, generate unexpected approaches, and reveal innovative system solutions Stimulate new approaches o o Prizes encourage teams to seek and develop breakthrough technologies Attract new capital to fund teams o Prizes create a clear goal and timeline that enables teams to attract outside funders Change public perception o Prizes change what the public believes is possible Strengthen markets and communities o Prizes convene powerful networks of diverse experts - and encourage the sharing of ideas, approaches, and best practices within this network 26
  • Ocean Acidification: A Grand Challenge • • • • • • CO2 is making seawater more acidic In the last 200 years, the ocean has become nearly 30% more acidic Ocean acidification is destroying marine life—and the health of our oceans—at an unprecedented rate There is an appalling lack of ocean data, particularly about ocean acidification We  don’t  possess  the  tools  to  sufficiently  measure  ocean pH We  can’t  manage  what  we  don’t  measure The $2 million Wendy Schmidt Ocean Health XPRIZE is a global competition to incentivize the development of accurate, robust, and affordable pH sensors that will profoundly improve our understanding of ocean acidification Goals of the WSOHXP The winning teams will produce the most accurate and affordable pH sensors under a variety of trials that mimic the challenging conditions of diverse ocean environments Intended breakthroughs of the WSOHXP Inspire innovations in ocean sensing technology. Catalyze ocean acidification research. Catalyze the ocean services industry. Inspire the public to engage The $2M is divided into two $1M purses ACCURACY PURSE: For super-accurate sensors that will give scientists the ability to measure ocean acidification  throughout  the  world’s  oceans AFFORDABILITY PURSE: For affordable and easy-to-use sensors that will give anyone the tools necessary to track and respond to ocean acidification Competition Structure 22 month-long competition Four competition phases o Phase 1: Ocean Acidification Solutions Fair to promote innovation in ocean sensing o Phase 2: Lab Trials to measure breakthrough performance in a controlled setting o Phase 3: Coastal Trials to assess performance and ease-of-use during real-world coastal challenges o Phase 4: Sea Trials for the five finalists of the Accuracy Purse to be challenged by an open ocean trial to sense the full profile of 3000 meters of ocean depth. Building a Post-Prize Industry is Critical Post-Prize Goals o Create new markets for pH sensors o Create new markets for ocean data Post-Prize Markets 27
  • o Direct Markets o New Markets Collaboration o Catalyzing a massive industry in ocean services for the growth of BioMarine industries and activities Creating Impact Solve technical barriers o by inspiring innovators o by inspiring new markets in ocean services o by focusing resources and communities Raise global awareness o of oceans o of innovative solutions to improve ocean health o of the value our oceans provide Build a community of innovators and donors o to incentivize teams o to inspire advocacy o to catalyze an industry o to leverage for ocean solutions Please Visit our Website to Learn More and SIGN UP TODAY Thank you. 28
  • ROMAN SZUMSKI, VICE PRESIDENT LIFE SCIENCES, NATIONAL RESEARCH COUNCIL OF CANADA N ous arrivons au terme de notre rencontre. Nous avons appris beaucoup et nous devrons maintenant prendre le temps de bien intégrer cette information. There are a great many people to thank; far too many to name. However, I do want to acknowledge our sponsors, whose generous support made this convention possible. I also wish to recognize my colleagues at the National Research Council of Canada and their co-organizers at BioTopics SAS for bringing this convention together and assembling such an outstanding program. I also want to thank our moderators, presenters, panelists and speakers, many of whom have travelled halfway around the world to share their expertise and experience with us. And I must also thank all of you — your participation is the true measure of success. I am sure I speak for many of us when I say that it has been a very interesting and informative convention. I leave Halifax with a greater understanding and appreciation for the remarkable potential of the biomarine environment and technologies to contribute to the physical and economic well-being of all of us who share this planet — to contribute even to the well being of the planet itself. Natural products, derived from the biomarine environment, are already well-established in the growing market for dietary supplements. Biomarine natural products are also increasing their presence and profitability as active ingredients in cosmetics and other personal care products. We are seeing greater advances in the discovery of marine natural products for application as active pharmaceutical ingredients — more and more new compounds are being approved for clinical trials and commercial distribution. This week’s  sessions  resonated  with  me  the  most.  While  there  is  progress  to  celebrate,  we  have  also  been  reminded   this week that very real challenges remain. Substantial investments and new partnerships are needed to fuel and accelerate the pace of innovation. We need to engage industry, governments, scientists and citizens alike. Now that we have a better understanding of the value of the resource, it is essential to protect the marine environment and its biodiversity; to grow the biomarine economy in a sustainable manner. The challenges may be significant, but this week provides reason for optimism. We leave Halifax not daunted by the challenge, but inspired by progress and the potential ahead of us: new acquaintances have been made; new relationships formed; and new partnerships planned. 29
  • The response to the special sessions on EUREKA and the interest shown in the collaborative possibilities offered by that global network is especially encouraging. At NRC we are very proud to be the coordinating body for EUREKA in Canada and I must thank our EUREKA panelists for being so generous with their time and expertise. Au   nom   des   organisateurs,   je   tiens   à   vous   remercier   de   nouveau   d’avoir   assisté   à   la   conférence   BioMarine   2013   et   d’en  avoir  fait  une  expérience  mémorable. Je   suis   convaincu   que   vous   souhaitez   vivre   une   expérience   similaire   lors   de   la   cinquième   convention   d’affaires   internationale BioMarine en 2014 qui se tiendra au Portugal – un pays qui entretient une relation historique et fructueuse avec la mer. I am sure you join me in looking forward to the 5th BioMarine International Business Convention in 2014 for an equally memorable time in Portugal— a nation with a great and historic relationship with the sea. Merci. Thank you. 30
  • SESSIONS REPORTS SESSION 1A: MARINE NATURAL PRODUCTS – DISCOVERY OF APIS FOR THE PHARMACEUTICAL INDUSTRY Sponsored by: Pr Russ Kerr Nautilus Biosciences, Canada Chief Executive Officer Michel Kuehnel Eurofins Gfa Lab Services, Germany Sales Manager Ted Suh Eisai, USA Director Integrated Technology Deniz Tasdemir Prof Natural Chemistry and Marine Biodiscovery, Ireland Jeffrey Wright Pr Marine Sciences, Pr Chemistry and Biochemistry Marbionic, USA Overview (by Russell Kerr, Nautilus Biosciences Canada, Inc.) Marine natural products (MNPs) are proving to have enormous value in a diversity of industry sectors. Organisms from diverse phylogenetic groups including sponges, coral, tunicates as well as bacteria and fungi have proven to be excellent sources of bioactive natural products. While MNPs have found application in the pharmaceutical sector for the last few decades, MNPs have more recently been applied to actives in nutraceutical and personal care products. Session 1A at BioMarine 2013 focused on the use of MNPs as active pharmaceutical ingredients (APIs). Yondelis is the brand name for a MNP known as ecteinascidin 743 which is used in Europe and Russia for the treatment of advanced soft tissue sarcoma. More recently, Halaven, a synthetic analog representing approximately half of the sponge natural product halichondrin B, was approved as a drug for metastatic breast cancer. Thus, MNPs have found application as drugs but more commonly these natural products have been of value as drug leads. In either event, MNPs continue to provide an exciting source of new APIs to help fill the drug development pipeline. 31
  • AVAILABLE PRESENTATIONS: Dr. Michael Kuehnel, Sales Manager, Eurofins GfA Lab Service GmbH, Germany “Omega-3  as  API  Past,  Present  and  Future” In 1963 Ralph T. Holman was the first scientist who named omega-3  fatty  acids  “omega-3s”.  He  remembered  his  visits   in the Sunday school  and  the  “Alpha  and  Omega”  he  was  told  about  as  young  child.  So  he  looked  at  the  end  of  the  fatty   acids (the omega) and searched for the first carbon double bond from back view. It was the third position in the carbon chain. Omega-3s are found in different species (plants, algae, krill and fish). Most popular are omega-3s from fish (anchovy, sardine, mackerel, herring, blue whiting, boarfishes, salmon, tuna, squid, krill) from different geographic regions (South-America (Chile, Peru); Europe (Scandinavia); North-America (Canada, USA); Africa (Morocco, South Africa); Asia (Vietnam); Antarctic) Jørn   Dyerberg   was   the   first   one   who   studied   the   “Inuit   paradox”:   “Inuit   eat   a   high-fat, high-cholesterol diet, but enjoyed  a  low  incidence  of   cardiovascular  disease.” He had a look at bleeding times and blood composition of Inuit and published 1971 his Lancet paper where he described for the first time in science the effects of omega-3s. Today we have more than 23,000 papers and more than 2,500 human clinical trials that deal with the effects of EPA and DHA (for  Aspirin,  almost  100  years  elder  you  find  “only”  52,000  publications  in  PubMed).   William E. Connor did in the late 1980s a starving study on Rhesus Monkeys of all omega-3s for 250 days. This led to impaired visual and brain functions. Brain biopsies showed extreme low levels of omega-3s and high levels of omega6s. With less than one week of fish oil supplementation omega-3 content began being restored and completely stabilized after three months. In 2003 he did the Mothers Milk Study, where ALA supplementation from flaxseed only slightly increased EPA levels but had no impact on DHA levels in breast milk. What   are   the   “The   Head-to-Toe   Healing   Effects”   of   Omega-3s? It is said that Omega-3s (might) have an effect on numerous diseases (ADHD / ADD, Age-related   hearing   loss,   allergies,   Alzheimer’s   disease,   dementia,   ARMD   (agerelated   macular   degeneration),   arthritis,   asthma…).   Proven   effects   you   can   find   for   all   kind   of  cardiovascular   diseases   (heart arrhythmias, heart attack, heart failure, high blood pressure) and hyperlipidemia. Actually there are three omega-3 drugs on the market for treatment of arteriosclerosis, obliterans and hyperlipidemia: Epadel in Japan since 1990, Omacor / Lovaza since 1996 (Europe) and 2005 (USA) and since 2013 Vascepa in the USA. In the moment 9 companies have omega-3 in their pharmaceutical pipelines in clinical studies and there is also a trend to concentrate the business (BASF has bought Pronova; DSM has bought Ocean Nutrition and Martek; Astra Zeneca has bought Omthera) 32
  • Prof. Dr. Deniz Tasdemir, Professor of Natural Product Chemistry and Marine Biodiscovery, Marine Biodiscovery Research Group, National University of Ireland, Galway, Ireland “Search for Potential Active Pharmaceutical Ingredients (APIs) in Warm, Temperate and Colder Waters” Marine resources are the most prolific sources of novel molecules with immense therapeutic potential. Marine natural product discovery has mostly focused on large, easily collectable macro-organisms from tropical and subtropical regions. Colder waters and deep-sea organisms have been neglected or were too challenging until recently. Cancer has been the mainstream of discovery efforts on marine natural products (MNP). Infectious diseases are regarded as   one   of   the   ‘grand   challenges’   of   the   21st century, and yet, pharmaceutical industry has reduced its capacity for anti-infective R&D. The situation is much worse in infectious parasitic diseases, e.g. malaria, which affect the poorest parts of the world. Although never been a research focus, marine organisms have yielded several antiprotozoal leads, e.g. manzamine alkaloids and plakortin type endoperoxides. The funds raised in the last decade, thanks to initiatives of non-profit organisations have supported several early or later stage antiprotozoal discovery projects on marine organisms. We aim to identify novel molecules from marine macro- and microorganisms (from warm, temperate and colder waters) that target vector-borne parasitic and other microbial infections. One major focus involves the identification of stage specific antimalarial MNPs. Liver stage (LS) is very useful for causal prophylaxis of malaria, as it is the first and obligatory phase in the human host, whose blockage prevents the transition to blood stage in which the clinical symptoms of the disease emerge. We employ type II plasmodial fatty acid biosynthesis (FAS-II) as a drug target, and search for the natural inhibitors of multiple FAS-II enzymes. We have identified novel antimalarial NPs that have better in vitro LS inhibitory activity than the control drug. The presence (and the structure) of a novel bioactive compound was determined at the extraction stage, by using sophisticated profiling methods (NMR, LC-MS). Many clinically used antiprotozoal drugs are failed anticancer drugs, or possess high antibiotic activity, thus giving multiple chances to academia and Pharma industry to invest in this area. The discovery and development of APIs from marine bioresources is an expensive research area that requires stateof-the-art facilities for sampling, chemistry, HTS, identification of the true origin of the MNPs and partnership with industry for commercialization of novel ingredients. With a marine territory of 220 million acre under the sea, over ten times its land area, extremely rich biodiversity in the most pristine waters of the Atlantic Ocean as well as Irish and Celtic Seas, Ireland has a vast potential for marine biotechnology. This potential has been recognized with the Sea Change National Marine Knowledge Research and Innovation Strategy (2007-2013). Marine biodiscovery and marine functional foods, the two pillars of marine biotechnology, were identified as areas of development for Ireland enabling the commitment of funds to two flagship projects, the Beaufort Marine Biodiscovery  Project   (€7.3   M)   and   NutraMara   Marine   Functional   Foods   Initiative   (€5.2M),   implemented   by   the   Irish   Marine   Institute   (MI),   or   MI   and   Department   of   Agriculture, Food and Marine, respectively. Beaufort Marine Biodiscovery project aims harnessing Irish waters for marine plants, invertebrates and microorganisms on the taxonomy, systematics/genetics; the development of analytical, culture, extraction, characterization techniques & screening processes for marine biochemicals with potential commercial applications as pharmaceuticals, biomaterials and for other biomedical applications. It has three partners, National University of Ireland Galway (NUI Galway; collection, taxonomy, extraction, dereplication, purification, structure elucidation and rapid in-house bioactivity screen), University College Cork (identification of microbial diversity within the macroorganisms by both culture and culture-independent methods, HTS antibiotic screening) and Queen University of Belfast (Northern Ireland, biomaterials for bone replacement & anti-biofilm agents). With MNP chemistry expertise and infrastructure in the Marine Biodiscovery Group at the School of Chemistry (UPLC-DAD-QTOF-MS, HPLC-DAD-ELSD, 400, 500, and 600 (cryoprobe) MHz NMRs, UV/IR spectrophotometers, X-ray diffractometer), the NUI Galway has a central position for the project. Through ship time access to research fleet of the Irish MI, hundreds of marine organisms have been collected from coastal and deep-sea areas and are being investigated. Interactions with industry are increasing. 33
  • Considering the currently dry drug discovery pipeline in the pharmaceutical industry, it is imperative for governments and industry to invest in this area, as marine organisms have the highest hit rates of bioactivity. With Europe’s   one   of   the   largest   water   territory,   diverse   marine   resources   in   coastal   and   deep-sea regions, plus the established infrastructure, critical mass of experts, Ireland is becoming a new hub for marine bioprospecting. This generates opportunities for collective endeavors with academic and industrial partners for translational research in the development of bioactive ingredients. Acknowledgement. Beaufort Marine Research Award is carried out under the Sea Change Strategy and the Strategy for Science Technology and Innovation (2007-2013), with the support of the Marine Institute, funded under the Marine Research Sub-Programme of the National Development Plan (NDP 2007-2013). Jeffrey L. C. Wright, MARBIONC, University of North Carolina Wilmington “The  Search  for  Marine  APIs:  Ask  Gene  for  help” An important component of MARBIONC research is the search for new leads for the agrichemical and pharmaceutical world based on compounds isolated from marine habitats. To this end we have accumulated a unique collection of culturable marine microbes, both photosynthetic and non-photosynthetic, that can be maintained and cultured under laboratory conditions. The approach of using culturable organisms as sources of new compounds, always ensures an adequate supply of target molecules without affecting the ecology of marine life. Currently, the collection represents almost 1,000 organisms and continues to expand as new organisms are collected. From a fraction of the organisms processed, over 125 natural products have been isolated and characterized, representing may different classes of compounds. In addition over 50,000 highly purified fractions have been prepared in a format ready for high throughput screening. However, are we finding all the compounds that are produced by an organism? We have turned to molecular genetics to help answer this question. Such a molecular approach can extremely useful in determining how many natural products an organism could potentially produce, or the genetic data could help in the structure elucidation of a natural product once the full genome of an organism has been sequenced. There is emerging evidence in the literature that cultured microbes have the genetic potential to produce many more compounds than we are finding. We have investigated this in a case study with a very productive bacterium that was isolated from sediment off the coast of North Carolina. Using classical chemical techniques we have identified five different families of compounds, resulting in the characterization of over 15 natural products. After the genome of this organism was sequenced, we have used this genetic data to help complete the identification of a new macrolactam. In addition the bioinformatics data indicated that the organism had the potential to produce at least another ten different families of compounds. From the structures of the other compounds that we predict from the genomic data, we can customize the purification process to isolate these compounds or alter the growth conditions to switch on the biosynthetic  genes  so  that  these  “cryptic”  compounds  are  actually  produced.  We  plan  to   use this genetic approach with other microorganisms of interest. In conclusion, the MARBIONC compound library represents a very diverse collection of natural products. We have a pipeline of compounds ranging from early-stage discovery (a novel antiviral compound) to preclinical (a new treatment for cystic fibrosis). With the help of various agencies and our own efforts we continue to work with and seek new industrial partners, in order to translate these discoveries into new marine-based new products and processes. 34
  • SESSION 1B: AQUACULTURE BUSINESS PERSPECTIVES Sponsored by: Steve Armstrong Chief Executive Officer Genome Atlantic, Canada Ross Butler Senior Vice President Cooke Aquaculture Inc., Canada Øyvind Fylling-Jensen Chief Executive Officer Nofima, Norway Patrick Lavens Business development & Innovations Director INVE Aquaculture, Belgium Thad Simons Chief Executive Officer Novus International Inc., USA Session Context: Many would argue that feeding the World is our most important and pressing global priority: The  UN  projects  that  the  World’s  population  will  reach  approximately  9   Billion  by  2050.    It  is  approximately  7.1   Billion today; that means adding 57 Million people per year on average between 2013 and 2050 By  2050,  the  FAO  projects  that  the  World  will  need  60%  more  food  than  we  have  ever  produced  ……..  but  on  less   land and with less water! So, what challenges and opportunities does that create for the aquaculture sector; what technological/scientific advances are needed, what are the road blocks and how can we mitigate risk Panelists were asked to frame their comments around five pillars as follows: o Key growth opportunities o Sustainability pressures o Growth Barriers o Balancing supply and demand o Social License 35
  • Key Topics Discussed: Growth & Diversification o Need for disciplined growth o A very small number of species dominate aquaculture production at the current time. While species diversification may seem necessary, caution is warranted for it may prove wiser to first optimize the production of species already prioritized, and only then diversify (using a science-based approach to do so) Volatility o There is an inherent volatility of the aquaculture sector and a myriad of factors that affect it from weather to disease and beyond o The key lies in developing enough balance and stability within our leading companies to withstand the inevitable volatility o ‘Industrialization’ of operations is a prerequisite for long-term sustainability. Need to leverage lessons learned from other livestock species – more specifically, how industrialization over time mandates much tighter control over input (i.e. feed) costs as margins abbreviate. Sharing of resultant best practices between regions is a prerequisite for true acceleration of growth Efficiency o For growth in the aquaculture sector to be sustainable in the long term, there is a critical need to make operations more efficient through effective disease control management and with optimized (and stagespecific) feeds and improved feed conversion ratios. An enhanced level of integration spanning from breeding centres, to hatcheries, to nurseries and farm production is a pre-requisite for growth. o Integration with other sectors will also be very important Co-exploration; aquaculture should consider collaboration with windmill parks, those in oil exploration and other industries o Vertical integration (or organized co-ops among producers) of the industry permits a number of opportunities  to  improve  production,  including  better  access  to  equipment  and  expertise  ‘in  house’  (i.e.   Veterinarians, technicians, etc) o Marker assisted selection, delayed sexual maturation, effective disease management including biosecurity and vaccination, traceability and environmentally-friendly management will be extremely important in the context of reducing business risk and ensuring product safety; essential that companies embrace new technologies to help with all of the above o Need a culture of continuous improvement. By adopting measurable outcomes with third party certification and audit systems, we can continue to monitor, measure and improve. Need to have an economic  ‘footprint’;  need  to  make  a  profit  but  need to improve efficiency to offer our products to more economic classes Regulatory Harmonization/Reform; International Cooperation o Harmonization of science-based regulatory paradigms would help establish a more level and predictable playing field. From a Canadian perspective, there is a dire need for regulatory reform and the development of a National Aquaculture Strategy o There would be value for all through an enhanced level of international cooperation in the context of supply and demand issues, and the coordinated development of new markets 36
  • The Human Element: Social License and Human Resources o The  Aquaculture  ‘Enterprise’  needs  to  ensure  consumers  see  the  value  of  local  production,  not  only  in  the   context of food supply but also in the context of socio-economic development (i.e. job creation particularly   in   coastal   and   rural   communities).   We   need   to   become   much   more   effective   at   ‘telling   our   story’,  thereby  ensuring  consumers  and  policy  makers  alike  understand  the  value  of  aquaculture   o It is extremely important to bring new talent into the sector – our youth need to see aquaculture as an attractive career choice bringing with them new ideas through which the sector can achieve greater and greater degrees of optimization. In parallel, we must retain the current talent and help them to embrace more modern/industrialized production processes. Raising the production skill level of farmers is critical but we also need to enhance their business skills along with their understanding of market conditions Special thanks to Peter Sykes, PhD, Atlantic Veterinary College - University of Prince Edward Island for his help in the note-taking. 37
  • SPECIAL SESSION: INNOVATION FORUM Sponsored by: PRESENTATIONS: ShellBond Used with Swine Waste as a Source of Natural Products: A Carotenoid Antioxidant John G. Hayes CEO ShellBond, LLC 612 McGinnis Lane Wilmington, NC, 28412, USA Telephone: 703-403-0193 Email: Website: Category of Innovation Project or Product Marine Natural Products Description of Project or Product Analyses of the bacterial composition of swine waste lagoon samples confirmed the presence of several purple nonsulfur bacteria (PNSB) species known to produce a variety of carotenoids. Analytical methods including high performance liquid chromatography (HPLC), mass spectrometry, and nuclear magnetic resonance (NMR) confirmed the identity of the dominant Carotenoid as spirilloxanthin, C42H60O2, with 13 conjugated double bonds. A two stage strategy has been developed to extract the high value antioxidants, including treatment of remaining waste water by ShellBond, yielding relatively clean effluent. Potential Applications in Industry The principal we advocate is to take advantage of the unique biological character of swine waste lagoons as a source of neutraceutical profit and better waste management. Laboratory testing demonstrates that spirilloxanthin has powerful antioxidant properties, comparable to if not better than lycopene. Antioxidants have many potential commercial applications; presently, we are exploring use of spirilloxanthin for preserving biodiesel fuels, among other uses. In addition, the bacteria that make this Carotenoid also synthesize vitamin B12, co-enzyme Q10, and likely other potentially useful and valuable compounds. Status of the Project or Product Prototype, test or pilot application Patent or other forms of IP Desired Cooperation with Industry in Connection with this Project Sale of idea or transfer of rights Licensing (manufacturing and marketing) Investment: Require approximately ($) 2 M 38
  • Molecular Diagnostic Assays for High-Throughput Analysis of Water Samples for Invasive Species Propagules Sarah Stewart-Clark Assistant Professor Dalhousie University Department of Plant and Animal Sciences, Faculty of Agriculture 58 River Road, Rm 100-12 Truro, Nova Scotia, B2N 3E5, Canada Telephone: 902-893-8072 Email: Category of Innovation Project or Product Aquaculture and Aquafeed Marine Biotechnologies Description of Project or Product Diagnostic molecular assays have been developed to detect eggs and larvae of 20 invasive species in a highthroughput capacity in water samples. Assays have been used to monitor water in Atlantic Canada since 2010 for invasive species. Assays have a sensitivity of 1 egg/larvae per 150 L of water. Potential Applications in Industry: Assays have the potential to screen water for many industrial applications including processing plant effluent, ballast water, environmental water samples, water samples surrounding aquaculture leases, government monitoring for AIS in harbours. Status of the Project or Product Project in development Desired Cooperation with Industry in Connection with this Project: R&D collaboration Investment: Require approximately ($) Fee for service Other forms of cooperation (Identify): Assays have been developed and have been used for AIS monitoring in Canadian waters since 2010. Looking for international partner/collaborators to develop assays additional target species as well as to adapt the use of this technology for their own applications (ballast water, effluent monitoring, environmental monitoring). 39
  • Carbon Sequestering Production of Australian Premium QC Seaweed Biomass Dr. Pia Winberg Director, Venus Shell Systems Pty. Ltd. Director, University of Wollongong Shoalhaven Marine & Freshwater Centre Venus Shell Systems 30 Victor Ave Narrawallee NSW 2539, Australia Telephone: +61 429 338846 Email: Website: Category of Innovation Project or Product Marine Biotechnologies Description of Project or Product Venus Shell Systems Pty. Ltd. is an Australian Company with a scientific grounding in marine biological systems. We have developed a clean-tech to biotech marine bio-actives   chain,   from   genetic   isolation   of   seaweed   strains   →   cost   effective controlled   production   →   uptake   of   excess   resource   streams   including   CO 2 →   marine   biomass   with   TARGETED   and   TAILORED   composition   for   diverse   markets   →   purified   bioactive   product   (Maritech®ulvan) for nutraceuticals. We have upstream resource partners, a site, downstream processing to market and ongoing R&D relationships with Universities. Potential Applications in Industry The range of biomass and extract applications from seaweeds encompasses pharmaceuticals, nutraceuticals, functional foods, animal feeds, agricultural products and novel biomaterials. However the current global production of seaweed biomass is poorly controlled in terms of quality and suitability for high-value applications. This area is ripe for industrial development as significant investment has been made into refinery and high value application research. The production of quality-controlled, Blue Carbon biomass for targeted markets is the barrier that we have overcome. Status of the Project or Product Prototype, test or pilot application Desired Cooperation with Industry in Connection with this Project Investment: Require approximately US$1,000,000 40
  • Algasol Renewables: Patented PhotoBioReactor (PBR) for the Low-Cost Cultivation of Algae Biomass Miguel Verhein Executive Director Algasol Renewables Po Box no 1, E-07190 Esporles, Spain Telephone: +16023211255 / +34609601000 Email: Website: Category of Innovation Project or Product Marine Biotechnologies Description of Product Algasol Renewables is a biotechnology company with a unique patented PhotoBioReactor (PBR) for the low-cost production of microalgae for biofuels and bioproducts. The technology is a flexible PBR floating on water that can be deployed on the oceans and non-arable land (in ponds). Our breakthrough PBR cuts the cost (CAPEX/OPEX) of growth systems and is the most environmentally sustainable and economically viable system for cultivating algae biomass. A worldwide patent covers all key aspects of the PBR technology. Current Applications in Industry Algasol’s   low-cost, resource efficient, and scalable PBR system enables access to numerous multibillion dollar markets. PBR end-users will generate significant quantities of valuable biomass at the most competitive price. For example, the aquaculture sector, including fishmeal and omega-3 fatty acids, provides opportunities to deploy the Algasol PBR in high volumes, exploiting the core competitive advantage of the technology – industrial scalability. Other markets include: biofuels, cosmetics, and nutraceuticals (human/animal health products). Status of the Project or Product Patent or other forms of IP (Identify): Floating PBR patent based on density difference with internal aeration – PCT NO: PCT/IB2009/000076 Desired Cooperation with Industry in Connection with this Project Other forms of cooperation (Identify): Supply/off-take agreements. Commercial sale of PBRs and supply of algae biomass (processed and unprocessed: human/animal nutraceuticals – fx. Fishmeal/Omega-3s - and other bioproducts from algae biomass. 41
  • Evaluation of a New "Green" Excipient for Cosmeceutical and Nutraceutical Applications Priyum Koonjul Director Commercialization, Life Sciences Valeo Management L.P 550, Sherbrooke West, Suite 230 Montreal, Quebec, H3A 1B9, Canada Telephone: 514-618-6663 Email: Website: Category of Innovation Project or Product Marine Biotechnologies Description of Project or Product - Natural product (based on chitosan (GRAS)) - Reliable source of raw material - Simple, cheap procedure - Not absorbed by the body - H2O soluble at all pH - Easy scaling-up for commercialization (no complicated equipment needed); scale-up feasibility assessment already done and proven positive - Biodegradable unlike most polyquaterniums used in the market - Anti-microbial properties - Bile acid sequestrant (BAS) properties for lowering cholesterol- nosecondary effects (constipation and/or diarrhea) C.F. BAS available on the market today. Potential Applications in Industry The   technology   is   a   platform   of   ‘green’   chitosan   derivatives   that   have   a   wide   array   of   applications.   Chitosan   is   a   marine biomass not dedicated to the food market, and subsequently is an under used reliable resource. It offers a great potential for the growing nutraceutical (BAS), cosmeceutical (personal care), wound healing (antibacterial properties) markets for economic diversification of the fisheries industry. This valorization will be beneficial to the coastal regions of Canada and elsewhere that already possess the infrastructure for production of high quality chitosan. Status of the Project or Product Prototype, test or pilot application Business plan, market launch Patent or other forms of IP (Identify): (PCT/CA2012/050399) Desired Cooperation with Industry in Connection with this Project: Licensing (manufacturing and marketing) 42
  • Commercialization of MAG-EPA as an API for the Treatment of Prostate Cancer Samuel Fortin President SCF Pharma 235, Route du Fleuve Ouest Ste-Luce, Québec, Canada Telephone: (514) 317-9347 Email: Website: Category of Innovation Project or Product Marine Natural Products Description of Project or Product Focused on omega-3 derivatives for cancer and inflammatory disease treatment. From our medicinal chemistry program focusing on omega-3 derivatives, three (3) lead compounds of the same family (MAG-EPATM, MAG-DPATM and MAG-DHATM) are currently in our preclinical development pipeline. Our most advanced compound, MAG-EPATM, will enter Phase II clinical trial in early 2014 and the preclinical in-vivo efficacy models of MAG-DPATM and MAG-DHATM are successfully completed. SCF Pharma is currently looking for a Pharma partner for the commercialization of the MAG-EPATM following the Phase II clinical trial. SCF Pharma is also looking for partners to initiate efficacy clinical trials with MAG-EPATM for asthma treatment and with MAG-DPATM and MAG-DHATM for colon cancer and lung cancer treatment. Potential Applications in Industry 1-Prostate inflammation and prostate cancer treatment with MAG-EPATM 2- Asthma treatment with MAG-EPATM 3- Colon cancer treatment with MAG-DPATM 4-Lung cancer treatment with MAG-DHATM Status of the Project or Product Business plan, market launch Desired Cooperation with Industry in Connection with this Project Sale of idea or transfer of rights Licensing (manufacturing and marketing) Develop the idea ready for market, preferably in a company in the following industry: Pharmaceutical industry 43
  • The Turquoise Revolution: Research, Development and Commercialization of Integrated Multi-Trophic Aquaculture (IMTA) and its Diversified Products Thierry Chopin Scientific Director of the Canadian Integrated Multi-Trophic Aquaculture Network (CIMTAN) Professor of Marine Biology, University of New Brunswick Canadian Integrated Multi-Trophic Aquaculture Network (CIMTAN) University of New Brunswick 100 Tucker Park Street Saint John, N.B., E2L 4L5, Canada Telephone: 1-506-648-5507 Email: Website: Category of Innovation Project or Product Marine Natural Products Aquaculture and Aquafeed Marine Biotechnologies Description of Project or Product In tomorrow food production systems, aquaculture will have an increasing share. However, the Blue Revolution needs to become the greener Turquoise Revolution by developing innovative technologies and practices with increased environmental sustainability, economic stability and societal acceptability. With Integrated Multi-Trophic Aquaculture (IMTA) farmers cultivate species from different trophic levels with complementary ecosystem functions in proximity. They combine fed with extractive species to take advantage of synergistic interactions among them while biomitigation operates. Potential Applications in Industry The IMTA concept has many variations adaptable to open-water/land-based, marine/freshwater, and temperate/tropical systems. The ecosystem services provided by extractive species should be valued as nutrient/carbon trading credits. Perceptions should change: nutrients are not necessarily wastes and recycling, encouraged on land/agriculture, should also be at sea/aquaculture. Business models should embrace the emerging Integrated Sequential BioRefineries (ISBR) concept. We are already taking an ISBR diversification approach for our IMTA products: seaweeds for human consumption/cosmetics/fishmeal partial substitution and eco-certified salmon. We are looking at freshwater IMTA and biogas production. Status of the Project or Product Other: Small c commercialization moving to capital C Commercialization Desired Cooperation with Industry in Connection with this Project R&D collaboration Licensing (manufacturing and marketing) Fee for service 44
  • Yeast Protein Concentrate; A Novel Ethanol Production Co-Product can Partially Replace Fishmeal in Aquaculture Feed Simon Davies, Professor (presenter) Plymouth University Email: & Peter Williams, Business Development Manager; Biofuels AB Agri Ltd. 64 Innovation Way Peterborough Business Park Lynch Wood, Peterborough PE2 6FL, UK Telephone: +44 (0) 1733 422744 Email: Website: Category of Innovation Project or Product Aquaculture and Aquafeed Description of Project or Product The Canadian bioethanol industry produces over 2 billion litres of ethanol per annum. Besides ethanol these plants also produce over 2 million tons of animal feed (Distillers Dried Grains and Solubles (DDGS) a feed nearly exclusively used in cattle diets. Yeast protein concentrate (YPC) is a new high value yeast plus protein supplement, produced in a novel  “bolt  on”  process  from  a  dry  grind  bioethanol  plant.  The  product  formed  by  recovering  the  yeast  generated  in   the ethanol process plus a proportion of the grain protein is an excellent new high value protein source for aquaculture diets. Potential Applications in Industry Recent raw material prices have placed significant pressure on the profitability of grain ethanol production. YPC production from a corn based ethanol plant will hedge against both rising raw material grain prices and also pressure on the price of ethanol. Furthermore YPC production would provide the Canadian aqua, pet and animal feed industries with a specialist high value protein supply as an alternative to fishmeal. The production of fishmeal from marine harvested fish is unsustainable; YPC is a more sustainable alternative to fishmeal for the aquaculture feed industry. Status of the Project or Product Business plan, market launch Desired Cooperation with Industry in Connection with this Project: Licensing (manufacturing) Investment: Require approximately ($) – Highly dependent on production capacity Other forms of cooperation (Identify):Take off agreement with ethanol plants; Supply agreements with aqua feed producers 45
  • SESSION 2A: MARINE NATURAL PRODUCTS AND ENVIRONMENT Laurent Bellavance Chief Executive Officer Maritime Technopole of Quebec, Canada Kim Doiron ISMER, Canada John Hayes Chief Executive Officer Shellbond LLC., USA Jean Christophe Sergère Chief Executive Officer Setubio, France Overview: Marine Natural Products and Environment Using marine bioresources to develop products that address some of the key environmental issues of marine operations seems like the most "natural" way to go. But even if actual products have shown their efficiency, there is still a lot of work to do to bring more attention on the great innovative players in the market and to support more funding for R&D. The leaders in this game have a clear vision about how the "closed circle" approach for environmental remediation is the best sustainable way, by using oceans resources to solve oceans challenges. Laurent introduced himself explaining that he is in charge of a marine technology cluster involving a group of companies (industry) and government. The Quebec cluster regroups leaders from many areas of marine and maritime industries. This mix of actors and related challenges about the operations in the marine environment brought forward the complexity of addressing current issues like biofouling, invasive species, corrosion or pollution. Can the ocean provide solutions to these challenges? How can we accelerate the use of current products? Is there enough focus on research? John G. Hayes , Managing Partner/CEO, ShellBond LLC, USA: John said when that when they were trying to come up with a theme for this session, they exchanged ideas that morphed into a topic. Focused upon what the BioMarine community needs to change to broaden the acceptance and support of the consumer, the investment community and become a main stream business. He stated that the community needs to start addressing the issue. John has been involved with business, insurance, companies, IT 46
  • companies, federal government (NOAA), marine pollution, tides and developed real-time ocean sciences. Through his work,   he   in   fact   became   a   sort   of   “interpreter”   between   the   scientists   and   the   business   and   political   constituents.   (congress). He stated that many scientists do not understand that when we talk to non-scientists, we need to speak their language. He asked  “How  do  we  make  the  most  headway?” His company came up with a product (calcium hydrate) that removes oil when there is an oil spill on water or land He  pointed  out  that  in  past  oil  spills  (such  as  BP),  the  companies  would  only  “disperse”  the  oil  – not caring about what was happening below the surface. He also noted that Kevin Costner did receive media exposure in the BP spill in part due to his celebrity status. On the topic of corrosion, over 2.2 trillion dollars GDP is lost globally due to corrosion and its effects. John H stated that in order to make a change, communication is required between universities, industry and governments. Jean Christophe Sergère, CEO, Setubio, France Jean Christophe created Setubio. It is a biotechnology company dealing with active compounds from plants, fungi, algae and microalgae. He said that if people are aware of the value of the environment, they will protect it. Their markets include animal feed, cosmetics and medicine. He stated that the marine world is the beginning as well as the ending of the story. He said that once you know more about the activities of algae and microalgae, then you try and understand how they interact. Following that, you try and develop something (such as anti-fouling) for the market. Their company uses marine products as solutions to solve marine problems. Kim Doiron, ISMER, Canada Kim is from ISMER based in Rimouski Québec. She works with three laboratories there, including microbial ecology, planktonic bacteria and biofilm. In the biochemistry laboratory, they perform extraction and purification. Antimicrobial peptides have been isolated from the shells of snow crab. Some of her questions are: What is the impact of estuary contamination on bacteria? What is the impact of biofilm? They discovered that corrosion levels decrease when the antimicrobial peptides are present. Also, in the presence of the antimicrobial peptides, there is a decrease of biodiversity in biofilm. Jean Christophe Sergère: Biofilms affect up to 95% of living microorganisms. It affects 4% of the gross national product. It is known that most microorganisms travel around the world. We now have an invasion of biofilm around the world. Laurent  Bellavance:  “What  is  the  trigger?    How  do  we  make  things change?” John Hayes: The world is economically driven. If you are trying to work in nutraceuticals for example, you need to engage economic factors and put it in a business plan. A lot of the research comes from government and universities. The big companies want instantaneous returns. The biomarine field needs forums to bring together investors, companies and government. International organizations must be brought in. Everyone wants to get in early in the process for the next best thing to come out. He said the world is looking for these natural products. At the moment, there is not enough required change in the education process to promote science. He stated nobody wanted to be the one  to  “fail”  going  to  the  moon  and  back.    It  was   a  clear  vision  and everyone involved knew what it was. We need to create a vision (not a mission). Laurent Bellavance: Jean Christophe can you talk about your interactions with investment companies? Jean Christophe Sergère: Regarding difficulties to find funds: what interests  investors  is  “cash  back”.    You   need   a   market with a lot of value. They like to use one product with different/several markets. In the end, they all add up to a lot. Big companies do not care a lot about biological resources. If  you  “sell”  the  benefits and explain things to the investors that they might come through. 47
  • Laurent Bellavance asked Kim: Is there enough focus on these subjects? Kim Doiron: The big problem is money. Biofilm  is  a  bacteria  and  as  such  is  not  “sexy”  to  the  public.    People cannot see the bacteria but they can see the biofilm. With intellectual property, funding is a problem because sometimes you cannot publish. Question from the audience: Does Kim have any problems with the testing of products in situ? Kim answered “no”   and that all her testing was performed at the university and they only perform these tests in the laboratory. Laurent Bellavance: What are the issues with environmental legislation? John Hayes: You need approval from the regulatory environment – then you are legally in the clear unless someone objects. The former US VP affected legislation in a way that created the loopholes for fracking. Jean Christophe Sergère: Everything takes much longer in Europe compared to North America. An audience member stated that back to the testing issue, the Aquatron at Dalhousie University (Halifax) can test ballast water from ships. Kim Doiron: I do not have any legal issues or problems in my job. John Hayes: North Carolina also has a company that tests ballast water in ships. Laurent  Bellavance:    “How  can  we  work  on  biofilms?    Why  do  we  work  on  biofilms?” Jean Christophe Sergère: Biofilm on the outer surface of boats: Decreases the speed of the boat and at the same time, increases the fuel costs as much as 40%. Mother Nature has already given us everything we need (the key and the keyhole). There definitely are ways for us to find natural products that can stop the formation of biofilms. Laurent Bellavance: Do you feel BioMarine can help? Kim Doiron: “yes”.   Interestingly enough, mussels and clams do not have biofilms on their shells. This made me wonder  if  there  is  “something”  in  the  shell  and  as  a  result,  some  of  my work focuses on shells. Laurent Bellavance: We should promote better research support.    This  BioMarine  group  should  “communicate”  to   address problems and major issues in the ocean. Jean Christophe Sergère: We have 2 worlds: scientific and industrial. Both have problems and solutions. They need to exchange information and help each other. Laurent  asked  the  panelists  for  their  “take-away”  thoughts. John Hayes: It all comes back to communication and dialogue. I wonder why the press was not an obvious presence at BioMarine. He stated that there needs to be a coordinated effort and that in general, people will sit back and wait until the BioMarine industry communicates clearly the value of working in harmony with the marine environment and all that it can produce and  this  doesn’t  happen  easily. Jean Christophe Sergère: We forgot to mention the third world: the consumer world. By communicating and perhaps  shouting  to  the  public  that  “we  have  solutions”  – it might help. 48
  • Kim Doiron: Looking to the future, there needs to be conciliation between the ocean and its exploitation. A compromise made by the marine industry. Jean Christophe Sergère: Added  as  a  last  note  that  we  should  communicate  with  the  public’s  children. Special thanks to Patricia LeBlanc,  Natural  Products  Chemist  with  Canada’s  National  Research  Council for the note taking . 49
  • SESSION 2C - INVESTMENT STRATEGIES TO REALIZE THE POTENTIAL OF MARINE BIOTECHNOLOGY Sponsored by: Steve Dillingham Regional Director, North America, GC Rieber Oils, Inc., Founder Aquapreneur®, USA Nicholas Katsepontes President & CEO Axios Investments Corporation, Canada Miguel Marques Economy of the Sea Executive Partner PricewaterhouseCoopers, Portugal Robert Orr CEO and Managing Partner Cuna del Mar LP., Canada Aline Pajolec Chief Executive Officer Thalocea Capital Partners, France Key Take Away Message: Investment strategies to realize the potential of marine biotechnology Promising areas to invest now include sustainable aqua, marine ingredients, pharma, marine natural products, and bio-remediation. The marine environment has massive opportunity; more diversity creates more opportunity and complexity. Although there was some contradiction from panel members about the availability of funding for marine biotech, some valuable pointers were given to companies looking for funding: o money follows good ideas and people who can execute them o If you have a good idea, technology, and people you must also understand the need and end user in order to exist in business. o Show a clearly defined path with market penetration, test marketing. Need to bridge the gap between innovation and business model. o An investor needs experts to help explain the marine biotech product/technology, and what exactly is at stake. Academics must help do the job, as the complexity is hard to understand in biotech. o Investors are likely to invest only in business they are able to understand, and invest only in countries that have proven flexible and adaptable – particularly during the last financial crisis, o Organizations can get over-focused on patent. They can certainly be a valuable asset for a company, but positive market dynamics are more important. o Clinical trials are a necessary element for a company to attract investment, and to succeed in the market. The reality is that not all business opportunities are meant to exist. The basics need to be in place – most importantly a market need. Only the best people are supposed to succeed, and you need a dynamic manager who can inspire -- in order to get investor interest and passion. Introduction Overall, marine biotech industry needs to find ways of reducing risks and educating investors. International collaborations may be more important than international funds in spurring growth in this industry. 50
  • Steve Dillingham, Regional Director, North America, GC Rieber Oils, Inc.: As prior time spent as a consultant, I often heard a battle cry from small start-ups and more established firms alike, that there is a need for better access to funding, as they are finding it difficult to secure funding throughout the growth continuum. This is an early stage tech industry with long horizons for investor return – not unlike what biotech was years ago. In this panel discussion, we will cover all things investment-related to marine biotechnology. Panelist Introductions Robert Orr, CEO and Managing Partner, Cuna del Mar LP. , Canada : One of the few who resides in Halifax, wearing two hats - Managing Partner and CEO of a family office private equity fund investing exclusively in aquaculture -- also pitch hitting for John Risley a co-partner in founding and development of Ocean Nutrition Canada Ltd, started 15 years ago sold to DSM for millions. Now Robert is running a fund investment in this space, and he is a founder of company that requires over a 100 mil in capital to get off the ground. Aline Pajolec, CEO Thalocea Capital Partners, France: Originally a lawyer in comparative law and 10 years in entrepreneur, management and acquisition advisor in algae MSc in finance. Participated in BioMarine early on, first time we have a special session focused on finance at this conference. Third time attending Biomarine, first time it was next door in France and she was one of only two financial people at the conference. Why use a blue business baseline for your company? Because Blue Biotech is like biotech for the ocean - just 70% of   the   earth’s   surface.   Second   time   in   BioMarine summit in London – was the first time she saw large international companies and corporations, they were all aware of what was at stake with marine ingredients and biotech. This time she is acting as a representative of financial stakes in this industry. Noticed diverse group of participants this time around, excited about brilliant future of biotech and blue business particularly. Not so optimistic, saw same people coming from same schools, same thinking -- need fresh influx of ideas and background. Miguel Marques, Economy of the Sea Executive Partner, PricewaterhouseCoopers Portugal: Based in Portugal studies the economy of sea industries, as Ports, as Shipbuilding, as Tourism, as Fisheries and as Biotech. Believes that biotech has an important role in the world development. However, in order for biotech to succeed at least two things must be done: 1) focus on the market, create products and services that the market is willing to pay for it and 2) work in cooperation, creating cluster to help strengthen cooperation Nicholas Katsepontes, President & CEO, Axios Investments Corporation, Canada: A Dalhousie University grad, left   NS   20   years   ago,   to   work   on   Canada’s   foreign   over   fishing   campaign,   with   a   number   of Canadian fisheries ministers. Please to see the redefinition of the marine industry with what companies are present at BioMarine evolving the traditional capture based model. Axios Investment Corporation spun out of Montreal based CRO and has done work in algae and omega research and pharmaceutical and nutraceutical applications. Constantly approached by small companies seeking to finance and commercialize their products and science and thus Axios emerged to fill the gap and need for a biotechnology and natural products investment firm. We see lots of diversification in this industry. Small company, good science looking to commercialize – common experience. Panel Discussion Steve Dillingham: Most promising areas in your field today? Where do you see attention today and tomorrow, what about your particular niche where do you see opportunities? Robert Orr: Running a fund that supports sustainable aquaculture, the importance of aquaculture and the supporting technologies that go along with this industry. Obviously sustainable feed replacement is a stand out. Cuna del Mar is investing 10 of mils in algal biofuels space and is another exciting investment stream. Ocean Nutrition was started to 51
  • look for bioactive compounds in under-utilized species, shifted to omega-3, in that it was a wealth creating product that harnessed consumer needs. Aline Pajolec: in order to answer this question we need the definition of promising which is "likely to develop in a deliverable manner" and likely is probable and risk avoidance is a general behavior, particularly in Europe, you can't invest in this type of work if you are not able to accept a certain level of risk. Investment needs partnership depends on size and timing and the kind of investor you are aiming for and many other areas. 3 kinds of investors (1) Financial, when you have a crisis you have lots of reasons not to invest…most financial investors have left the building. (2)Industrial investors are the best stream if you want to ramp up your business, and the question with them  is  “How to spend your life together”, which is an important consideration for these long term partnerships. (3)Sovereign fund investment: the only one that doesn't ask where is the exit while entering your own company, but as they want to stay together,  it’s hard when they want to exit someday!. Steve Dillingham: What investment areas are promising now in marine biotech? Aline Pajolec: Marine ingredients, everything about bio-remediation and maritime. Miguel Marques: In my personal opinion some opportunities in the blue biotech are in the fields of the big pharma and aquaculture. However biotech needs to solve some problems with research and development productivity. Investors need to be aware that in aquaculture, but especially in big pharma, investments have long payback periods. May be other areas that biotech can explore, as the areas related to how blue biotech can minimize environmental impact of housecleaning products, that everyday go into the ocean without the necessary treatments, which have shorter payback periods. Nicholas Katsepontes: Bio   pharma  marine.  Note  the  success  of  Robert   Orr’s  company   - and the recent $1.8 billion purchase price for a company in the omega 3 space, as the leading pharma success stories. This type of product was helped by being culturally and historically recognized as a beneficial product, as good for humans so readily accepted. A lot of work can be done in this area to create pharma from the ocean. Cost of taking a molecule from lab to full commercialization as a drug is about 1 billion. With such financial commitments required, we need a better dynamic system allowing the stakeholders of industry, government and academics to fast track pharma opportunities. We also need to focus on the environmental aspect of ocean sustainability and health (environmental pollution) in order to safe guard all the ocean resources we plan to use to develop future products. Steve Dillingham: I hear from the panel that promising areas include sustainable aqua, marine ingredients, pharma, marine natural products, companies that are large and have more capital versus small start ups. As far as their attractiveness, how would you look at a small, start-up company within your investment strategy? Robert Orr: one of the issues that I have for the panel topic is in my perspective money follows good ideas and people who can execute them. Scientists are so invested in their technology but one of my questions is "who cares?" By that I mean who will actually buy the product? Not the focus on tech or science, Ocean Nutrition used the motto "nothing happens until someone sells something". If you have a good idea, technology, and people you must also understand the need and end user in order to exist in business. There is lots of money in the world but you need these tenants. The biggest weakness in early marine biotech is the inability to understand the market place and customer. Aline Pajolec: first question is to have an inspiring manager when I ask question "why did you create this company?" very few of them show able to answer this question while most of them know how to respond to questions  “what  does  my  organization”  and  “how”  the  activity  is  functioning. My second main criteria is how this product or service is able to serve the market 52
  • Miguel Marques: Independently of size, focusing on the market, on the clients and potential clients is fundamental, especially when the developed world is facing liquidity shortage. If possible, a good mix of private capital and public funds are important in this phase. Steve Dillingham: We will want to touch on private funding Nicholas Katsepontes: I think you don't have a business until you put the first dollar in the cash register. Sometimes the gap between innovation and business model never gets bridged. The types of intellectual property protection need to be properly assessed relative to the costs of protecting such interests. How to defend IP rights and at what costs? You need sound partnerships in order to have good advice as a young company, especially if challenged by a big company in a patent war. In the any early stage company, entrepreneurs need to see the value in bringing on good advisors and partners at an early stage. If this is not understood it is a failing consistent with common mistakes of founder’s syndrome that sinks many early stage companies. Steve Dillingham: Is marine biotech any different from just straight biotech? Biotech has seen lots of advancement and excitement, is this too early in the cycle for marine biotech? Miguel Marques: There are obvious similarities in biotech and marine biotech. What seems to be a characteristic of blue biotech is that in the oceans there is more diversity which creates more opportunities but dealing with ocean environment is typically associated with more operation costs. Aline Pajolec: before marine biotech there was biotech so we can build on this initial stream for our purposes, the main difference is the intervening 30 years that has passed. Everything including the communication, transfers of companies. The client is not stupid anymore there is more information, so one needs to be very creative. There are many similarities, need experts to explain what is at stake. Academics must help do the job, and the complexity is hard to understand in biotech. One thing that s very similar to 30 years ago is that it takes time to change behavior and to fight lobbyists. When launching a business to replace an ingredient with another and in order to do this you effect the other product's company there will be an impacts. Only the best people are supposed to succeed, you need this dynamic manager to inspire in order to get investor interest and passion. Robert Orr: Looking at marine biotech, the marine environment has massive opportunity; more diversity creates more opportunity and complexity. If you are going to develop a pharma drug you have a proven market, the road is long but positive. Other areas needing market development need patience and money. You need to develop the story, you need to simplify the science if not pharma -- with proven distribution and a strong margin that you need to be able to prove to investors. Martek lost money for 10 years before becoming profitable. At Ocean Nutrition, we lost 1 million dollars a month for 2 and ½ years before turning a profit. Do you have the stomach? Board meetings were difficult at Clearwater, with the expression of short term versus long term returns. As an example, fishermen could get a new boat versus for the money lost in a month during development of Ocean Nutrition. Need to develop opportunity but also to articulate the opportunity clearly to investors. Lots of investors have no clue about the omega-3 strategy. When you have to produce different supply chains, you need to communicate this. Supply chain management, 100 mils of capital to make this drug. You can't check your common sense at the door. Nicholas Katsepontes: 85% of molecules fail out of the lab and usually during the clinical trial process. In Biomarine, we have a platform that can help this rate drop given the historic experience and acceptance of products such as omega 3 products evolving from things like cod liver oil. Go after the low hanging fruit and then go through an evolution towards a pharma product leverage the knowledge and experience you acquire along the way. A lot to get to commercialization (seaweed/alga) quickly and then develop into more complex products. Tom Brudenell-Bruce, Omegatech from audience: The issue about small companies in omega-3 is that they need to 53
  • look at the patent landscape; there are 6000 patents that look into the process. There are 10 that block the development of omega-3 oils. In order to develop you need to look at patent landscape. Should the costs involved in this be with the company or the investors? Before embarking on any project particularly in the pharma sector there are thousands of patents that will block work in this area. Aline Pajolec: A large cosmetic company has more lawyers than scientists hence the expensive price of some creams. Do we need to patent every innovation? Top companies are questioning this. Tom from audience: Need to explore this before spending any money on R&D Nicholas Katsepontes: Assuming these patents are filed by companies with investors and seeking to protect that investment in intellectual property. The proliferation of blocking patents may be a reflection that the omega-3 space is saturated with too many players. Companies and entrepreneurs need to innovate in the lab and come forward with something really distinct and unique to go forward as opposed to seeking a subtle differentiation in an already crowded space such as omega 3. The costs of protecting patents can overwhelm a company with the only beneficiaries being the lawyers. Tom: Omega-3 is saturated for small players – a lot of areas can be looked into, but you need between 2-10mil to break patents. Robert Orr: Organizations can get over-focused on patent. There are other barriers to competitive competition beyond patent. Patents don't create value in a company; the product does, but creating other barriers and competitive advantages need to be built. Jeff Wright, MARBIONC North Carolina, from audience: Discussion about patenting omega 3 is about trying to protect intellectual property, a really poor example in that people have been working on it for decades so there is a lot. The pharma route Robert O. mentioned as an easier route to travel, really isn't. Pharma companies are very risk averse. You need the product with no problems  if  they  haven’t  been  involved  in  the  development  they  don't  want  to   touch it. The biomarine world has potential to offer lots of interesting new products if you hold product patent from one organism and the process is hard, you hold the power. Investors are not very risky. Julie LaRoche: DAL academia developing industry in bio-remediation and clearing up environment - worked in Europe and Germany. What is the landscape difference in Europe versus North America for this development? Aline Pajolec: Biomarine ingredients aimed at global market need to comply with regulations of the place you are working. Think globally for these pursuits. Nicholas Katsepontes: I was in Paris in May and made a point of visiting as many drug stores and health related stores as I could. Europeans, from a consumer perspective, are more advanced in homeopathy and natural products use and availability. North America is behind in this area by 5 years. The consumer base is evolving in North America and we need to recognize this as an emerging market and trend. From audience: What is the best de-risking strategy? Steve Dillingham: Not need the money in the first place! Robert Orr: The most significant de-risking strategy – clearly defined end user and the ability to carry out the process to get to the end user. Nicholas Katsepontes: Clearly defined path with market penetration, test marketing, giving it out to family and 54
  • friends, having gotten people excited and acceptance of your product. A good management team with good track record. That track record can include failures which can be valuable lessons learned with the right entrepreneurs leveraging to grow and learn and thus avoid the same mistakes. Miguel Marques: Probably creating a step by step strategy including lots of small milestones and good communication with developers and the business community in general, and each milestone prevents the risk of investing  too  much  in  ideas  that  won’t  succeed. Aline Pajolec: In Sweden, I met with a family investment fund with lots of success, in private equity funding and they have three criteria. First, invest only in business they are able to understand; second, invest only in countries that have proven flexible and adaptable in the last financial crisis; and third, invest in companies that have clear and fair figures. Honest and transparent. That is what diminishes risks. Audience member: Nutraceutical “grey power” and baby boomers want clinical efficacy proven. Aline Pajolec: I met with a Norwegian company three years ago with omega but they put too much into the pot with money and even though had proven effects. Robert Orr: Doing the science is the price of entry. Doing multiple clinical trials -- then you need to be able to explain this benefit to the consumer. People don't understand distribution channels, there are almost zero national brands, getting into Costco, Walmart etc. is not the answer. It is easy to get the product on the shelf but you need to get the product   off   the   shelf   and   into   consumer’s   baskets.   Need to have integrity in the message and product and brand organization, not trivial exercises, not enough companies spend time on marketing and getting the information out. Famous phrase to watch out for is  “if  only  they  knew”.  I  always  ask  who  is  doing  the marketing? Nicholas Katsepontes: Looking at the science and commercialization through of the clinical study process in an objective manner as to where you wish to take your product. Need to design a clinical study as part of your marketing strategy identifying what your population, disease or benefits package is. It is a messaging issue as part of your marketing. Need to find right partners and distribution chains. Steve Dillingham: There are 15 minutes left, and we haven't addressed public funding. But I will try and frame an idea and ask the panel for their thoughts. Clinical trials are the price to play ball, this is survival of the fittest and not every company will succeed. Investors will weed out the not best in breed. We need to simplify complex things into easily digestible things. We heard about reducing risks and educating investors. Borrowed from London – industrial development with government and academic partnerships allowed the biotech industry to take hold. Marine biotech in that way is not that much different, in London looking at achieving larger scales, limited investors, the thought of forming an aquaculture bank with private and public funding. So I pose to the group: Would there be an opportunity which could be an uberfunding scheme such as this for marine biotech with public and private funds-- to help boost smaller scale development getting rid of geographical borders. Agree/disagree/thoughts? Nicholas Katsepontes: There is an opportunity in Atlantic Canada, we have a private and public funding scheme that parallels this idea but universes need to come together. Dr. Battistini, in New Brunswick (Heath New Brunswick) has done a god job bringing together the private and public sector interests in a dynamic vetting and funding model that is timely in how it processes opportunities. The Eureka initiative may be a promising avenue. It also plays to the risk model, spreading it out globally. North America is behind European strategies, so there will probably be a need to nationalize our approach and seek more regional and global cooperation. Miguel Marques: There is lots of room for cooperation in clusters, but I'm not sure if a global specific fund is the way to go as it may exclude other streams of funding. If the specific  fund  is  a   plus  that   doesn’t   exclude  other  sources  of   55
  • financing, ok. But if excludes, maybe it is not a good idea. Probably, more important than a specific fund is spreading knowledge and expertise, about blue biotech, around all financial system is helpful. Giving realistic information to the financial system, is also essential, in order to build trust. Biotech is more than 20 years old, and in the beginning everybody believed that it were to have a boom in the future. However, 10 years is a good timeframe to visualize expected booms, and we have not seen that boom yet in the last two decades. Something must be done, and I think that part of the issues to solve is the need for spreading more information about biotech in the financial system. No one will invest or finance project that they do not understand, so information and knowledge are fundamental. Aline Pajolec: Heavy topic, really plenty of funds, never on the right place or right moments, so there is a gap. A little out of the box, if you need money ask for everything but money. Similar to a famous Monty Python sketch: Adopt, adapt and improve. A way to do this is to explain what is this money for, what is the user fund? Main purpose is to develop a product with clear view, look at the established company and partner with them in a joint venture they will invest a lot of money if there is a clear path for them because they know the value in the company. Instead of pure fund raising, organize a "menage-a-trois", so to speak. Robert Orr: I think an international fund is nonsense. You should have international research collaborations. Sovereign funds are important. Atlantic Provinces have a hard time working together and bureaucrats managing money is a nightmare. The funding of Ocean Nutrition needed the AIF funding and Provincial funding to succeed. Israel and Norway have both done well in aligning resources and funding to excel. Trying to do multiple countries is a challenge at best. Special thanks to Dr. Victoria Savoie-Swan, post-doctoral fellow in the Department of Biochemistry and Molecular Biology at Dalhousie University in Halifax for the note taking . 56
  • SESSION: BIOMARINE CLUSTERS Sponsored by: Pierre Erwes Executive Chairman BioMarine Oystein Lie Chief Executive Officer Marlife, Norway Rory Francis Executive Director PEI BioAlliance Canada Ernst Kloosterman Chief Executive Officer Industrial Biotech Network, Norway , Brian Monks Int. Business Development Capbiotek , France Deb Mosca Chief Executive Officer Marine BioTechnologies Center of Innovation, USA Ilaria Nardello Marine Biotech Research Center Coordinator University of Ireland, Galway Key Take Away Message : With the global population forecast to grow exponentially over the next several decades, finding new, sustainable sources of food will be paramount. The oceans sector has been gaining greater prominence as a potential source of food, and a newly formed association will be instrumental in bridging the gap between companies and investors. The  biomarine  research  area  is  very  wide  and  spread  and  there’s  no  organization  at   this time. We need to get organized. Cluster development is among the most prevalent tool in the bio marine industrial policy. Cluster policy aims to strengthen interaction between enterprises, research and development units, and stimulate innovation through public development schemes. We would love to see an international organization deliver on services to address gaps seen at local level. An association that could coordinate multiple needs and exert bigger push to deliver the services that the local level requires. Local level first networked into larger associations. Rather than trying to interact with more than 20,000 organizations, the BioMarine International Clusters Association, which is based in Monaco, will be comprised of 20 regional clusters. The intent of the new organization is to be able to connect a small company with global investors and opportunities. With the biomarine industry valued at $168 billion annually, that presents a unique opportunity for small and medium-sized companies. This collaboration between investors, industry, and research would achieve a sustainable growth of the ocean. The organization will also have a trans-sector approach, connecting players in different fields, like aquaculture, marine biotech, and aquafeed, with each other, a unique feature of the group. Introduction 57
  • Pierre Erwes: The   world’s   oceans   are   already   being   used   for   transport,   energy   resource,   as   a   food   source,   as   a   supplier of raw materials and as a recreational area. The ocean and its marine bio resources are the economic vector of  mankind’s  future  sustainable development. We know little about active biological agents in marine organisms. We are improving aquaculture techniques, we start to elaborate protein replacement for fish meal, we grow algae for fuel, to extracts necessary ingredients for cosmetically, nutraceuticals and pharmaceutical uses. The challenge now is to transform scientific findings into processes of value creation. Marine biotechnology offers many ways of making living marine resources ever more usable for people. It is true that marine biotechnology is still in the early stages of its development, however, but it is regarded as having great development potential and as being of great importance for the future. Let me give you some numbers: Despite having an annual return exceeding $172 billion, limited resources are devoted to marine activities within the various global industries: 8% of the total biotech market Less than 1% of the total biomaterials market 2% of the energy market from marine bioenergies Less than 8% of the energy market from marine renewable energies 12% of the global animal protein market from aquaculture 6% of the chemicals market 13% of the cosmetics market 32% of the nutraceuticals market 38% of natural compounds market from marine ingredients Clusters are the only way to foster the development of our industry, but there is a need to consolidate the industry and take it global. Cluster development is among the most prevalent tool in the bio marine industrial policy. Cluster policy aims to strengthen interaction between enterprises, research and development units, and stimulate innovation through public development schemes PART I: REGIONAL TO NATIONAL LEVEL What does exist at regional level? Example of marine bio resources clusters: MarLife, Norway (Oystein Lie), began by explaining MarLife and where they want to go. MarLife is a trans-boundary marine innovations network. We decided to launch it because of a product shift in Norway. It was a challenge as innovation is knowledge and science intensive and must go trans-boundary, not local or regional. MarLife operates along the following three routes to advance the marine sector: Framework. Collaborate with authorities to optimize public frameworks for the sector R&D and startups. Assist members on R&D and innovation projects and startup finance Arenas and communication. Run arenas with focus on business to business and innovation and communicate our efforts together with marine highlights North Carolina, USA (Deborah Mosca) The Marine Bio-Technology Center of Innovation was established in 2012 as an independent non-profit organization with a grant from the North Carolina Biotechnology Center. Its role is to link academic, industry and financial leaders to facilitate the commercialization of new food, fuel and health  products  from  the  State’s  rich  resources. A key element of   MBCOI’s   mission   is   to   match   interests   and   expertise   to   foster   complementary   and   synergistic   collaborations.   Headquartered in Wilmington, North Carolina, MBCOI combines a regional focus with a national and international perspective. 58
  • Capbiotek, France (Brian Monks) In 2005 clustering was á la mode. Back then France started building clusters for biotech, specifically with the human health market in mind. Capbiotek was created to support a more transversal vision of biotechnology (multiple markets) and positioned the Brittany region as a leader in marine and agro-biotech (blue and green) The program supports industrial projects stemming from these two areas of expertise, and port agri-biotech and marine for human health and energy, as with other clusters, promote this regional expertise in Brittany, France Irish cluster (Ilaria Nardello) Ireland’s   marine biotech community has a coordination initiative, led by the National University of Ireland Galway that supports the implementation of the Marine Biotechnology Programme in the framework of the National Strategy for Marine Knowledge, Research and Innovation, 2007-2013. Ireland has vast marine resources and an underwater territory that is ten times larger than our land. The Marine Biotechnology Programme is seeking to utilize our marine resource for new value in food and health &wellbeing applications. The initial mission of the Marine Biotech Coordination Unit was to create a community of researchers and industry to find solutions to tackle R&D problems. The next step is to create an infrastructure to support the transfer of knowledge and technology across the sectors . PEI, Canada (Rory Francis) Our  system  is  closer  to  France’s  system  of  bio-cluster organization.PEI BioAlliance is located three hours from Halifax. It was established in 2005 to coordinate partners to develop biotech industry in PEI. Private companies lead the PEI BioAlliance but it is a not for profit. It consists of a board with members from businesses, academia and government. Our primary focus is on private sector growth and increase scale of technology products. We try to convince companies of the significant science platforms in PEI and why companies should come to PEI to expand their research and  build  their  company’s  resources.  At  least  50%  of  the  companies  in  the  PEI  BioAlliance  are  from  PEI  and  50%  have   moved to PEI from elsewhere. Our main focus is on human health, animal health and nutraceutical development. We work to form collaborative alignments between partners. We work to create the environment for business success and Facilitate and bring partners together to meet their goals. Norwegian industrial biotech (Ernst Kloosterman) We are not the same as MarLife. We have very little biotech industry in spite of having a lot of bio-resource. We want to develop this sector in agriculture, marine and forest industries and to transfer information between multiple sectors. Norway is not industrial by history so the country wants to join with other countries that have that history, like Britain: Collaborate with Britain to learn industrial processes in structural way. We also want to form joint projects, very focused on biomaterials and bio-refinery for industrial processes. PART I I: UNDERSTANDING THE NEED FOR CLUSTERING Pierre Erwes: What is a need for common action from your perspective? Audience member Randall Johnson from North Carolina, USA: the Key is coordination of assets. Audience member Stephen de Mora, PML, UK: We had a cluster but it failed. It failed at the executive level but works at the grassroots level. We need trust in the institution and financial stability! Glue is commonality of purpose. Ideas and interests of scientists are good on the one hand but not always good for business. We need to show scientists what is needed by business. Audience member Pierre Rioux from New Brunswick, Canada: Clustering originally is Atlantic Canada wide in eastern   Canada.   Bio   Atlantic   is  the   sister   to   Rory’s   BioAlliance   in   PEI.   We support fishery and aquaculture sectors for value added and bio-product development. It is not an easy process as it is a new paradigm in Atlantic Canada. The Provincial government of New Brunswick is helping reduce the risk by supporting industry. Oystein Lie: There is a paradigm shift now compared to original clusters: from local to trans-boundary clusters. We need to attract top expertise and knowledge to reach out across the world. We should link up multiple clusters and form networks. Clusters need to generate community. The question is can individual clusters see this need. 59
  • Pierre Erwes: It is important to understanding the need for clustering: How to develop it? What are the critical components? Ernst Kloosterman: Clustering is on regional and national scales and between sectors. Norway has cluster within low density population, but huge coastline. Where is the critical mass? Merge small companies or meet and discuss issues if there are in similar area. The regional clustering due to low density of population works well. We still need national and international perspective. Small clusters work with other clusters and can consolidate in some cases. There is a need for critical mass, and then you can form a national network. Then you can form a national network across sectors, and then form a global network. Pierre Erwes asks Deborah Mosca: Do we need more consolidation or more cooperation? Deborah Mosca: Consolidation and cooperation must go hand in hand. . We also need a means for effective communication among members. While the internet is a very powerful tool for dissemination of information, it does not necessarily provide the interactive aspects of interpersonal communication. Hence, we need consolidation and cooperation with effective communication. Pierre Erwes asks Ilaria: What are the respective roles of national and regional authorities? Ilaria Nardello: Both national and regional (intra-national) authorities have a role. National authorities generate a reference framework for development goals that are underpinned by national strengths or needs. In that context and with reference to specific territorial competences, the regional authorities can act to effectively mobilise local resources to attain those goals. Pierre Erwes asks Ambassador from Monaco, Patrick Van Klaveren to comment Patrick Van Klaveren Ambassador from Monaco: All levels of government must have consistency. The Problem is replication of governance at all levels. I have difficulties to link the new world to old world. Clustering is easier in new world. Innovation is easier and following up on ideas is easier in new world. New world has more cooperation at local and national levels. In the contrary the old world is harder to bring forward ideas. It can act quickly at regional level but it is more and more difficult to bring ideas up the chain geographically. Local idea is more efficient. Rory Francis: Monaco and PEI have several things in common and agrees strongly with the points raised by the Ambassador of Monaco. Regional and national clusters only have success if they are successful at the local level. We need strong network locally and then you can branch out into the world. We have different networks in each areahuman, animal and nutraceutical sectors. It is mandatory to have strong science and informational knowledge based on common platform of business and science at the local level if you want to have success. Clusters are also built on trust: social dynamic and based on human behaviour, trust and willingness to align resources. Larger clusters are more difficult because you lose the commonalties that are so strong and important in local clusters. Pierre Erwes asks Tiago Pitta e Cunha (Advisor to President in Portugal): What is your vision at regional, national and international? Tiago Pitta e Cunha: For EU, clustering is basic tool to induce productivity and innovation. Clustering has been very important in shipping industry. There are strong lobbying groups which lead to success. Our Bioresources industry is just emerging in Portugal. Start-ups are very busy just trying to make ends meet. They are not ready yet for networks and the establishment of a cluster. We envision a national level cluster in Portugal which would bring awareness of the existing start-ups. This would give cause for the formation of a cluster. Clusters need to demonstrate their importance to mature markets: 60
  • Pierre Erwes asks Brian Monks: How can we get the agri and the marine sectors to work together? Brian Monks: Brittany has a network of innovation that is trans-sectorial. There are several technical centres,, organized by industry (health, agri/agro, cosmetics, environment) s which are at the operational (tech transfer) level of the biotech and Agri-food clusters. Innovations coming from green or blue biotechnology are processed by these centres, which allows for experience transfer between the two disciplines. Depending on the color, the project is then “labelled”  for  financing  by  either  the  blue  biotech  cluster  or  the  Agri-food cluster. By sharing the technical centers, the clusters promote the trans-discipline sharing of knowledge and the acceleration of innovation. Perhaps Biomarine should invite more green-biotech actors if the goal is to promote trans-sectorial collaboration? Ernst Kloosterman: We should not focus on timelines of: do this and then do that. Work with what you have: perhaps companies   are   already   international   and   they   don’t   need   to   focus   on   regional   clustering   first,   like   in   Portugal.     It   is   nice to have national government to support clusters and see the importance. It establishes clusters, put money into them and promote them. If you do something well then you can get more support because you did a good job. But after some years you have to stand on your own feet and prove the cluster is viable. Our clusters are on the map because they are promoted by government. It helps individual companies if they can say they are part of cluster. Don’t  think  about  sequential  establishment  of  clusters  (local,  regional,  national  international)  if  you  don’t  need  to. Pierre Erwes: As a big industry, do you have any need of clustering? What could be you contribution? Audience member Alf Helge Aarskog from Marine Harvest, Norway: Cluster in biological production is essential. Clusters of big companies can drive the industry because they talk about their issues. Clusters can work if started from  the  industry  and  as  long  as  there  aren’t  too  many  companies  in  a  cluster  because  more  than  5-7 members will never agree. A small number can control the industry Brian Monks: Only 5-7 companies per cluster would lead to too many clusters. Marine and agricultural biotech sectors need larger clusters. Audience member Alf Helge Aarskog from Marine Harvest, Norway: Nofima funds industry at small level and while companies are on their way to expanding. Industry needs to bring forward problems and ask for solutions. Science and research need to solve actual business problems. One issue with clusters is they need to tell the broader industry that clusters exist. Science needs to know about an industry problem to provide a solution. Deborah Mosca: It is a parallel process. Industries are often built on discoveries from academia. To facilitate a more creative exchange, the MBCOI is assembling an inventory of both intellectual capital (people) and intellectual property (technologies) from academia and industry to identify opportunities of mutual and perhaps even synergistic interest. Pierre Erwes asks Ronald Stotish AquaBounty- What is your thought? What do you need on Prince Edouard Island? Audience member Ronald Stotish, CEO, AquaBounty: We are very fortunate to be in the PEI BioAlliance. PEI BioAlliance cluster helps us learn what is available in terms of economic resources and scientific knowledge. They help demonstrate   will  to  work  at  provincial  and  national  level.  Clusters  have  real  value  because  AquaBounty   wouldn’t   have known where to acquire the resources to be successful on PEI. PEI BioAlliance responded to what the industry needs. Start with an idea and takes a year of effort to make it successful on PEI. PEI BioAlliance provided guidance, credibility and dissemination or communication with community, provincial and national governments and with the general public. We owe a great deal to PEI BioAlliance Pierre Erwes: Is there an overload of information? How do you manage this info? Ilaria Nardello: It depends on how Information is treated. The best practice is to organize and coordinate information. Information is never enough, never excessive. Gathering information is sometimes excessive as it can be duplicated. The consolidation and organization of information is very important, as is the human component to 61
  • navigating an information base of data. Databases can be meant as a support system for a knowledgeable operator to address the query of a community. Deborah Mosca: Information without effective communication is not useful. We need a means to organize information that allows for effective communication regarding resources that exist within and among the clusters ; a global directory that is supported by national and regional clusters would allow one to reach out locally to identify not only regional resources but international resources as well. Oystein Lie: It is a big task to establish a global directory.  Deborah’s  point   on   need  for  effective  communication  is   truly important. We also need long term knowledge base and sometimes there is need to look outside. Greater innovation potential may be in cross-sector collaboration. Pierre Erwes: What is the catch for the international cluster association? What do you want for efficiency? Rory Francis: As you integrate more broadly, the common factors between cluster members become less. There are four Bio Alliances in Atlantic Canada. What are the common pieces? Human resources and access to capital (not technically related to personal cluster). Regulatory pathway is national conversation. International? Where is common ground except in the promotion side? Blue biotech is new sector and it is complex (not one product or resource). Multiple sectors within Blue biotech create competition. It probably needs promotion of that marine environment. It is important and should be developed sustainably and allow aquaculture industry to be better understood. Aquaculture technologies are not understood by the public. We must understand marine environment and the value that is has. Pierre Erwes: Is that enough? Ilaria Nardello: Would love to see international association deliver on services to address gaps seen at local level. An association that could coordinate multiple needs and exert bigger push to deliver the services that the local level requires. Local level first networked into larger associations Brian Monks: What Rory said is true. Two main activities of the association must be: 1- Promoting the network and brand 2- Supporting their members It is harder at international level to find commonalities between meta-cluster members: Who are their members and what their goals are because individuals are very diverse. But the main problem, and common denominator among clusters, is money. Many small companies make up local clusters and they need access to capital. International clusters provide an economy of scale and can more easily attract investor to address the local problems. Can we all come together and still support our members? Get international consortium to solve large problems? Pierre Erwes: This association will show international investors the local players or smaller players. We are at a stage when we can showcase regional level ideas and tell investors where partnering opportunities exist. Get great local ideas and foster partnering, deal making and investor relations or partnership. We will also get national and regional cluster access to international financing, and facilitate partnerships between all levels. Audience member: One of the merits of an international association is to demonstrate credibility or for verification of individual companies. Some people say no need for marine bio-industry. The cluster can communicate the differences and special interests and features of Blue biotech. Industry serves different markets. How to define where we are: Marine biotechnology or marine bioresources? Other merits are to develop cluster perceptions to policy makers and get support for economic growth. Example: Fisheries and maritime fund: it covers fish farming subsidy 62
  • but no there is no help for developing new feed for these fish. You need to convince policy makers that you exist and are important: Clusters give more power. There is also a need for a science ecosystem to support your industry, to develop a science ecosystem that facilitates innovation and solves your problems. Do you need top down or bottom up organization? It needs to be addressed. PART I I: SUMMARIES AND CONCLUSIONS Ilaria Nardello: Clarify our intent and then map out our global information capacity. Organise our global capacity in formally networked local nodes that will act as the first port of call for requests from investors, researchers, industry, policy makers and, viceversa, to gather, represent and pitch the interests of a certain community to become a larger critical voice. Deborah Mosca: Agrees with Ilaria on need to establish clear mission and goals Clarity on diverse sectors encompassed by Blue biotech Identification of target organizations Definitive structure to form regional, national and global clusters. Brian Monks Has to be funnel for new investment for small members of local clusters. International association has bigger brand and helps fund small players. Ernst Kloosterman Define goals, target group and differences from existing organizations Rory Francis Define clearly the three success metrics How  do  we  demonstrate  success  in  five  years’  time. Oystein Lie We have dilution at larger levels: Need to define common denominator. What are big issues and deal with term or holistic approach to value? Scale up a lot of exposure as you get bigger. Upgrade commonalities. Stephen Hall National Oceanography Centre, UK Policy makers want unified voice Must ensure that there is no contradictory message. Joan Keen Howie, past Director National Research Council of Canada Must be clear on what everyone brings and speak in a unified voice 63
  • Steven Fontana from Marbionc Have goals Need pragmatism. Need to know who to exclude. Managing this cluster as a whole is important. Clear secretariat guidelines and division of labours. Who will fund. Declan Troy from Teagasc Ireland EU is funding 3 largest clusters (Knowledge and Innovation Communities – KIC). Values at 3 Billion. A new fund starting in 2016 for food sector and climate change. Central need is business opportunities or conversion of issues to opportunities. Need communication of intellectuals and academics with industries. Need knowledge triangle. Need business opportunities to drive association because we already have science and research for innovations. Also need investors but they need to see opportunities Sarah Clark (Dalhousie University, Truro Nova Scotia) Dalhousie University trains people that enter the aquaculture industry. Recruiters  have  problem  exciting  students  because  don’t  know  about  the  sector. Aquaculture is a tough sell because the public is unaware of opportunities. There is a need for regional and international associations to explain to world the importance of aquaculture now and in the future. Pierre Erwes: This has been a good discussion and we now know what to do and what to avoid. Our BioMarine International Clusters association has been established and it is based in Monaco. Our next step is to bring investors, business, and research and government together. We can bring financing to small companies, in order to foster business. This large association will increase communication. Funding with come from different areas, but the combination of B.I.C.A and the Biomarine platform is becoming a unique exceptional scouting platform for investors. We will facilitate the deal flow and with such an amount of expertise we will diminish the risk with a better assessment of investment. Special thanks to Fraser Clark, Postdoctoral Fellow in the Department of Biomedical Sciences and a Research Scientist at the AVC Lobster Science Centre at the University of Prince Edward Island for the note taking . 64
  • SESSION 3A: MARINE NATURAL PRODUCTS - COSMETICS AND OTHER PERSONAL CARE PRODUCTS Sponsored by: Ilaria Nardello Marine Biotech Research Center Coordinator National University of Ireland, Galway Martin Beaulieu Co-Owner and Director of Operations InnoVactiv , Canada Alan T Critchley Vice President Research Acadian Seaplants Ltd., Canada Arvid Lindberg Chief Executive Officer Aqua Bio Technology ASA., Norway Helena Viera Chief Executive Officer Bioalvo, Portugal Key Take Away Message: The session focuses on the research and development of novel natural marine ingredients for Cosmetics & Personal Care products. This sector is indeed quite articulated and, beyond skincare, it encompasses personal hygiene, hair care, fragrances and make up. This market space is intensely innovative, with approximately 7,000 (seven thousand) new or improved functional cosmetics released, annually, based on natural products. With our panel of experts from the industry sector, we explored the relevance of marineorigin bioactives in contributing   to   the   sector’s   innovation   process   and   tried   to   identify   the   barriers   to   product  development  and  commercialization,  including  consumers’  trends  and  compliance  with  regulatory   aspects. Indeed, the marine appears as a source of ingredients that are at once sustainably produced, novel and exotic - all  key  elements  to  stay  competitive  in  today’s  marketplace.  However,  sound  scientific  evidence   of  the  benefits  associated  with  any  ingredient  is  in  high  demand,  both  from  the  consumers’  side  and  from   the larger manufacturing industry; a demand that is reinforced by increasingly stringent product regulations. The investment required to undergo full clinical trials are significant; small companies need to act strategically in order to tackle the necessary substantiation of claims and avoid killer overspending. On the other hand, the large manufacturing industries, in personal care products as well as in therapeutics, will soon be interested in a bio-active ingredient with strong science-based credentials. Small companies need to protect their assets with seriously strong patents, in order to avoid being swallowed by the market dominators.   Beyond   the   glam   of   the   word   ‘cosmetics’,   the   sectoral   insight   gained   during   the   session   revealed   the   complexity   of   our   panelists’   business undertaking and their commitment to tackle the challenge of increased well-being through marine-inspired solutions for a sustainable innovation process. 65
  • Introduction to the session This session will have a focus on the research and development of novel natural and marine ingredients for Cosmetics & Personal Care products. Our panel of experts is composed of people from industry. Upon my introduction, the expert  will  tell  us  about  their  background,  the  nature  of  their  business  and  their  views  on  the  sector’s  development.   This sector is indeed quite articulated. Beyond skin care, it includes: personal hygiene, hair-care, as well as fragrances and make up. Skin care remains the most important category in value terms, c.a = 23% of global beauty and personal care   sales,   in   2009.   Consumers’   demand   for   natural   active   ingredients   is   continuously   growing   based   on   the   perception that   “natural   is   better”;   and   for   cosmetics   that   have   health-promoting effects in addition to beauty enhancement (cosmeceuticals). This market space is characterized by intense innovation: approximately 7,000 (seven thousand) new or improved functional cosmetics based on natural products are released annually. Although expensive,   innovation   appears   necessary   to   attract   customers’   interest   in   what   is   an   increasingly   competitive   and   crowded market space. Martin Beaulieu – Co-Owner and Director of Operations, InnoVactiv, Canada: This is an exciting topic, cosmetics has driven development. I have a food science background. Innovactiv has two units one nutrition one cosmetics, and we have developed close to 20 new ingredients mostly from the sea and seaweed products. If you focus on cosmetic product unit of the company the endeavor started in 2004 when the company generated products with seaweed extracts. The variety of products found in the sea is vast and this company has sold several portfolios. Alan Critchley –VP Research, Acadian Seaplants Ltd, Canada: A recent migrant into Canada, attracted by seaweed industry. Spent 20 years in university taught botany and started with seaweed as his passion. Started with Acadian Seaplants 8 years ago to lead up their research, and now takes less than 1mg of tissue to thousands of grams of product. Core and fundamental to this industry is the development of rural jobs in Atlantic Canada, focused on revitalizing, and creating a sustainable world through the science of seaweed. Arvid Lindberg, CEO Aqua Bio Technology, Norway: Aqua bio Technology ASA is a Norwegian marine technology company that takes advantage of the extensive presence of salmon farming in Norway. The company produces bioactive ingredients for the cosmetics industry, using wastewater/hatching fluid from fish, different protein combinations that are sold to cosmetics manufacturers due to their exfoliating properties and anti-aging benefits. All products   in   the  company’s   portfolio  are   natural  and  sustainable products. The company is listed on the Oslo Stock Exchange and is profitable. Thanks to BioMarine and clustering, other networks and strong presence in the marketplace, the company faces a positive commercial development. Helena Viera - CEO Bioalvo, Portugal: BIOALVO is the Biotech for Natural Products and it tries to maximize the applications of Portuguese natural resources. If any of you know the size of Portugal, you may think it is a tiny square at the end of Europe, but we actually are much bigger than what most of you think – Portugal has much more sea than land, it has 40 times sea over land, encompassing the biggest continental shelf in Europe. Portuguese sailors have a long history using the sea but there is now a new a revolution of how we use the sea nowadays. Try to maximize the sea natural living resources, putting out the first product in cosmetic market, then pharmaceuticals, detergents, textiles resulting in a diversified portfolio and risk management is the strategy of BIOALVO. In this company, RefiMAR™,  is  our  first  product  and  it  consists  of  a  non-injectable botox-like compound that was fully developed and put to clinical trials. HV is a scientist by training and attended Harvard business school as well. Very satisfied to see the set up of this company in Portugal. Ilaria – We were saying: Innovation is exciting but expensive, one of the unique ways to stay ahead in the market is by searching for the next new thing. Is marine the next big new thing in cosmetic and personal care products? Where does the difference lie between marine ingredients and botanicals? 66
  • Helena – marine is recent in the cosmetic industry, but seawater has been used as well as sea salt in personal care, but new active compounds are under development. Twenty thousand new marine products discovered so far, but not many from deep-sea organisms, so there is lots to be discovered. There is a feeling in cosmetics that botanical has been explored and exhausted, but marine has this potential for new products. Botanical needs a piece of land to produce ingredients, is this ethical to take land from food production? In biomarine, you can isolate new microorganisms form just a small piece of sample and then cultivate in lab conditions and as an example phytoplankton can be cultivated in laboratory without any other ecosystem impact. Helena – The focus is on microorganisms, for two reasons, first, for collection purposes we need only a small initial sample.    Second  is  sustainability,  you  don’t  have  to  go  back  to  the  environment as you can grow these organisms in the lab. Alan – We now have tools to explore many new organisms. Seaweeds have a longer history of being used and they lend well to the idea of beauty from within, for over-all health & wellbeing. Claims that are made about cosmetics: if we   aren’t   careful,   we   may   need   a   prescription   to   acquire   the   personal   care   products   that   we   get   in   supermarkets,   today. Snake oil reputation. Ilaria – How do industry gather evidence to substantiate the claims of their novel ingredients or products? Martin – We run clinical trials to document benefits or effects. You take pictures and measurements and image analysis in order to prove the efficacy of your component. You also have to figure out the mechanism of action what is the component that drives the effect you see in clinical trials. Sure that Helena is finding lots of new structures in active compounds. Some species of seaweeds have not been studied in detail passed the papers in the 70 and 80s, there are lots of new compounds to be discovered. Mining the sea for compounds. Arvid – Not an easy task to be a small company fighting against the big names in this industry, so we had to be good at something. Having an organization with ex. pharma-industry personnel we have always set the bar high when it comes to documenting our products. Line ups and protocols in clinical studies were constructed in a similarly professional way as the pharmaceutical companies do, to gather the strongest evidence possible to support the claims. We often get the feedback from customers that they are surprised with how our ingredients are based on broad documentation, our testing procedures, ie our solid data, even though we operate within the regulatory boundaries of cosmetics and even though we are a small company. This rigorous approach has been beneficial for us. There are also some regulatory premises that are evolving in our industry to support the way we look upon this, we would expect those to be even more important in the future for companies in our industry, i.e. the necessity to deliver even stronger and more compelling data. Even in the last 10-15 years much has happened in this context, and it will continue. Lots of attention is needed on this matter, for both small and large companies in this industry. Ilaria –The scientific substantion of products’   claims   through   clinical   trial   produces   an   advantageous   competitive edge on the marketplace; on the other hand, clinical trials entail big costs for the companies. Depending on the sector you are operating in – cosmetics vs food, this may be a big burden. What are some other barriers to the marine biotech pipeline discovery? Alan – Looking at molecular models, looking at modes of action some inherent limitations of where the products can go. Not all the raw material to produce a marine bioactive are the same. The learning that goes on helps to understand how to produce secondary metabolites. There are barriers to entry in that you have to prove bioactivity. The other barrier that there is a request for silver bullets whereas there are synergistic actions and there are often several active components that are required in order to contribute to a mode of action. Martin – Interacting with good partners in order to get the good environment. Larger companies want to find out the upscale of products. The industry is still very far away from interacting with the discovery of marine products, they jump on board later in the process. Perceptions are key. 67
  • Arvid – The   L’Oreals   and   the   Proctor   and Gambles around the world, and all the other big corporations in the cosmetics industry, are obviously cautious when smaller companies present clinical trials to them. Delivering cosmetic ingredients to big companies that are critical about what you need from the onset is a balance; you need to be persuasive and have powerful evidence. You need to do at least enough of clinical trials, you have your hypothesis and you need to address that but not necessarily going too far or spend too much money in the initial phase and put your young/small company in financial danger. You need solid data, but not necessarily too much, because larger companies will do more extensive clinical trials themselves anyway, not to run the risk of endangering their extremely powerful brands. Helena asked the audience –“When  you  go  for  a  cosmetic  product  what  do  you  look  for?  The  price?  The  claims  in  the   label?”  Some   people   raised   their  hand  for  price   but  ALL   raised  for  claims.  The  client   is  more  aware  about  what   people   are eating and using on their bodies. The clinical trial trend is also linked to a secondary regulatory process. Audience – How does the non-injectable botox product work? Helena – It is a topical application product that can be used in gels and creams and its pink and smells nice. Natural doesn’t  mean   better,  toxins  are  natural.    But  what  it   means  is  you  don’t  get  as  much   diversity  from  chemically  derived   products as you do in nature and therefore it might mean novel mechanism of action or novel chemical entity with more powerful activities. In Europe, the 2020 goals are towards sustainability and greener processes and economies. How can we make that? We can have as a goal to substitute every chemical component in our products by a natural and sustainable one. We can use biotechnology to make manufacturing and production processes more green. More sustainability   is   linked   to   this.     Marine   ingredients   do   things   that   you   don’t   find   on   land;   from   deep   sea   organisms   for   example there are novel survival strategies that we can copy for our daily life problems. Marine natural products are expensive and much work has to be done in order to culture things from unique marine environments. At the end of the day a barrier is the bottom line taking this all into account, money needs to be made. Martin – From the 70s the road is clearer, perceived benefit from a practical standpoint for the scientific market is very challenging for the industry. You need to put into it a lot of work to work on identifying and studying molecules, while synthetic labs can produce these molecules very fast. It is hard to distinguish between the uses of these two supplements because there is very little information regarding ingredients due to competitive advantage. You need to be very strong in patents in order to protect small ventures in conjunction with larger companies. Audience: Very big companies are moving toward personal care products and they have their own rules and these barriers are transferred to the cosmetics products. We want to deliver products that are demonstrated to be efficient in their action but the new European regulations have raised the bar that push the limits, so getting to market is very difficult. Audience: In the cosmetic sector, the source has to be marketable, we found very interesting molecules from Charlottetown Harbour but this was little appealing to the cosmetic product companies we were trying to sell it to, compared to an ingredient from a tropical island. It is different for pharmaceutical companies who don’t   care  where   the   source   is:   a   cancer   drug   is   a  cancer   drug.     In   cosmetics,   bugs   that   come   from   boring   places   aren’t   acceptable   to   some companies. Ilaria – Do you need to obtain organic certification for salmon derivatives? Arvid – Yes, we need certain certifications but we do not need organic certification in using salmon derivatives. I also wanted to add something to the previous discussion: big pharmaceuticals have been running out of patents and they seem to have not such a solid pipeline today versus some decades ago. The hayday of the pharmaceutical industry could be declining  if  you  aren’t  looking  at  the  niche  pharmaceutical  companies.    What  do  they  do,   they may enter new segments of the market such as cosmetics or “semi” pharmaceuticals – and then everyone is playing for a piece of the pie with 1billion dollars for actives in the cosmetics industry alone. How to win it though is to keep your 68
  • eye on the consumer. The buyer, distributor or marketer, or whatever role in the market you play, if you win the heart of the consumer that equates to success. The consumer is both the prescriber, patient and payer of cosmetic products. Helena – The winning company is not just developing an anti wrinkle formula – what makes it different is why it is better. The story is needed and an important part of what is selected to go to market. Alan- Need to watch how many stories you need. Companies need to be novel and each separate story is needed for each company, overlap is not interesting. Audience – Needs for cosmetics is an artifact created by companies for these different products. Why should we invest in scientific research for un-necessary products? Another audience member - Studies from IRAP have shown cosmetics sale increasing even during the economic downturn. We are living longer and are focused on long-life issues, white teeth, anti-wrinkle, etc. Helena: It is not just about cosmetics, we have to stop working with chemical solutions for many processes and the identification of greener processes can be used as a substitution for more natural products. Botox is licensed to a pharmaceutical   company   and   the   company   is   developing   it   as   a   drug   for   clinical   purposes.   SunMAR™,   another   of   BIOALVO’s   new   ingredients,     that   protects   against   sun   aging   and   photo-damaging, has also room for the mode of action as the story center piece rather that the place of collection. Martin – Inflammatory problems can be addressed by some of these investigations, stress related to light. Cosmetics are a nice entry point for starting to work on other processes and developments. Burn victims helped by using this extract for cell cultures. Translations can be made in these new avenues, used as part of a continuum. Audience – Omega three has this connection for a food product and then pharmaceutical. There are potentials for expanding these processes. Audience – Is the trend an increased interest in cosmetics for men? Arvid – The post war population is getting older, higher consumption patterns with women due to increased disposable income. You can have a financial crisis yet women are buying their expensive cosmetics. Guys are also getting more into this, young men use eye cream, anti wrinkle cream, mascara, all kinds of products. So the market is getting more robust. As for Botox that has been well debated for a long time, lots of people against it, and Helena has as she presented, developed a natural alternative to it. Similarly, AHAs are used heavily. We have seen this is harmful for human skin in the way that the acid could kill living cells, and so we have found a natural alternative to that. The inventions of natural alternatives with solid documentation is entirely positive and I would expect the key to win the consumer, both men and women. Alan – Lots of people are looking for alternatives, there is no gender specificity in products, and marketers are looking for egotistical points for males versus female. Audience – What about cosmetics that you drink? Alan - Marine organisms interact with human microorganisms internally and externally and improved health and immune status is seen. Audience – From a clinical perspective prevention is much more effective than treatment Martin - It is harder to sell preventative over curative. We need to target 28 days (the duration of a jar) and you need to see benefits in trials during this time in order to pursue development of an active. Longer trials exist with nutritional benefits. Nutrition tries to correlate with better results in disease etc. it is very hard to show this in a short time. 69
  • Alan – Historical records of peoples diets, marine actives in the diets they live longer healthier lives. Ilaria – How much do you engage with the research community, do you perform your R&D in house or do you contract research out? Arvid - We outsource much of our research as we are not yet financially in the situation of a big corporate, and for this reason we partner with universities in Norway and abroad. Also, as we are an ingredient supplier to manufacturing companies, these companies will tend to look much more favorably on third party objective data. Helena - We have a broad collaboration with academia as we collaborate with the majority of national and international institutes, we are involved with the major networks of excellence in Europe, and the development of the libraries has relied mostly on these networks. When the commercial orientation becomes the focus companies outsource the clinical trials and less focused activities to a third party. But the discovery activities are done in house. They search out excellent academic and research groups to work with. Martin – If you have expertise within a given platform, when customers are searching for new pathways, you need to be good at ingredient production, in vivo/in-vitro testing done outside to help diversify and keep current with protocols. Alan – A larger number of full time researchers. We have local support government and university labs and funding agencies  are   integral  in  carrying  out  research  and  development   that  can’t   be  done  internally. Working with university can be challenging, but post-docs are the biggest bang for our buck. They publish their research without giving away intellectual property and then that research becomes more proof of process etc. The more internal the research the more things become stale. Ilaria – Do you publish your research? Martin – There is a mix of publishing or finding patents, it is much better to have a patent to bring to market. Publication depends largely on who you are working with and their interests. Publishing descriptive work of mechanisms of actions – not fully peer reviewed is something we often do, some of our work with academia and some more for end users. Helena – We have 14 patents filed worldwide, in the last 12 months we published 3-4 papers. We file patents then publish. We try to publish as much as we can in the libraries and on the screening to get the recognition in the field by our  peers.  No  better  validation  than  your  peer’s  validation.    Thid  is  well  accepted  by  the  big   cosmetic companies. Arvid – One of our most important tasks is maintaining and developing patents. Be careful about falling into the trap of filing patents across the board though, that could be a financial trap. If you come to the big corporates in our industry they are very competent with entire office-floors of intellectual property lawyers, so without a strong patent your  product’s  lifecycle  value  is  at  risk. Martin – Acadian Seaplants controls the resource. If companies have a ownership of a active,  you  can’t  go  to  other   companies whereas Acadian Seaplants have a grouping of actives and processes that they market. Audience – Can we trust the industry? Like any other business can go to a good or bad car dealership. We have presented what we consider goes into good quality products. Nutrition has a worse history with actual examples of poisoning people etc. The feel good part of the use of these products is a big part of cosmetics. All the major companies are very strict on the ingredients they are using in their products. Alan – You can trust me – we trust science and we are based on the science. Consumers need to make the best decisions. Do your homework! Arvid – The regulatory authorities direct us, they direct us and the companies we sell to, and to boil it down to simple 70
  • language, the advice is not to take any shortcuts because there will be consequences. In medicine e.g. you are your own doctor – anybody can do the research on the internet to look into what these products contain and how they work, and the evidence. The same with cosmetics, the consumer are being more and more competent due to access of information, not only marketing. So these are 2 regulating factors that lead in the same direction. We are serious people doing serious science, so yes, to that extent the answer is yes. But there will always be players trying to cheat in any industry, it is up to us to compete against the not so serious players, and consumers will also eventually uncover what to trust and what not to. Helena – there are lots of barriers by big companies – but it is very strictly based on science what is out there. Consumers have a role also - if you take something that 90% of people liked versus actually looking into the efficacy data you are continuously allowing bad companies to put bad products on the market. – so you should focus on the efficacy information not the consumer appreciation data which is very subjective. Special thanks to Dr. Victoria Savoie-Swan, post-doctoral fellow in the Department of Biochemistry and Molecular Biology at Dalhousie University in Halifax for the note taking . 71
  • SESSION 3B: OPPORTUNITIES FOR SUSTAINABLE ‘NEXT GENERATION ‘AQUAFEED INGREDIENTS Sponsored by: Pierre Erwes Executive Chairman BioMarine Stephanie Block R&D Manager ADM , USA Pr. Simon Davies Prof. Aquaculture & Nutrition Plymouth University, UK Francisco-Saraiva Gomes Executive Manager Novus Aqua , USA Jean Pierre Rivery President Aquativ – Diana, France Key Take Away Message The steadily increasing population on Earth makes the sustainable production of food one of the major nutritional problems for mankind to address. Although the production of fish meal and fish oil has been relatively constant for decades, supplies of industrial fisheries are limited, and cannot support increased demand from a growing aquaculture industry. Finding alternatives is critical to the long-term sustainable growth of aquaculture to meet projected increases in consumer demand for safe, high quality farmed aquatic foods What are the alternative possibilities? - Existing commodities that have the potential for greater use in feeds include protein concentrates from grains or oilseeds and byproducts from animal proteins. - Novel byproducts from other industries include proteins re- covered from biofuel production or single-cell proteins produced from inexpensive carbon sources. - Other sources include fish processing wastes, trimmings and/or by-catch from fishing. - New products including meals produced from worms, insects, and marine invertebrates, and meals and oils from algae. From and Introduction Innovation perspective, regulations can hold up important technical advances and materials from new sources: Fishing and producing krill products, omega and meal sources. Regulations take a long time, and it causes some companies to stay away from some countries. The industry is facing an important challenge but governmental agencies should become more innovative and facilitate the development of these new ingredients. 72
  • Pierre Erwes: Over the past several decades, aquaculture feeds have become increasingly more efficient, environmentally-friendly and cost-effective. These impressive advances have been realized through a better understanding of the nutrient requirements of cultured species and by increased use of more sustainable feed ingredients, predominantly agricultural by-products and plant proteins. With improvements in seafood processing techniques and a growing  algal  biorefinery  sector,  there  is  now  tremendous  potential  for  the  development  of  a  ‘next   generation’   of  sustainable   aquafeed   ingredients. To understand these developments we have asked a panel of experts to give us share their view with us: Stephanie Block (ADM): ADM is an agri-prossessing company. 89 billion dollar business that is mainly into commodity crops for agriprocessing. ADM primary markets are human food, and biofuels, but half of production volume goes to animal feeds. We take our macro Ingredients and turn into something that is better for the final user. Not focused on aquaculture at the moment but looking into developing feed ingredients that can reduce reliance on fish meal and fish oil by the industry. Simon Davies (Plymouth university) : I am a Professor of aquatic animal nutrition and did my post doc in Idaho. My research is in the fundamental nutritional requirements of fish and applying it to companies in the aqua feed industry. Francisco Gomes (Novus Aqua): I am the Executive Manager of the Aquaculture Business Unit for Novus International, a 22 year old company focusing on feed ingredients for animal and human spaces. The Novus vision: “help feeding the world with wholesome affordable  foods”,   which  includes   sustainable   and   affordable animal protein for human populations. In keeping with this vision, Novus assesses when and where to dedicate resources, and in this vein the Aquaspace has been identified as a key focus area. Jean-Pierre Rivery (Aquativ – Diana): I am the President of the Aqua activities of Diana Group. Our mission is to turn marine resources into bioactive solutions to sustain health and nutrition functionalities of aquafeed, petfood and food. Within Aqua activities, Aquativ team focuses on providing feed manufacturers with natural bioactive ingredients improving aquafeed functionalities to raise healthy fish and shrimps. Working with raw material formulations, aminoacids, proteins, and raw material substitutes, we seek to achieve cost-effective feed efficiency improvements and sustainability. Pierre Erwes: Where are we for aqua feeds in the world? Francisco Gomes: Aquafeed is a diverse landscape, with most aquafeed production being a Chinese reality. The industry ranges from low quality low cost carp diets, ranging to the very different scene of salmon feed. The aquafeed industry is similar to other livestock feed industries in that it aims to achieve efficiency and performance. Feed represents about 60% of the operational costs of production. With rising raw material prices, it is imperative to reduce cost of feed per kg of fish produced. To that end, fish meal replacements are inevitability. It is a technical challenge that can and will be met. The question of fish meal and fish oil replacement is not only a question of nutritional requirements but also of performance. I see no single solution, but rather a portfolio of solutions being developed. I expect we will see specialty proteins, growth of functionality, and attention not just to nutrition but also to physiological aspects of nutrition. Diet will be the preferred vehicle for achieving health aspects in aquaculture, and this trend is leading this industry. However, there are challenges: it is much harder to vaccinate fish than livestock. To that end, there is currently not enough expansion nor rapid growth in aquaculture animal health.. The industry is currently dominated by low investment solutions. Simon Davies: China is a major player, very different from Norway in terms of approaches. Norway looks for efficiency, performance, as it grows. Feed is 60% of cost of production, so feed is the first area companies look to make efficiency gains and improvements. Companies purchase feed based on a cost per kilo of feed, but are increasing looking at the cost of the feed to grow a kilo of fish. 73
  • When there is the replacement of fishmeal, how to maintain health of the fish is a key strategy. When we are leveraging different materials we need to ensure the health of the fish is always a first criteria and welfare being paramount. Fish meal is a good material and a challenge to replace but major work is being implemented in this direction throughout the world. Heterogeneous   landscape,   without   fishmeal   we   don’t   have   a   source   of   DHA.   The   solution   will   be   a   portfolio of materials not one material. These will come from specialty proteins (sea weed), functional proteins. With these ingredients we can make it so that the feed does more than just meet the nutritional needs of the animal. Feed considered one of the main ways to improve the health of an animal. Nutritional component met with low cost feed, look to more expensive functional feeds to improve the health. Pierre Erwes: We have a number of members from Aquafeed companies here in the audience, EWOS, Marine Harvest, and INVE; Do you have any comments (audience)? Adel el-Mowafi, Executive Director, EWOS, Norway, aquafeed manufacturer, 60 to 80 percent of production cost is feed cost. 23 million tons of feed used world-wide today! Salmon feed is the most sophisticated feed, even though represents only 14 percent of production. Raw material is not the limit. We have enough material, with exception of fish oil for omega-3. Industry has had very good success in replacing materials that are limited. Last 10 years, have not increased the used of fish oil or meal thought they have doubled the production. Pierre Erwes: What will next generation of aquaculture feeds look like in twenty- fifty? Simon Davies: The main areas: interfacing immunity and intestinal health. In past looking at growth is not enough, I never thought we would be looking at the gut health, genomics, metabolomics, examining all these new aspects at such more detail than ever before. Can we translate it back to commercial use? I think we can. On  Replacing  fish  meal:  Crisis  from  the  80s.    We  are  seeing  a  cycle,  we  looked  at  algae  in  the  80’s  and  we  are  looking  at   it again. Can algae replace fish meal? Once we take out the oil, we are looking at the material that is left. We need to look at algae beyond just the oil fraction and determine its protein potential. Fish welfare is at the heart of the issue, when it comes to designing new aquafeeds, we need to ensure these feeds meet the needs of the fish and can raise health fish. Francisco Gomes: Insect meal could be one solution with interesting applications but not yet scaled up. Bacteria and single cell protein are also an underexploited resource. It will take time, but that this might become part of the portfolio of solutions. Jean-Pierre Rivery: The use of functional ingredients coming from fish by products in aquafeed is a good solution to bring added value to the industry. It allows manufacturers to decrease their production cost while improving feed performance. The use of good enzyme, amino-acids and protein in this respect should be investigated. Small companies producing locally can fix the raw material issue through added value and sustainability by using the 50% of total world fish production which is not used for human food. Pierre Erwes: How do you transfer veggie into a good aquafeed? Stephanie Block: Prior to recent times, we have been opportunistic and simply used ingredients that were available at the correct price points. Now with more cost constraints, we need a better understanding of the need of the fish. Developing targets (of the fishes needs) and then meeting those needs with appropriate diets. So we need a greater refinement of the fishes needs, this will help us develop optimal feeds to fit the need. Rather than see if the feed components that we currently have fit the need of the fish. Lots of potential in the plant side, we can do just about anything, but need to find out what that anything is. 74
  • Pierre Erwes: What does it take to develop a successful model in aquaculture feed? Francisco Gomes: It is best to be a start-up within a multinational. This achieves the agility needed within a context of solid backing. The essence of business models are reflected in asking yourself three questions: What am I doing to bring value not already being met? What am I doing differently from others? How will I execute/deliver that value in a constant and sustainable way? There can be numerous lenses applied to the answers/outcomes depending on your focus/objectives. E.g. Synthetic chemistry products are highly capital intensive while for Bioactives – the largest companies have increased fermentation capacity to a point where competing with their economies of scale takes a lot of investment. Some companies are good at cheap feeds. Other companies are good at high quality feeds. I see very little innovation in business  models  at  this  time,  with  too  much  “copy-catting”  currently  being  the  norm.    Animals  and  feed  production   need to be more closely and vertically integrated, if we wish more innovation to come about. Aquaculture has looked to livestock for business models but I believe we need to see more integration with the producers and see what their requirements really are Pierre Erwes: What are the bottlenecks to new aquafeeds? Stephanie Block: First five years, I worked on finalized diets using ingredients that have already been approved for feed use. Then joined ADM headquarters and started to develop novel feed ingredients. This is important to have regulations, and they are important to ensure safety. No countries regulatory agency seems to trust labs from outside of their country. This is very challenging, for small feed ingredients, because regulatory agency needs to have so many things in place. You need to have up to five different lots of product available. We need a more uniform acceptable template of regulations, and have those be similar across different countries. Francisco Gomes: I would say that we should try to avoid situations whereby an ingredient is not allowed in a certain market, without taking into account the fact that some f the fish imported into that same market, are produced in regulatory environments by which the same ingredient is allowed to be included in the feeds. This regulation framework disarray is nonsense and should go away soon. Veronica McGuire, Executive Director Canadian Food Inspection Agency (from the audience) - The CFIA is pursuing regulatory modernization, including the renewal of our Animal Feed Regulations which were last updated in   the   1980’s. Looking at how we regulate ingredients used in mixed feed, among other things. In doing so we are consulting with commercial feed mills and producer organizations as well. Our approach to premarket assessment and authorization of products is expected to change. . The CFIA expects that the new modern regulations will consider the scientific evidence and approval processes by other competent authorities. The new regulations will better consider what the intended purpose of the product is and the consequences to animal and human health. We foresee less of a role in efficacy. If there are safety repercussions from an efficacy problem we will get involved. However we will likely not get involved in safety product performance if there are not safety concerns. These are the types of issues we will be looking at over the next two years Tiago Pitta E Cunha- Senior Advisor Marine Policy to the Portuguese President from the audience: EU has complete set of complicated regulations, in Europe we add new version and add another version of EU regulations, to make them more complicated. When companies are trying to meet the regulations of various countries it is very difficult, the regs change, the regs are different. It would make life easier for companies and life easier for the cabinets of the government if we have harmony of the regulatory environment 75
  • From and Innovation perspective, regulations can hold up important technical advances and materials from new sources: Fishing and producing krill products, omega and meal sources. Regulations take a long time, causes some companies to stay away from some countries, which can be protectionism for the companies that are there if they are already invested in the regulatory scheme. Takes a long time to be approved, sometimes need to be patient. Small companies can have difficult time waiting for this. Jean Christophe Sergère, CEO Setubio France, from the audience: Regulatory in marine products: Each time you want to release a new product you need to prove non-toxicity of your products. This can be costly. Canada is one of the toughest places to get a new products approved. We must drop the non-sense aspect of regulation of aquafeed ingredients. All too often a country will not accept a feed ingredient, so a feed company sends that feed to another location, but then the original company will accept the end product that includes the ingredient (the fish). Simon Davies: Chromium – trace element (important) in china added to vitamin premix but forbidden here. We have demonstrated that chromium is an essential trace element for fish and in particular those like carp that can extract energy from carbohydrates. Eric Dropsy, Director Ingredys – Diana Group – France, from the audience: We produce a Fish protein isolate that is fat free and can be used in sports nutrition drinks. But regulation has been an issue for us getting products to market. Pierre  Erwes:  International  Collaboration  in  aquafeeds?  What  are  you  working  on?  What’s  happening?   Francisco Gomes: There are several examples of international collaboration including establishment of an Award for student internship and first Novus GAA Innovation Award. Our Research Group is very international: last year, there were almost 40 international collaborations. International collaborations are difficult, but necessary in this global industry. Patrick Lavens Business Director & Innovation INVE from the audience: We are collaborating internationally on specialty larval diets, new functional ingredients, working on getting rid of live feed diets or reducing them to bare minimal  requirements.    We  at  INVE  are  looking  at  things  the  normal  feed  mill  isn’t  addressing.   Pierre Erwes: How do look at next generation of aquafeed? Øyvind Fylling-Jensen – CEO Nofima from the audience: There are two ways to do this: Work with private companies to set up a project with an institute Or looking for competitive grants to move a research agenda forward. Two strategies required, no one wants to pay for long term risky projects, but we also need to meet the needs of the industry. How do you do this? We need to have good scientists that understand the needs of the industry and you need to have a good rigorous science platform to produce good science. Need to juggle lots of projects at the same time, and need to make bold moves to develop your research strategy for the future, to do this you need to have discussions with your client base. Stephanie Block: How do you develop new products? Our team of sales people are constantly asking customers their needs. Advice from Nofima (Øyvind Fylling-Jensen):  Don’t  ask  your  sales  people  for  the  needs  of  the  customers; they have a very short term agenda. Research directions need to be chosen carefully with a long term vision. 76
  • Andreas Ntatsopoulos – Management Foresee – from the audience We farm Sea Bream, which has a comparably high   FCR.   When   looking   at   feeds   we   don’t   look   at   the   ingredients.   The   cost   per   Kilogram   of  feed   is   a   factor   but   what   is   most important is how much of the Kilogram of feed turns into flesh of the fish. Feed cost increasing. When talking to farmers what do you think a farmer is going to say? The reality is the cost of the feed and the performance of the feed. Cost is per Kilo of fish, not per Kilo of feed. As a farmer this is what is important,  I  don’t  want  a  replacement  of  fish   meal,   I   want   a   good   quality  of   feed.     I  don’t  want   a   feed   that   doesn’t   have   the   same  performance.   How   low   can   you   go   replacing  fish  meal  in  feed,  if  you  can  go  to  zero  how  come  you  haven’t  done  It? Alf Helge-Aarskog– CEO Marine Harvest, from the audience: Still a long way to go to replace fish meal and fish oil, how low can we go? Right now as low as 7-8 % fish meal in the diets is the lowest we have, and they are working quite well. Simon Davies: How low can you go? Well we are evaluating the nutritional requirements of a species and we can do it, meet the needs with other materials to fine tune diets and achieve almost a zero fishmeal diet specification for certain fish species. More work should be undertaken on feed enzymes, not just replace fish meal, but get more out of the materials that are into the feeds. The stages and the rearing environment play an important component. Pierre Erwes? When you invest in an aquaculture company, what are you looking for in terms of species? What is your investment strategy? Robert Orr, CEO Cuna del Mar from the audience: We are a little different; we are really investing for paradigm shift, looking at offshore technologies, with environmentally sustainability and economic sustainability. Looking at cobia  in  Panama,  in  the  Caribbean  it’s  been  a  bit  unsuccessful.  We  think  we  need  other  species;  we  are  working  with   four different species on one farm. Working with indigenous species is important for environmental sustainability. We are trying to try a few new species with new technology, and optimize the productivity and economic performance of those companies. Pierre Erwes: What is your vision for the new development of aquafeeds? Max Holtzman Senior Advisor to USDA secretary, from the audience: Government regulation keeping up with technology. At USDA, we are trying to ensure aquaculture is perceived similar to agriculture and that anything in terrestrial space should be available to aqua space. The help from large companies like ADM will be helpful in moving aquaculture forward. We  need  to  brand  aquaculture  as  agriculture  and  increase  the  public’s  awareness  and  acceptance  of  aquaculture.   Thad Simons – CEO Novus from the audience: We have talked to the most suffocated areas of aquaculture, but not talked   a   lot  about   the   developing   areas,   and   the   producers   that   aren’t   here   with   us   today.   (Those   being   the   farmers   in   the developing world.) In aquaculture we are perceived as an inferior product. There is a perception that we have a poor reputation, with poor quality product, we really need to market ourselves differently because we are one of the most efficient areas of food production. We need to attract young people to the industry, this is the future. Consumers are looking for us to provide a healthy choice at a good price. Looking at salmon and where the growth is there are generally two talks: one on the sustainability in terms of growth and a second talk on the economic sustainability. At Novus with our feed products and expertise we feel we can be the solution to link all three pillars of sustainability in the salmon sector (env, social and econ). PART I I: FINAL THOUGHTS 77
  • Stephanie Block: New to the aqua space, liken it to the wild west of the 50s, wagon trains are moving. But great opportunity to refine the requirements of fish and growth the industry with a minimal carbon foot print. Simon Davies: There is a perception that professors are in an ivory tower. I hope that industry recognizes that we are looking for collaboration and your problems are our problems too. Jean-Pierre Rivery: Everybody is doing a good job trying to introduce added -value- in the aquaculture chain, but some are forgetting the one buying the fish fillet. It is very important to keep on focusing on the final consumer expectations and concerns throughout the value chain. Francisco Gomes: There is a waste of capacity by large corporations. We try to take use of the aqua market by rationalizing investment decisions vis a vis its small size. They are looking  at  their  “youngest,  poorest  son”  as  a  key   driver in decision-making. We need more focused investment in aqua so as to accelerate the market growth. Some of the largest companies operating in Aquaculture are aqua dedicated. Three out of the five largest feed companies operating in aqua are aquafeed companies. The largest fish farming companies in the world only farms salmon, and the largest animal health company in aqua is only aqua - which is very telling. 20 years ago, INVE paved the way with innovation and dedication. Innovation and investment are key to bring about aquafeed innovation in the future. Pierre Erwes: Here we are breaking the different silos of different areas of expertise between the different regions. It looks like the new developments in aquafeed will require more intense collaboration and more innovation. The industry is facing an important challenge but governmental agencies should become more innovative and facilitate the development of these new ingredients. We will continue to keep track of these evolutions and I suggest that both consumers and regulatory agencies will take a more active role in the next edition of BioMarine. Special thanks to Odette Murphy, BioMarine 2013 Local Director and Peter Sykes, PhD, Atlantic Veterinary College - University of Prince Edward Island for his help in the note-taking. 78
  • SESSION3C: MICROALGAE BIOREFINERY Sponsored by: Mark Bloom Director of Corporate Alliance and Technology Transfer Bigelow Laboratory for Ocean Sciences, USA Pierre Calleja Chairman, CEO & CSO Fermentalg, France Gaetan Fauvarque Market Development Manager Roquette Freres, France Stephen  O’Leary Director of R&D, Aquatic and Crop Resource Development National Research Council of Canada Miguel Verhein Executive Director Algasol Renewables, Spain Key Take Away Message: Microalgae Microrefinery "Over the past decade, there has been heightened global interest in sustainable biofuels production that, in turn, has sparked renewed interest in the use microalgae as a feedstock. More recently, algal biofuel companies have adopted a biorefinery approach (where biofuel is still the desired end product), but in which the sale of additional bio-specialty products derived from the algal biomass, as well as value associated with the bioremediation of biorefinery inputs (such as CO2 and wastewater), has gained economic prominence. In this lively and informative session, three industry representatives and one government expert explored the technical and commercial strategies behind economically viable and environmentally sustainable microalgae biorefineries." 79
  • Introduction Mark Bloom: The world is currently facing many serious challenges. A fast-growing human population and the consequent growing demand for food, energy and water are the most serious. In addition, anthropogenic climatic change is a severe threat to mankind and requires that current greenhouse gas emissions be significantly reduced to avoid detrimental consequences for the globe. It is clear that only the use of new technologies will allow us to bridge the gap between economic growth and environmental sustainability in the long run. Biorefineries are facilities that convert biomass – biological materials from living or recently-living organisms – into fuels, energy, chemicals and materials (and feed). The markets for these bio-based products are expected to grow very strongly globally in the coming years due to four underlying, irreversible trends: The economics of fossil-based products are deteriorating since conventional crude oil resources are getting scarce (setting aside for the moment the efforts related to exploit Alberta tar sands oil and shale-based hydraulic fracturing in the U.S.); The growing need for national energy security and geopolitical security; Public pressure for environmental sustainability is increasing due to an increasing environmental awareness; and Rapid demographic growth will drive demand supported by rising economic aspirations of developing countries. These fundamental trends have triggered a vast interest in bio-based products and have placed them high on the strategic agenda of most players in a variety of industries. Despite the great relevance of bio-based products for many industries, experts still see numerous technical, strategic and commercial challenges that need to be overcome before any large-scale commercialization of algal biomass-based industrial products can succeed. Critically, biorefineries will have to employ the best possible technologies to ensure that bio-based products break even. This will require the concerted action of many non-traditional partners - such as biomass producers, chemical companies and technology players (including academic centers) - to cover all aspects of the complex biomass value chain, from feedstock production to end-user distribution. Today's panelists explored these and other issues of importance as they relate to the microalgae biorefinery industry. Before we begin our discussion, I'd ask each panelist to briefly introduce themselves to the audience. Pierre Calleja- CEO, Fermentalg, France: My background began in marine aquaculture in the 1980s where I ran the first marine fish hatchery in Europe. In 1992 I started to work on microalgae where we reproduced microalgae at a commercial fish hatchery. I founded Fermentalg in 2009, after 20 years of work in the microalgae sector. The new microalgae that we have are the best of animals and plants as most are mixotrophs, capable of light photosynthesis and using carbon through auxotrophic pathways. Fermentalg is the leading company in Europe for this kind of dual energy source microalgae technology. Its patented technology allows it to target global markets from nutrition, animal food, green chemistry, cosmetics & health and biofuels. We work with major industrial groups to develop products or molecules from the microalgae, new microalgae strains, growth rate analysis, process development and eventual industrialization 80
  • Gaetan Fauvarque- Market Development Manager, Roquette Frères, France: Roquette is among the top five starch producers in the world. Historically, our productions were derived from corn (maize), wheat, potatoes and peas. In 2006, we started looking at new sources of ingredients for nutrition and health and thus started a micro-algae research program (Algohub). Our microalgae research encompasses process techniques, species and strain diversity, nutritional proofs and industrial facility-scale production. We have large production facilities for autotrophic and heterotrophic microalgae production. Our autotrophic facility is in Germany and our fermentation facility is in France.  Roquette’s  primary   markets  are  the  food  and  animal  feed  markets  for  protein,  lipids  and  pigments.     My role is to develop our microalgae business by pushing projects with customers for our already developed products but also by listening to their needs to orient our R&D and make sure that our innovations meet the market demands. Stephen  O’Leary- Director of R&D, Aquatic and Crop Resource Development, National Research Council of Canada My interests are in carbon recycling technologies and microalgae research is a primary focus. We are interested in a biorefinery approach to the remediation of industrial wastes including carbon dioxide and wastewaters. NRC’s primary research station located in Ketch Harbour, Nova Scotia, where we select algal strains for their ability to generate algal biomass and act as CO2 sinks and/or absorb phosphates and nitrates from residential waste streams. The NRC is also working with industrial partners like Canadian Natural Resources to create a network of algae carbon conversion demonstration facilities in northern Alberta and other industrialized areas. Our goal is to demonstrate that we can use microalgae to remove CO2 at industrial sites in Canada. We want to reduce the carbon footprint in industrialized areas of Canada Miguel Verhein- Executive Director, Algasol, Spain Miguel is the inventor of photobioreactor (PBR) technology and Executive Director of Agalsol. The role of Algalsol is that of a microalgae growth sector provider. We are currently interested primarily in commercial microalgae biomass production and our PBR technology provides the most cost effective growth system available. Our products are in use in Arizona and South Africa. Discussion Point 1 - Feedstocks Mark Bloom: Bio-based products can be manufactured from various feedstocks. At present, there is no feedstock or process that would make these a clear alternative to fossil-based products. There are many options available, each with advantages and disadvantages. Two categories of feedstock dominate research: first and second generation. First-generation products are manufactured from edible biomass such as starch-rich or oily plants (e.g., corn or soy beans). Second-generation products utilize biomass consisting of the residual non-food parts of current crops (e.g., corn stover) or other non-food sources, such as perennial grasses or algae. The latter sources of biomass are widely seen as possessing a significantly higher potential to replace fossil-based products. This session is concentrating on algae - more specifically, microalgae. Let's start the session with a very simple question: Why Microalgae? Gaetan Fauvarque: Lipids are the most important component for Feedstock. Microalgae research and development has identified many strains with a wide diversity of lipids. Microalgae is an excellent starting material for lipid isolation because: -Microalgae  production  doesn’t  require  much  arable  land.     -Small scale production is possible in most part of the world. -Microalgae can be grown under autotrophic or heterotrophic conditions. -Autotrophic  production  can  be  used  in  places  where  you  can’t  grow  anything  else  (deserts). 81
  • -Heterotrophic production is very flexible because different strains of microalgae grow on many different materials. Stephen  O’Leary:  Biomass and lipids are easier to produce. Biofuels require a large volume and nutraceuticals are more small volume. Gäetan's arable land comment is also very important. The main interests at the NRC are for research into the biology and growth rate of microalgae. Microalgae growth can be prolific in certain conditions with a doubling of biomass in days vs. weeks or months for other technologies. This can be linked to carbon assimilation and as an excellent feedstock because it has starch, carbohydrates, proteins and lipids. All of this is from CO2. Industrial processes that produce a large amount of CO2 love  microalgae’s  potential  because  it  takes  CO2 out of their waste streams. Pierre Calleja: Microalgae is very important. Bacteria and yeast have been important for decades but now microalgae are being recognized for their huge potential. Microalgae were the first animal or vegetable cell. This is very important in evolution because everything has been built on microalgae. They produced the original molecules that we are made of. DHA only comes from microalgae. Our brain lipids come from microalgae and we are connected to them. Pigments used by animals and humans for biological processes originally came from microalgae. Discussion Point 2 - Conversion Techniques Mark Bloom: Depending on the feedstock and the desired output, biorefineries employ a variety of conversion technologies to transform raw biomass into a commercial product - whatever that product may be. New and less traditional methods are constantly being investigated. Novel chemicals and materials produced from biomass are also currently available, but are much less developed at a commercial level compared with biofuels. Question to the panelists: Please describe current trends regarding conversion techniques in the microalgae biorefinery industry and the reasons why you think certain conversion techniques may or have gained favor in this industry. Pierre Calleja: We can make many molecules from microalgae including small chain (C4-5) or long chain (C35-36) organic molecules. We can make oil for energy but this is a low value, high biomass molecule. For economic reasons, it is important to concentrate on the high value molecules first. We can also use carbons to transform energy, or convert urban or industrial waste into safer products. Industrial waste streams can act as microalgae substrates offering a very cheap source of energy and offer countless environmental benefits. Gaetan Fauvarque: Biomass state is valuable, as is the extraction of high value and complex molecules such as lipids, pigments etc. The nutraceutical market is also important because microalgae can be used as a biomass raw, or can be mixed with more sophisticated molecules. Microalgae have complex and interesting compounds, and as a biomass, they already have values raw or through extractions. Stephen   O’Leary:   I would like to share some of my observations on the industrial use of microalgae. In 2007, the idea was to make biodiesel through the transesterification of lipids. Shortly after, less than two years later, we saw that we can hydro-process microalgae lipids to fully hydrogenated molecules which can then be cracked to make biojet fuel. There is value in the entire microalgae biomass because the lipids are important but the carbohydrate and proteins also have value. All fractions are important. We can create value for the whole product to help produce animals, or for the functional food markets. There is also another important use and that is in bio-remediating industrial waste streams. This involves remediating CO2 or nitrates and phosphates from water. This can create a biomass for lipid extraction for biofuel, and the chemical conversion of other macromolecular pools, carbohydrates and proteins, to other high value molecules. 82
  • Microalgae can be used to create a soup of carbon-containing compounds that resemble the hydrocarbons of various lengths found in crude oil. This can be used to make petroleum like products such as plastics. There are a plethora of uses for the microalgae biomass which can meet a variety of needs for renewable feedstock. Miguel Verhein: High value products are where most companies are currently focusing. There are undoubtedly microalgae  that  we  haven’t   yet  discovered that will be very important. Growth factor is going to be very important. We need high value products to consolidate industry across the value chain. Stephen  O’Leary:  I  agree  with  Miguel’s  comment  on  the  current  focus  of  high value molecules because our current microalgae cultivation scale is high value at low volume. My concern is that as we more broadly commercialize large scale production, high value molecules will saturate their markets. I see new markets coming up for high volume compounds that are not just for biofuel. Gaetan Fauvarque: I  can’t   agree  with   Stephen.  The  high  value  market  is  not  just  for  PUFA  but  also  for  other  lipids   and high value protein and pigment like astaxanthin, vitamins and minerals. Over producing biomass will saturate some markets, but there are many other markets allowing diversified potential Miguel Verhein: I agree with Gaetan. There is currently very high production of astaxanthin that is worth a lot of money. We saw a similar trend in 1980 with soy beans. That market was saturated with producers but the market is still around. Markets will balance out but we need transparency across the stream, from the growth stream to the downstream biomolecule isolation. Pierre Calleja: Thirty  years  ago  they  said  you  couldn’t  make  money  on  marine  fishes.    There  was  3,000  tons  of  sea   bass being produced in the Mediterranean. There were early worries that there was going to be too much sea bass. Now, you need 10,000 tons of sea bass per farm to be feasible or you are dead. Most farms need 50,000 tons. The EU only needs 250,000 tons and we are far from that for omega 3 isolation. Omega 3 production from plants is the proper molecule that we need. We have to produce more omega 3 from microalgae but it accounts for only 3% of the production. Fish oil is the major source for omega 3 but it is a dirty source, contaminated with pesticides, pollutants etc. Production of omega 3 from fish is going down and microalgae production can pick up the slack. Miguel Verhein: We need more production from our growth systems. We have less and less land available and must move to the marine environment to produce valuable molecules. Discussion Point 3 - Optimization and Efficiency Mark Bloom: A biorefinery is a facility that integrates biomass conversion processes and equipment to produce fuels, chemicals, feed, materials and energy from biomass. The objective of a biorefinery is to optimize the use of resources and minimize wastes, thereby maximizing benefits and profitability. Biorefineries will encompass a variety of conversion processes and different sized installations due to the range of processes - biological, chemical and thermal - that can be employed. Optimization and high efficiency are the keys to making biorefineries sustainable and economically viable. Optimization can be achieved by future development in five key areas: Technology; Exploitation of the chemical energy contained within the biomass; Logistics; Economics (i.e., business proposition/model); and 83
  • Sustainability. Question to the panelists: Please pick one of these key areas and give us your thoughts on current trends and future challenges as they relate to the microalgae biorefinery industry. Stephen  O’Leary:  I will pick economics as it encompasses the other four as well. Industry partners are interested in developing technologies for the production of outputs of sellable products. Economics always comes into play for everyone along the supply chain. - There is interest in technologies at many stages: - Technologies that support massive biomass production. - Technology to produce the appropriate molecules and chemicals. - Processing technologies that can produce the outputs at similar or lower cost with increased efficiency. - Technology is very important for the industry. To produce products you need to know the economics to make this profitable and the standards required for consumers to buy products and thus draw investment. Sustainability is critical for economics. Industrial partners are involved because they can make their core business more  sustainable  by  biologically  mitigating  industrial  emissions.    They  don’t  always  care  what  is  produced, but if they can derive marketable products from their waste streams this is preferable. If you can cultivate microalgae on the back of an industrial process like generating fuel or energy, then it is a benefit as you have a profit with no incremental cost. If there is no economic advantage, then the technology with not be developed. Miguel Verhein: I agree with Stephen. The current tube bioreactor costs are enormously expensive at 8-11M$/ ha. The price needs to come down. Agalsol can offer a closed bioreactor for $53,000/ha using a shallow depth bioreactor with high production and high efficiency. Growth from carbon sources, etc., is currently being developed. The price will drop as more and more people get involved. Gaetan Fauvarque: I also agree with Stephen. Economics drive the industry. Microalgae have already met their market but they are niche markets: infant formula, fish and fish hatcheries, nutraceuticals and cosmeticals. These are small markets that can justify the high costs. It will be down to economics in mass markets for consumer foods. An example is an aquacultural food producer who wants omega 3 from microalgae but it is too expense to get it from microalgae compared to fish oil. Stephen  O’Leary:  I would like to build on what Gäetan has said. How do we optimize economics? It may be economical on a certain scale for certain product. How can we cultivate on larger scale for products of lower value? The trend is diversification of products from microalgae. Earlier products were high value PUFA, astaxanthins, etc. New products will be larger volume commodities like fuels. If we compare low value and high products together, then no one is looking at fuel alone. Most large cultivations are looking at fuel, and platform chemicals and/or nutraceuticals. It depends on the biomass and the markets to which that company has access. It is also not just downstream products that are important. There is value in the products and process upstream. An example is the value in environmental remediation that occurs with the creation of the biomass that leads to the desired products. The economics involved more than just the cost of products from microalgae production, but also from  upstream  processes  like  redirecting  a  company’s waste CO2. Industrial emissions have a cost to the company. Industry loves when it can turn a cost into product with value. 84
  • Discussion Point 4 - International Efforts - Algae Biofuels Mark Bloom: Generally speaking, all biofuel-producing countries have a mix of mandates and subsidies in place to support their national biofuel industries as a means to increase fuel supply security, CO2 reduction or local economic development. Biomass-based power production is supported by similar measures. Subsidies can be generous, but vary from country-to-country, even within the same region. In other words, governments can accelerate progress or they can hinder progress. Question to the Panelists: Please describe a microalgal biofuel development effort that is currently underway in your home country and how you or your company interfaces with that effort. Governments can help or hinder process with reference to biofuels. Miguel Verhein: The question is interesting and not directly related to only biofuels and higher value molecules. Growers  don’t  relate  to  governments  very  much.    In  South  Africa  there  is  large-scale unemployment of farmers and they need to supplement their income by producing additional sources of protein. The South African government is developing algae parks to train farmers to grow microalgae to supplement their income and increase protein intake. They also help farmers collaborate with scientists, government and industry. Algasol is producing a scalable and modular production system and we can help diversify the industry. A farmer can use several different strains, and not just a high value strain. The government also assists them with centralized labs. The South African government is supporting the development of the algae growth/ production sector. Stephen  O’Leary:   From a Canadian context, policy can help support algae biomass production. It is a renewable fuel standard (RFS) that requires fuels to be blended with renewable resource, oil seeds, ethanol etc. In this way you get a market for a fuel product but it offers you no premium. The market still exists even though it is small and not so lucrative. The real value is to remediate agricultural, urban and industrial waste. Some wastes like carbon are subject to a utilization tax in some jurisdictions. If you can incorporate CO2 from waste, then you have a financial benefits at both ends. There is a financial penalty for phosphate, nitrate and ammonia discharge into surface waters because they cause environmental degradation. Plants that treat wastewater would like to generate a financial stream from remediation. Discussion Point 5 - Revenue Potential of Microalgae Biorefineries Mark Bloom: In addition to the revenue potential offered by algal biofuel, the microalgal biomass value chain also offers attractive revenue potentials at its other stages, of which a significant portion may be captured by the microalgae biomass industry. Some examples are: algal biomass production itself, technology development for use by others and biospecialty products - that is, products other than biofuel. Question for the panelists: Please provide your thoughts on where the revenue potential of the microalgae biorefinery industry is now and where you think it might be in 5, 10 or even 20 years in the future. Gaetan Fauvarque: Biofuels hold significant potential but this will be far in the future because it is not currently economical. The current interest is in markets associated with nutraceuticals, cosmeticals (extracts and biomass), high value molecules and for aquaculture hatcheries. I foresee different stages and as each market matures, we can move to larger markets like biofuels and consumer markets.     We   shouldn’t   focus   on   one   market,   but   diversify   to   reduce risk by relying on multiple markets. Technology transfer across sectors will be important. Pierre Calleja: Biofuel  production  is  impossible  for  the  time  being  because  we  don’t  want  to  pay the price. Biofuel can’t  compete  with  fossil  fuel.    To  travel  1  km  it  costs  100  times  more  with  biofuel  than  fossil  fuel.    We  will  have  to   wait for a competitive price. The next phase is for the petrochemical chemical industry where we can produce microalgae based chemicals and reduce the impact of CO2 emissions. At this time we can only access high value chemicals and every day we are reducing the production costs. Green chemicals at very large sales is possible in the near future. 85
  • Discussion Point 6 - Strategic Relevance of the Microalgae Industry Mark Bloom: As I mentioned in my opening remarks, bio-based products are likely to become ever more important for various key industries in the future due to four underlying, irreversible global trends: Demographic growth and rising economic aspirations of developing countries; Need for increased geopolitical energy security; Deteriorating economics of fossil-based products; and Ever increasing public pressure for environmental sustainability. Question for the Panelists: Please provide your views as to the impact of these global trends on your or your company’s  activities.    Are  there  any  other  global  trends  of  which  the  audience  should  be  aware?     Pierre Calleja: I am convinced that microalgae are important for humans. Microalgae made our oil, atmosphere from photosynthesis and made our oxygen. We will need to use these abilities to sustain our future. Microalgae are so important   for  the  development  of  life  that  I  can’t  imagine   not  needing  them  for   our  future. I completely agree that heterotrophic and auxotrophic production is very important because it uses no pesticide. We can produce green chemicals with very little energy input. Gaetan Fauvarque: In a few decades we will lack animal proteins and need alternative sources. Microalgae is a source and solution that can meet future challenges. Microalgae production can overcome the impending demographic situations and economic situations that humans will face. Stephen  O’Leary: I would like to pick up on Gäetan’s  comments.    We  have  a  role  in  aiding  the  economic  aspirations  of   developing countries. The list is compelling but the prioritization of items on the list depends on where you are in the world. We can take comment 3 for example, people look at that differently if you produce or consume fossil fuels. There is increasing public pressure on energy security, high level of environmental stewardship and sustainability and this drives biorefinery growth in the industry I would like to add on to future trends with the pressures for environmental sustainability. Microalgae interest will be increased by the desire to remediate degraded areas. Microalgae remediation already has an impact in the agricultural, industrial and urban waste sectors. Discussion Point 7 - Key Challenges of Commercialization Mark Bloom: There are currently many challenges facing the microalgae biorefinery industry. These include: Technical challenges; Commercial and strategic challenges; and The sustainability challenge. Question for the Panelists: Which of these challenges most often keeps you up at night and why? Miguel Verhein: If we have more biomass then it is easier for downstream processors. This brings down the price to the biomass itself. Transparency is better for clients. 86
  • Stephen  O’Leary:  The sustainability challenge keeps me up. This has to do with our industrial partners’ needs and what they want. Perhaps they want to reduce waste products and use their waste stream to commercialize a product. This makes for a great business case because it is economically feasible if it is cost neutral or profit generating. Nothing  will  happen  is  it  isn’t  sustainability. Miguel Verhein: Cost neutral makes me nervous. Stephen  O’Leary:  What I mean is adding to core business with no increased cost but it has an environmental benefit. Gaetan Fauvarque: Stephen has mentioned most of the important points. From a commercial point of view, many strains need many markets to sell into. You need to educate markets as some want it and some need  it  but  don’t  know   that they need it yet. If we can educate people to the potential then we can create market demand. The technical challenges are important and are holding up progress because this will drive costs down. Miguel Verhein: Market education is important. There are products that will improve our quality of life but consumers  don’t  know  it  yet Pierre Calleja: Microalgae can now divide and never die, or die much later, and it is being studied and there is something in cells that allow it. Miguel Verhein: Spirilena added to yogurts. Gaetan Fauvarque: Many pigments (blue M&Ms, pistachio) used in food products are isolated from microalgae. Microalgae are very important for green chemistry, lipids, nutrition, health, remediation and biofuels. The industrial bioremediation work is only recent and it gives a lot of hope for the future. Question from audience: Sustainability   and   carbon   sequestration   is   good   but   we   can’t   grow   microalgae   to   a   high   enough density and large enough scale. When do you see high density? Miguel Verhein: We have to wait for the demand. With demand you get companies focusing on problems and economics. Government need to support the penetration of the industry. Governments are currently supporting those who need it. Stephen  O’Leary:  Increased demand will drive a need for commercialization of technology. Good business plans will also drive commercialization. Good systems exist for certain scales and we have many different systems that work predictably. There is an engineering problem to scale up but companies and engineers are good at that. Technological challenges are ready to be overcome in short order. We need compelling business cases to drive investment to bring us over the last 10 %. Within the next 3-5 years, as long as we maintain compelling business cases. Miguel Verhein: We could be closer that we think but we never known. We have to work hard at it. Special thanks to Fraser Clark, Postdoctoral Fellow in the Department of Biomedical Sciences and a Research Scientist at the AVC Lobster Science Centre at the University of Prince Edward Island for the note taking . 87
  • PLENARY DISCUSSION: INTERNATIONAL PERSPECTIVES ON MARINE AQUACULTURE Sponsored by: Francisco Saraiva Gomes Executive Manager Novus Aqua , USA Alf Helge Aarskog Chief Executive Officer Marine Harvest, Norway Max. Holtzman Senior Advisor to the Secretary and Acting Deputy Under Secretary, MRP. , US. Department of Agriculture, USA Tiago Pitta E Cunha Expert on International Maritime Affairs and Ocean Policies, Portugal Ruth Salmon Executive Director Canadian Aquaculture Industry Alliance Robert Orr, CEO & Managing Partner Cuna Del Mar LP Key Take Away Message: Microalgae Microrefinery The Plenary discussion on International Perspectives on Marine Aquaculture was moderated by Francisco Saraiva Gomes, Executive Manager of Global Aquaculture for Novus International, and included a diverse panel of experts – Alf-Helge Aarskog, CEO of Marine Harvest, Max Holtzman – Special Advisor for the U.S. Secretary of Agriculture, Ruth Salmon, from the Canadian Aquaculture Industry Alliance, Tiago Pitta e Cunha, Advisor for the Ocean to the Portuguese President of Republic, and Robert Orr, CEO of investment fund, Cuna del Mar. The Plenary discussed in depth some of the critical aspects required for the development of Marine Aquaculture. Amongst those, one that was much referred to concerns the different models such as Cage culture and RAS. Both models are required to optimize the balance, between efficiency, fish health, quality and pollution. 88
  • The question of efficiency of production versus quality of production was also emphasized. It is imperative to educate the markets but also to listen to consumers perception on why more value is given to output of less efficient systems. As expected, the panel also addressed the centrality of fish meal and raw materials availability as sustainable marine fish industry can only develop with sustainable nutrition sources. Following the comparison with the salmon industry, the Panel also highlighted the importance for policy makers to identify new zones of production because for production to be sustainable it cannot be all concentrated in few sites. Finally all panellists were keen on the issue of transparency and third party certification and further dialogue with all the stake holders, including NGOs, and why and how the government has a real convening power to enable a long term oriented discussion on the requirements for industry development and sustainability. Three minute intro on experience with marine aquaculture business: Ruth: Our association consists of shellfish and finfish producers, feed companies, suppliers, and regional aquaculture associations. Membership is available to anyone advocating for the growth of responsible, sustainable aquaculture in Canada. We are leaving behind a world of food surplus and entering food shortages. We need to increase and improve our ability to produce healthy food – healthy protein. Aquaculture employs 14,500 Canadians. The Canadian Industry has flat lined in production, is stagnant. Our market share in the world has fallen by 40%, despite our natural advantages: geography, people, water resources and proximity to market. A Cumbersome regulatory framework is responsible for this stagnant growth. Our association has a new strategy to advocate for legislative and regulatory reform to allow the Canadian industry to fill the demand for seafood. Robert: Co-managing founder of Cuna del Mar, with Glenn Flanders. Family had two major concerns, Food security to feed 9-10   billion  people.  Don’t  see  current  wild   or  current   operational  practices   being   environmentally  sustainable. Fund created to take tech and use the vast areas of the oceans to grow protein and honor the fish and environment where they are grown and make a profit. Max: US perspective, currently we import 90 of seafood we consume. Of that 50% is produced in aquaculture. Current US trade deficit of approx. 11billon, compared to a trade surplus of 40billon from terrestrial Agriculture. This is an issue, and if not a big one now, wait till we go to 10 billon people and there are food shortages. As I see this industry grow, there is the opportunity for a tipping point in the US, in both off shore and RAS. We are working to have aquaculture viewed as agriculture. Not worried about demand side, but the supply side. Need to get out of our own way in terms of regulations. Tiago: Working to promote maritime affairs and a blue economy. From a European perspective aquaculture is an uphill   battle,   hasn’t   grown   since   turn   of  century.   More   political   attention,   more   investments   from   public,   so   should   be   some increase. Portugal has large processing industry but small aquaculture industry. Aquaculture is about ocean sustainability, fisheries are not sustainable with the increase in global demographics. New ocean governance, need to have spatial planning for aquaculture to develop. Alf: Started when I was 15 feeding fish. Why am I in this industry? The potential far out weights the challenges and the   threats.   Marine   Harvest   is   working   together   with   governments   in   21   countries,   farming   in   6,   it’s   only   our   own   minds putting a limit to the industry. Glad to hear that regulators are hearing our concerns. I spent 4 years growing salmon in Maine, sounds like things are improving. 89
  • The industry does need to be regulated, we have seen this need based on what happened in Chile. If any industry is going   to   be   sustainable   it   has   to   be   fish   farming,   cause   if   we   don’t   manage   growth   carefully   we   will   have   environmental feedback, economic problem and this leads to social problems (like in Chile). Francisco: We are tired of the idea that aquaculture will save the world, how do we execute on this? One of the aspects that resides within the debate is about the production models. RAS and Cage culture. Do you see competition between the two models? Max: In US debate on what models of production should be used/promoted? RAS or marine farming? Is there a competition between the two? We need to solve problems; we need to be conscious about not creating problems. Some RAS folks talking about the benefits of their industry but at the expense of other industries like net pen operations. Need   to   be   sure   we   don’t   start   infighting.     At   USDA   we   love   all   our   children,   we support all types of growing methods/technology. Farmers should have choice. Need to have a perspective that a rising tide lifts all boats, don’t   take   away   from   the   competitive   nature,   but   be   sure   not   to   knock   other  aquaculture operations because it may impact you down the road if the industry as a whole is negatively affected. New scales of RAS farms are co-provider of technology for marine production. Francisco: Following this line of thought and knowing that Salmon industry has pioneering the development of both models, using RAS for large smolt farms and Onshore cage systems for sea water stages, what constraints do you see for the development of marine aquaculture? Alf: We need to grow fish in the most energy efficient way there is. We then need to balance this out with fish health and potential for pollution. So there is no, yes or no for RAS. We need both open net pen and RAS. Yes and Yes. Francisco   to   Ruth:   Tell   us   about   the   Canadian   landscape   that   has   lots   of   producers   and   NGO’s,   and   how   that   diverse landscape brings light to the specific question of optimizing footprint in both models Ruth: Every   industry   has   a   footprint;   NGO’s   often   don’t take into consideration there must be a balance between environmental footprint and economic growth. The industry has made huge progress in gains in environmental sustainability: escapes, feed, FCR, site selection. Regulatory red tape and a complex regulatory and policy framework are preventing us from doing more within the existing foot print. Lengthy and delayed licensing and amendment processes are preventing us from realizing an immediate production growth of 25%. Another good example is that complex and antiquated regulation is preventing innovative ideas like IMTA. To comment on RAS systems, there is a role for everything. There are many small scale RAS projects that provide the market  with  niche  products.  However  we  haven’t  seen  RAS  systems  that  are capable of supplying the global Atlantic salmon  market.   They  just  aren’t  there.   Water,  land  and  power   needs  are  high;   requiring  RAS   facilities  to   be  located   close to the final market – which will have impacts in our rural communities. Where we are challenged in Canada is there is a general misunderstanding that if we move from ocean net culture to land  based  culture  all  our  problems  would  be  solved.  This  just  isn’t  the  case. Robert: We talk often about one species, you mention you believe in diversification. What is diversification in aqua and what value could it bring to the industry? As a private equity fund, we are investing where many others would not, based on ROI, timelines and the inherent challenges of the ocean. We are thinking long term, trying to do a paradigm shift. This is similar to our approach on diversification of species. Of course those that are culturing the 4-5 animals we currently culture are advancing at great rates, but long-term we don’t  think  we  should  be  using  these  4-5 animals to feed the world. Long term we need to look for new species, we need  to  diversify,  we  know  it’s  a  long  road  but  feel  it’s  an  essential  road  for  the  future.   90
  • Francisco to Tiago: Efficiency vs. quality do you think there is a trade off? Is this impossible? Tiago: Public perception feels there is a trade-off, organic appears that is less efficiency, but better quality and people are   willing   to   pay   more.   I   am   surprised   by   the   growth   of   the   organic   industry.   It’s   a   customer   perception,   but   from   where? Aquaculture has less quality as a perception. The perception changes with the species (shrimp, salmon and sea bass (bass must be wild) perception? There is an idea that fresh farmed fish travels too long, so no longer fresh. Sustainability wise, wild fish is not even an option, not sustainable. In terms of welfare there is the perception that farmed fish are crammed. The welfare of a wild fish is not perceived as a fish that is hooked and killed by asphyxiation. Wild harvesting is much different than one that is raised and harvested humanly in aquaculture. We know fish consumption is good for your health, 250g per week in EU. Approach like we did with smoking, need to say fish consumption is good for your health. Francisco: US is the largest exporter of Agriculture products in the world and has the largest consumer market as well. The development of the Aqua industry in the US is very much tied up to the issue of new areas of production? Where do you see the possible development of the US Aqua industry? Max: We grow a lot of beans, put them in ships and those beans come back as fish. We need a regulatory framework to  allow  the  development  of  aquaculture.  NIMBY’ism   is an issue and there is also a small community of people that work through misinformation. Stigma and perception is king. Info moves so quickly, disinformation and misinformation travels so quickly. Lots of loud vocal minority putting out bad information and very good at what they do. The more they keep the discussion in the good vs. bad, black vs. white, the more money they can attract. Aquaculture today is different from 20 years ago, the industry needs to get the good word out. NOAA, has a gulf coast plan, Florida and Louisiana, going to get some projects into the water. Maine and Florida both aqua friendly states. There is a huge potential for growth, and there are ways for us to do this with responsible regulation.    Investors  can’t  assign  risk  to  the  development  (due  to  regulatory  short  comings).  This  is  causing  capital  to   leave the US. However with good regulations, we will slowly see the development in the US. Francisco to Alf: How do we tidy up the development of sustainability from our current locations and how can we bring that to sustainably occupy new locations. Alf: 90% of aquaculture is in Asia, Salmon is only 1%. There are new areas for salmon. In Russia, they are expanding. Greed in this business has destroyed a lot, in Chile they have grown to fast after the collapse in 2008. With the redevelopment in 2010 they have grown too fast, they will fail again. Transparency, third party certification is the key to unlock the lack of knowledge customers have about our practices. If we begin today to raise cattle, I think people would be scared to learn that cattle are shitting on the ground. Feed, raw material supply. This is the biggest area for sustainability. Of the 1 million tons of fish oil, 80% goes to aquaculture, there will be no more. It is stable and more and more goes to human food. We need to find replacements to grow. To politician’s,   we   need   to   set   areas   to   grow   aquaculture.   If   you   want   to   build   a   house   on   agriculture   land   that   is  a   problem, as it has been designated as an area to grow food. We need areas to grow. When we look at all the areas for other purposes(sailing, vacation homes, national parks), there is nowhere left. Policy makers need to make new zones, when protecting farming areas in the ocean, we need dialog. Francisco: What are some platforms for dialogue that we can use to enable the process between the stakeholders? 91
  • Ruth: In terms of dialogue: We take developing social licence very seriously, we do have social license to operate in the   communities   where   we   operate.   .   That   doesn’t   mean   that   we   don’t   continue   to   develop   good   dialog   with   community stakeholders. We disseminate credible data. Third party certification, verification of environmental and social measures is important. Global certification also, provides some consistency across different countries. Industry is an important community player but Government needs to play a role, by developing good regulations and communicating those regulations to the public. This openness and transparency will go a long way to increase public acceptance and awareness. Companies are investing more in public awareness, there is always more to do, but industry has learned a lesson. When the industry started, we focused on the technical aspect of our business - but now we see the need for dialogue and communicating our story. We do have social licence. Industry polling confirms, we have general public support for responsible aquaculture development across Canada. However, we sometimes only focus on the vocal minority. (the opposition groups). Max: I agree Government can play a role, as a convener, bringing (AC 21) people from different corners, bringing them to the same table and coming up with consensus. There are reasonable people in these different camps. The more conversation we have the more middle space we can open up and then we can focus on the issues that matter. In Government we are guilty of thinking in clips of 2 to 4 years, not take a longer approach and looking at what should happen in the next 30 years. Francisco: Where do we see the greatest inefficiencies in the value chain? Where are we lagging? Robert: Inefficiencies in the value chain vary buy the region, Japan is very efficient. The US system needs more vertical   integration.   I   don’t   think   the   financial   sector/money   brings   insight,   intelligent   people   bring   insight,   money   just brings energy. The value comes from new ideas, from using tech and innovation to solve the problems. When you change the feed you change the taste. Current motivations are can I get it to grow quicker, can I get to market size faster. Not can I grow a healthier fish. We need to have a more holistic view of cost. Francisco to Tiago: How to increase innovation? Tiago: It’s  a  combination  of  science,  technology,  and  policy  making. Aqua is a science based industry. We need technology development in RAS, energy efficiency and offshore equipment. For policy innovation: spatial planning is critical. By-catch needs to be landed, that is an element to improving the sustainability of the global food resource. Public and private investment, public money provides the ecosystem of innovation, so can private, big companies. In Europe in 2012, the biggest barrier to aquaculture production is financing. For new comers to the industry public money is more available. Natural resources are becoming a more important Francisco: We have private equity, but  we  don’t  have  venture  capital.   From Audience: If you grow it they will come? Is aquaculture really agriculture? Is innovation really integration? Max: Aquaculture is Agriculture, organic is an example. Organic is growing in the US, mainly by programs for financing,  extension.  Aquaculture  should  have  that  same  access  to  get  started.  Farming  doesn’t  end  at  the  shore.   Thierry Chopin, UNB: My view is different than your view of Diversification in this panel. I view diversification as multiple species converging on a single farm. Robert, do you invest in IMTA? 92
  • Robert: We  don’t  invest  in  IMTA,  because  it’s  not  a  business  it’s  an  idea.   We  invest   in  business.   We  think  the  practical   realities are there. We are busy enough looking after the farms and challenges  we   have   now   offshore.     The   issue   isn’t   are we investing in IMTA. What we are interested in is business that honors the environment that they operate. IMTA isn’t  a  bad  idea,  just  needs  to  be  proven  in  an  environmentally  and  economically  sustainable  model. Adel from EWOS: What is the criteria we should we use when selecting species for marine aquaculture? Alf: is there a market? Is it willing to pay the price for this new species? Several new species to consider (like tuna), but  let’s  start  with  making  sure there is a market. Francisco: Consumer Confidence, Alf does Marine Harvest have any success stories about consumer confidence? Alf: Three weeks ago we had a problem with Crystal violet in the product; because we have good records, traceability we identified the problem quickly and determined that it was a label and we fixed the problem. Robert (in reference to diversification of marine species): People only spend 11% of disposable income on food. We need consumers to value the food we sell them; no one valued an IPhone or smart phone 15 years ago. We need understand   what  they  value,  when  we  understand  that,   we  can  sell  them  anything.     We  also  need  to  know  that  it’s  not   one product for all people. Alf: In terms of cod, it costs 7 to 8 dollars to farm a kilo of cod, but we can catch one for 1 dollar a pound. That is how people value cod; it is very hard to compete with that. Closing Statements: Ruth: We need regulatory reform and business certainty to grow the industry. With that the industry will secure investment and grow. Max: Cohesion as an industry in messaging, getting the facts out on what our industry is and what it is not. Tiago: Policy makers need to understand the challenge that they have. They need to understand that this is important as energy; it needs to be increased up on the political agenda. Special thanks to Peter Sykes, PhD, Atlantic Veterinary College - University of Prince Edward Island for his help in the note-taking. 93
  • SESSION 4A: MARINE NATURAL PRODUCTS & NUTRACEUTICALS Sponsored by: Steve Dillingham General Manager GC Rieber Oils Inc., USA Erwann Fraboulet R&D Director Ocean Nutrasciences, Canada Jaroslav Kralovec Senior Director of Chemistry DSM Nutritional Products, Canada Marc St-Onge Chief Executive Officer Ascenta Health, Canada Declan Troy Assistant Director of Research at Teagasc, Director of NutraMara, Ireland Key Take Away Message: What can be done to help grow this industry? We need better different delivery forms and mechanisms. We have a wide source of nutraceuticals from the sea but there is a lack of innovation. There is a need to educate the consumer and to emphasize the positive. It would be helpful if different marine-derived product and ingredient trade groups representing oil, seaweed, proteins, enzymes, microbes, etc., worked together more closely. They all have a common denominator – common issues and challenges, and they should explore these issues as a team to solve bottlenecks to growth. 94
  • Steve began by introducing the topic saying we will discuss current and future applications. There is more scrutiny on nutraceuticals - products and ingredients from the sea. What can be done to help grow this industry? Marine oil is a success story. How can we increase the momentum? Declan is the Assistant Director of Research at Teagasc, Ireland. He is in the agri-food industry (90% of the food produced in Ireland is exported to international markets). He said innovation and science are critical. Up until now, the livestock (milk and beef) industry is technologically more advanced. In the last 3 to 4 years, there has been some progress. He said that the Irish government funds the majority of agri-food research. The NutraMara research initiative has 5.2 million Euros for 5 years funded by the Irish Marine Institute and the Department of Agriculture, Food and the Marine. They have 12 key PIs, 12 Post Docs and 15 Post grads working within this initiative. When you compare marine research and research in food, some key technologies are similar. Dairy-based technologies have applications in marine research. The technology transfer is where the bottleneck occurs. A stronger effort is needed to get research results translated into marketable products. Marc represents a consumer brand company – Ascenta Health. They have 70 employees in Nova Scotia. Their main product is omega-3. They are focused on research by employing 4 chemists and a clinical research director. To apply research – you need to translate IP into marketable products. Their stock omega-3 comes from South America (not Nova Scotia). Jaroslav is an organic chemist and The Head of Innovation Research Centre at DSM Nutritional Products in Canada. He first worked in cancer research at Dalhousie University. He then worked for MDS, then IMB/National Research Council of Canada. He said Halifax has a critical mass for science. Presently at DSM, his focus is in preventing disease, not in curing or treating it. He stressed the importance of collaboration between scientists. He has worked in all fields: academic, government and private. At DSM, they strongly believe in research and development as well as innovation regarding nutritional products. Erwann is from Ocean Nutrasciences in Québec, Canada. Their work involves shrimp and by-products. They are a small biotech company who develop nutraceuticals for animal food. This area is a very new concept in Québec – an immerging one. They believe in innovation, research and development but it is hard for them to find a niche compared to international companies. Steve: What are the highlights, the bright spots and innovation areas in your companies? Declan: The markets within which NutraMara is focused are broader than we envisaged at the beginning of the programme. The next phase of research will be targeted at a broader scope than just functional ingredients. It will also include animal feed, cosmeceuticals and possibly pharma. Chitosan extract have been isolated with antimicrobial activity and their use in animal feed is being investigated. They also have a brown seaweed extract with potential anti-diabetic effects. We need to look at the expanding elder population and their needs. Marc: There is a lack of innovation right now. The quality of science is getting better though. How do you connect with the average consumer? Consumers are confused. It is a challenge – is the bigger market in the drug stream or in nutraceuticals? Omega-3 applies to both. It is an essential nutrient. We need to educate the consumer – but how much is the right amount? They believe omega-3 can help gut health, brain health and eye health. Jaroslav: ONC was a major player in the omega-3 field. There is a current lack of innovation in R&D of novel marinebased nutraceuticals but at the same time, we can see an immergence of novel trends. “Beware”  however  that  many   marine natural products are extremely toxic and therefore usually promising as anticancer drugs. In the anti-cancer field, 1% of marine natural products are effective compared to 0.1% of terrestrial that are effective. DSM covers a wide base and offers a large variety of fish oil concentrates and is #1 in the world for development of omega-3 oils using fermentation. Regarding omega-3, the molecular forms are the bright spots. There has now been new progress looking at the different forms and they are improving the stability of the product. 95
  • Erwann: How do different molecules affect human health? Scientists need to explore the synergy between molecules. There is not much of a marine natural product culture in Québec and the people out there (consumers) need to be educated. Audience - Bob Chapman (National Research Council of Canada): With bioactives, can the delivery technology (such as encapsulation) be used in a better way? Jaroslav: The use of liposomes is one way. He mentioned using monoclonal antibodies for target delivery. Chitosan has good potential. Declan: Technologies already exist in the dairy companies and we can learn from these. Jaroslav: Just study  “milk”  if  you  want  to  succeed in nutrition delivery. Audience: Is anyone screening for proteins and lipids? Jaroslav: Protein and peptide delivery are important. For proteins, there is potential to hydrolyze first. Then, you perform high-throughput screening. Combinatorial chemistry can result in 10,000 compounds per week but they might have no activity because the effort is unidirectional. Bioactives from the sea might be a better source because of huge structural diversity. Audience: Regarding nutritional supplements, how do you know which algae is a better source? Jaroslav: You need to perform bioassay guided fractionation and screen for the bioactive product. Then you proceed with isolation and all this has a high cost/price. Marc: We already have a huge library of what contains omega-3. The future challenges are to produce the oils via fermentation. There might be single cell organisms sitting in another library somewhere but for the present time, we do not need alternative sources for omega-3. Erwann: We need to consider the availability of resources. Audience – Bryce from Toronto: How do we make our products cleaner? Clean from harmful things such as dioxins, furans, lead and other heavy metals? Jaroslav: We try to produce products of the best quality. We are constantly improving our purification methods. The “key”  is  to  work  at  low  temperatures  during  the  fractionation  (ie  during  chromatographic  steps  for   purification).  Now we have sophisticated instruments such as nuclear magnetic resonance (NMR) and mass spectrometry (MS) but you need to know what you are looking for. Steve wanted to raise the topic of potential for marine natural products in cosmetics. How do we make products from  the  sea  sound  “sexy”  to  the  consumer?    In  the  nutraceutical  area  we  have  seafood  by-products as a source but  there  is  nothing  “sexy”  in  that.    Is  it  important? Declan: The meat industry is more highly sensitive to adverse consumer issues. In my opinion, a marine source is seen well by consumers. There are marine based ingredients in food products such as bread and it is seen as a positive thing. If the products are coming from waste, consumer attitudes will need to be closely evaluated. In the end, most consumers want safe, high quality and nutritious food sustainably produced. We need more information for consumers and industry. It took the dairy industry 30 to 40 years to get where it is in terms of functional foods. Cheese although high in fat is seen as a more nutritious food because of its calcium content. The marine development of functional foods is a long way behind. Research, education and business – all three need to work together. 96
  • Marc: We need a convergence between food and nutraceuticals. Fish and fish oils are very well received in skin products. Here is the challenge: We have   misled   consumers   for   so   long…we   need   the   science   to   back   us   up.   Some   marine natural products - based on our human history- are probably safe and good but science needs to prove it. Steve brought up sustainability: Where do we stand? Marc: Fermentation can help us regarding environmental contamination. Declan to Marc: You said we misled consumers? Can you explain? Marc: The largest market is in the USA. Take this example: Based on science, krill is not at all a better source of omega-3 but yet, the cost  of  getting  krill  oil  is  huge…    The USA needs to change and regulate more (like Canada). Jaroslav: That it is not about products being sexy but about how effective is the research in discovering and developing novel ones. We have huge room for improvement. Do people understand what they are doing? Erwann: they   work  with  fish  sperms  (not  “sexy”).    China  might  be  more   interested  in  such  things  – one  man’s  trash  is   another  man’s  treasure. Audience - Susan from National Research Council of Canada IRAP asked  about   the   palatability  of  “blockbuster”   research. Marc: Either you go after established needs of the consumer or you try and predict needs (that involves high risk). If industry works with academia or government, then you get real innovation. Most companies are small to medium size – how much risk can you take? Jaroslav: Any company needs to support creative research. For instance 3M allows their researchers to spend 15% of their time on what they want to do – what interests them. Compared to pharmaceuticals, nobody wants to support expensive research in nutraceuticals. Current model of clinical trials is modeled to study fast acting drugs that treat disease but is not suitable for nutraceuticals that work long term to prevent disease. Audience – Junzeng Zhang from National Research Council of Canada asked the panel to comment about consumer confusion – personal nutrition (groceries) versus nutritional supplements. Marc brought up naturopathic medicine employing techniques (diagnostics). What does the consumer need? Do supplements work? In the future, personalized diets might exist. What is the optimal amount? The amount of EPA and DHA  required  might  vary  from  one  person  to  another.  All  we  know  is  that  most  people  don’t  take  enough. Steve wrapped up the session by saying we need better different delivery forms and mechanisms. We have a wide source of nutraceuticals from the sea but there is a lack of innovation. There is a need to educate the consumer and to emphasize the positive. It would be helpful if different marine-derived trade groups representing (oil, seaweed, proteins, enzymes, microbes) worked together. They all have a common denominator – common issues and challenges, and they should explore these issues as a team. Special thanks to Patricia LeBlanc,  Natural  Products  Chemist  with  Canada’s  National  Research  Council for the note taking . 97
  • SESSION 4C: SEAWEED BIOREFINERY Sponsored by: Pia Winberg Director Shoalhaven Marine & Freshwater Centre, Australia Pal Bakken Chief Executive Officer Seaweed Energy Solutions, Norway Thierry Chopin Scientific Director Canadian Integrated MultiTrophic Aquaculture Network, Canada Peter Countway Senior Research Scientist, Bigelow Molecular Microbial Ecology Laboratory, USA Franck Hennequart Technical Director Oilean Glas Teo, Ireland Key points from Session: 1) There is a discrepancy in what producers of algal biomass see as a value for effort in production and what the current biofuel and hydrocolloid markets are willing to pay, so higher value molecules are a priority. 2) Production and volume are the current gap that needs to be addressed, and this can only be justified by addressing the high market value opportunities. 3) Realizing high value opportunities requires evidence of efficacy of product which requires further time for evidence based R&D and addressing complexities of different markets. 4) Processing technologies of seaweed biomass are still in need of improvement and are diverse. The application of skills in chemical engineering with those of biologists understanding species and fermentation processes can be anticipated to overcome these hurdles once biomass is available. 5) Biorefinery concepts offer the opportunity to build value to the species that already have a demonstrated production or wildharvest capacity, such as Laminaria, Saccharina, Undaria, Ascophyllum, Kappaphycus, Eucheuma, Gracilaria, Porphyra and some green seaweeds like Ulva 98
  • Introduction Seaweeds have long been a source of human and animal nutrition. Modern macroalgal biorefineries use cultivated seaweed biomass as well as wild harvested material to produce food and feed products as well as gelling agents, texturizers, fine chemicals, cosmetic ingredients, agricultural inputs and many other products. This session will explore the diversity of feedstocks and processing strategies that support a viable seaweed biorefinery and the range of outputs that reach a variety of markets. Pia Winberg: Today we will be talking about seaweed biomass. The amount of seaweed that is harvested annually is massive and exceeds all other aquaculture combined in terms of biomass. China is one of the biggest seaweed biomass producers in  the  world  and  they  already  refine  thousands  of  tons  of  seaweed  for  China’s  domestic  needs.   When we say that we are biorefining seaweed we mean that we are breaking the seaweeds into various chemical components; in crude or purified forms. Today we have much greater technology for biorefining seaweed and we are able to very effectively isolate hydrocolloids such as alginates, agars and carrageenans. These refined products are used to help paint and ink flow, or create creamy or smooth texture in our food products. Hydrocolloid seaweed biomass is becoming a large resource in developing nations. The West still has a primarily wild-harvest but there is increasing demand for more high-tech biorefining of seaweeds to the individual sugars, lipids and pigments. Hydrocolloid production produces a lot of wastes that contain these other components and now we are asking: what products can we make or isolate from these wastes? We have a very interesting panel of experts with us today. No one on the panel is a chemist. They are interest in seaweed biomass and what they can do with seaweed biomass. They all have an interest in seaweed biomass refinery capabilities and possibilities. Paal Bakken- CEO, Seaweed Energy Solutions AS, Norway: My background is from business and aquaculture, where I started with a seafood company in Japan in 1989 and ran that business in Asia for 12 years. I was born 50m from seaweed and harvested seaweed as a child. In 2000 we began basic research and patenting within the seaweed sector, and eventually established a company in 2009. It is a Norwegian company with operations in Norway, Portugal and Denmark. We cover the Northern and Southern extremes for brown algae, and we are developing more efficient production processes. We have a Norwegian breeding centre and test site. We have offshore testing in Portugal and this is important because Portugal is also a very important market for us. Portugal has the biggest ocean areas in the market. We purchased a Danish seaweed farmer and are now scaling up production there. Our interests are not only in energy but also in biorefined products such as fish feed, animal feed and chemicals. We are not focused on the high value molecule market and we are content to leave that to others. Our long term goal is for seaweed to be competitive with land based energy crops. We are currently scaling up our production to be competitive. The next step for our company is to get to 100,000 tons of wet weight and trying to realize capital to reach this goal. Thierry Chopin- Professor of Marine Biology, University of New Brunswick, Canada: I have been at the University of New Brunswick for 24 years. I am originally a trained ecophysiologist and biochemist working on seaweeds of commercial value. I moved from France to Canada in 1989. My current work concentrates on integrated multi-trophic aquaculture (IMTA) which I started to work on in 2000, although we created the term in 2004. I want to talk about biorefinery in a larger scope than just seaweed biorefinery because IMTA produces fish, invertebrates and seaweeds. Biorefinery terminology   has   an   “oily”   connotation   but   what   we   really   want   to   do   is   generate several products from the same biomass through a series of processes to obtain either high-value compounds or low-value commodity compounds.-. We have to be very clear on what we want to do with the biomass. 99
  • A few years ago, the fashion was on producing biofuels, then we heard about biofuels and the co-products could be interesting; now, we hear the co-products are interesting and we will, hopefully, produce biofuels in 15-20 years. So, which are the co-products of which?! Seaweed biorefinery companies will have to generate several products and develop uses and markets for each of them. After you have isolated a desired fraction, it is important not to just discard the rest: there is no more waste; everything has to be re-used/find an application. In the Western World, we have to admit that we have a handicap as there is not a lot of awareness about what can be done with seaweeds. Peter Countway- Senior Research Scientist, Bigelow Molecular Microbial Ecology Laboratory, USA: Bigelow is well known for its 3000 strains of microalgae, but fewer people know that we also house 90 strains of macroalgae. My interests are in the genetic diversity of algae and how bacteria interact with algae. From 2008-2010 I worked with a California company on the process of micro-algal biomass production for use in biofuels and as source of feed for aquaculture. Eight months ago I worked on developing a US Department of Energy (DOE) research proposal with a Bigelow Laboratory collaborator, a seaweed farming company in Maine, and a seaweed biorefinery company in California. The proposed work would have explored the use of kelp and other macroalgal sugars for bioethanol production. Unfortunately, our industrial collaborator in California ceased operations over the summer and the research project was not funded. At Bigelow I currently work on cultivar production of microalgae. But we are also very interested in looking for new enzymes and microorganisms associated with seaweed and how they can convert seaweed sugars through fermentation. These projects have direct application for biofuels etc. Franck Hennequart- Technical Director, Oilean Glas Teo, Ireland: I work for an Irish company called Oilean Glas Teo (OGT) which is a processor of whole seaweed. I have a background as a marine resource process engineer. I have previously worked on oysters and moved to Vancouver, Canada, to act as a consultant for a for provincial agency. My role was to match researchers with industry to comericialize marine products. I also worked on sablefish and seaweeds. The idea was to make high value applications for first nations because they faced high unemployment and they wanted to get high value out of their seaweed products. I then moved to Ireland and started working for OGT. My current research project involves working with a biochemist at a University and working on extractions and characterizations of key polysaccharides from seaweed fractions. I work on specific extraction processes and try to avoid heat as much as possible. This ensures that I get all of the active moleucles in their active form from seaweed. We have 24 employees and sell our extracts into niche markes. Two years ago we began selling into the animal health market and we are currently on the road to making human health ingredients. Biorefineing is what we are triing to do. Making biofuel from seaweed make no sense to our company. We want to ensure that our company is sustainable and our goal is to make as much value as possible from one kilo of fresh seaweed. Pia Winberg: Although the biorefinery application of seaweed has existed for a long time, such as historically in the European burning of biomass for potash, it is not very sophisticated and has primarily expanded to the production of iodine, sodium alginate and low value industrial hydrocolloids of agar and carrageenan. However, biorefinery concepts from other biomass for high value and value-adding are well established, for example wheat. Also the eidence of efficacy of extracts in applications is growing. Here we will explore the key concepts of: The current status of existing biorefinery products from seaweeds and their markets- gaps or saturated markets? How do we increase the value of the biomass? Pia Winberg: Franck, do you look at hydrocolloid markets? 100
  • Franck Hennequart: Hydrocolloid production used to be big in Ireland and at that time, the irish industry was selling huge amounts to the UK and Scotland for alginate extractions. International companies from South American and Asia began competing with Irish firms and this decreased the ability of Irish companies to compete in the hydrocolloid market. My company has no interest as hydrocolloid is seen by us as a commodity market. We are only interested in high value molecules and getting the most from 1kg of fresh seaweed. Pia   Winberg:   Peter,   you   have   an   interest  in   biofuel   production   but  wouldn’t   hydrocolloid   production   make   more   economic sense? Peter Countway: I agree that hydrocolloid production would probably make more economic sense. However, we have been advocating for production of biofuel and also isolating protein from macroalgae because this was the focus of our recent proposal to the US DOE. In microaglage, biofuels could work economically but this source of biomass would have to tie it in with producing compounds for the fish farming sector or some other high-value market. Pia Winberg: What about you Thierry, what do you see as the markets and opportunities with hydrocolloid market? Thierry Chopin: Alginates are a very well established market, with a few companies controlling the whole market. The alginate driven price per ton for kelps is not interesting to me. The market looks better for high-value molecules for food products, cosmetics etc. We already apply a biorefinery approach to our IMTA seaweeds. For example, we have seaweeds for human consumption in local restaurants and food markets; the volume is not large, but this is important to put seaweeds on the radar of consumers and culinary magazines. We also have IMTA seaweeds for cosmetics, partial fishmeal substitution for fish diets, and possibly biochar. What we have seen so far are different companies  specialized  inproducing  different  compounds.    The  term  “biorefinery”  implies,  to  again  take  the  image  of   the oil industry producing a multitude of products from the original crude oil, that, adapted to the seaweed industry, a seaweed company should produce several compounds through a series of processes. For example, if I isolate a fraction of interest for cosmetics, I am still left with a considerable amount of biomass; I need to think about the next steps to re-use this available biomass. Companies need to think about the sequence of the fractionation process so that they have access to different molecules in different fractions and they do their fractionation in the proper order. If the first process is too harsh, you can lose the properties of interest for another application. Pia Winberg: Hydrocolloid production requires   high   volumes.     In   the   West,   companies   don’t   have   access   to   large   volumes unless they use waste stream. Paal Bakken: The biorefinery industry that specializes in fish meals or animal feed needs to see that the biomass can be supplied in large quantity at low cost. The biorefinery term comes from the oil industry. For seaweed it is very simple, use seaweed and refine it into what the market wants. This is very different than production for the local market. Norway needs seaweed to be refined for feed. Other countries may need it to help them meet their energy targets. Those countries must subsidize seaweed-based biofuel production to make it economically feasible. Scotland subsidized renewable energy to get it up and going (tidal and wind). If we do this for seaweed, there will be a market for biofuel. Pia Winberg: I would now like to ask the audience: Is anyone here a buyer of hydrocolloids and is there a market? Markus Klinger from DuPont Nutrition & Health Denmark: We process alginate and don’t   consider   it   a   commodity market. Prices in Chile are $(USD)1-1.5 / kg. This is a good price for the biomass. Some other users use it as feed without refining it for 10 times less. Alginate is not a commodity market and insists on customers willing to pay good prices. Alginate has a need for more biomass. Norway has reached its limit for a sustainable wild-harvest for brown algae. Climate change is definitely having an effect. In France and Chile there is a significant harvest of seaweed but it is reaching the end of a sustainable volume. 101
  • I have a question for the panel: the salmon aquaculture industry is more advanced and there is a discussion about diversification for fish. There are brown, green and red seaweeds. Is there a niche for different species rather than scaling up volume? Or, should you focus on one of the three groups? Pia Winberg: Is there value in high value molecules from seaweeds? We are just now getting the proper molecular tools and they are helping us redefine species and genera  and  clearing  up  the  nomenclature.    Let’s  get   into  that  question.    If  we  don’t  know  our  species,  how  can  we  supply  high  value  molecules  dependably  from  our   species? Franck Hennequart: We focus on one seaweed and working through a wild harvest. We are officially not allowed to harvest kelp (Laminaria sp.) but only one species, which is Ascophyllum nodosum. Alginate is a commodity to our eyesas  it  was  harvested  in  Ireland  but  didn’t  bring  high  value  to  economy.    Bring  back  value  and  go  as  far  as  you  c an to get that high value. Alginate price are still interesting but what do you do with the byproduct? In Ireland, the process to generate alginate is probably going to get you more money from the left over fractions. Even before trying to grow seaweed, there is a lot of resource biomass left over from hydrocolloid process waste. We need to use more of the biomass for polysaccharide fractions or other natural chemical production. Using alginate waste could be very valuable. It could go further into the biorefinery process. Pia Winberg: The rest of the panelists are cultivators. They can choose high-value species and they know molecular composition and target species. What about species selection for you Thierry? Thierry Chopin: There is a lot to IMTA, including nutrient bioremediation, but also the interactions between species, environmental sustainability, economic stability and societal acceptance. We should focus on high-value applications because cultivating seaweeds is not cheap, especially in the Western World. Biofuel production requires a high volume and low price. Hydrocolloid production is in between and not a commodity yet. How do we go about species selection? There are around 10,500 species of seaweeds or so. Only 220 have been cultivated, and only 6 genera represent 95% of global seaweed aquaculture. The same is true in agriculture. Over the centuries, we have selected pretty much four mammals (beef, pig, sheep and goat) and four birds (chicken, turkey, duck and geese) as our main meats. Fish species selection in capture fisheries and in aquaculture is also on going. To be a good agricultural or aquacultural species there are certain required characteristics which reduce the number of acceptable species to very few. Only a limited number of species are environmentally, economically and societally acceptable and amenable to cultivation. However, if there are not many species available, it is then very important to generate more than one product from one species through more than one process. That is where the biorefinery concept becomes so important. Pia Winberg: We are limited to species that have been close to shore and easily accessible. Perhaps there are other species that are better? Paal, you choose to work with Saccharina, why? Paal Bakken: We can do smaller scale cultivation for other species. From a company perspective it is more costly to cultivate many species. There are different growth profiles for different countries. With seaweed, you are not only choosing a seaweed species but you have to improve that seaweed. You can breed the seaweed for protein isolation or another product. You are not only choosing species. Peter Countway: There is an opportunity for multiple or diverse species. We are limited to what our local farmer could provide. We have to use local products. Our producer is the largest producer in the US and he is growing about 1 acre. We are currently studying 90 species in our algal culture collection and looking for other species to use. Unfortunately we are currently limited to working with a small number established growers and their cultivated species. 102
  • Pia Winberg:There is an estimated 150,000 tons of waste globally from hydrocolloid production. What is a high value product that can be generated from that waste? Pigments lipids etc.? Franck Hennequart: It depends on species that is being used. From brown seaweeds alginate is the main product, there are also other high value polysaccharides, but some are destroyed in the refining process. There are some prebiotics and phycocolloid polymers of branched saccharides with potential applications. There are ~ 400 papers and several patents for anticancers, anti-inflammatorys, or antibiotics for the fucoidans only. Fucoidans are unique fucose polymers from brown seaweeds. The difficulty is to get the right fractions. There are complexities in getting new products to market, and there are many emerging markets. We see for example Fucoidans as being the next omega 3, but the problem is to extract and maintain activity with low production costs and to bring it to market. Stability and heterogeneity of extracts is an issue to be overcome and needs to be made before a product can be brought to market. There are high levels of phlorotannins and antioxidants present in seaweed that are similar to tannins in grapes. Antioxidants are very interesting and can currently be extracted from seaweed and used in specific applications now. Minerals can be extracted and used for the animal feed market. Seaweeds are mainly sold for mineral component for animal feed. This is their main use despite the colloid industry. Pia Winberg: Sulfated polysaccharide technology is very interesting. The problem is the consistent and reliable source of molecules. We can currently print in 3D with special polymers and seaweeds can work to provide the polymers for this application. This is very high value molecule in a very small market. I have a question for Thierry: Within your IMTA concept, what is your target molecule? Is it in the biorefinery market or is it nothing in particular and you focus on many small value molecules? Thierry Chopin: I  will  go   back  to  the  biorefinery  analogy  of  an   oil  refinery’s  ability  to  make   many  things  from  one   original compound. You have to reuse what you call residue. For example, you can get small fractions of interest for cosmetics with lots of residues. What can I do with these residues? Integrated Sequential BioRefinery (ISBR) processing is good because the residues from one step have to become valuable fractions for the next ones. There are different prices for different fractions. Biorefinery is presently happening but rarely at the same place or in the same company. We need to adopt the biorefinery concept within production units. Another value of the seaweed biomass we have not discussed so far is the ecosystem services they provide. This is not surprising as the marine world is animal-biased.   We  don’t   talk   much  about   seaweeds  in   elementary  schools,   high   schools and universities. We end up with scientists and regulators who then do not know much about seaweeds and even less about their roles in the ecosystems. We should look at seaweeds for their roles at recapturing nutrients, sequestering carbon and combating ocean acidification. Companies and regulators need to look at the ecosystem services provided by seaweeds. I have calculated that the value of the ecosystem services they render is approximately 36% of their present commercial value (estimated at US$5.7 billion). We should talk about it. IMTA is also important in this context if we want a more even distribution of fed and extractive aquaculture throughout the world. The value of the ecosystem services provided by the extractive components of IMTA system will have to be recognized   and   accounted   for.  We  will   have  to  put  in   place   a   system   of   “nutrient  trading   credits”   (instead   of   focusing   only  on  “carbon  trading  credits”). Pia Winberg: Perhaps it is just about marketing. We have been only discussing biorefinery questions today because that is what the focus is today. Franck, what is your primary goal? Audience: You can get paid for ecosystem service and that is why we moved to Denmark. We can remove nitrates and phosphates and clean up waterways. The government of Denmark sees value in cleaning up ecosystems but how do we get paid to remediate. We have talked to farmers and by farming, they have to prove that they can clean up 103
  • sites and prove they are removing nitrogen. Another way is similar to what Norway does in paying Brazil to make sure there is less deforestation. We should be focusing on forests in the sea to store carbon. There are income opportunities there. Not only do ocean forests store carbon but they provide ecosystems for fish and other species. There are many income streams there. Pia Winberg: Governments need to put a value on clean ecosystems and the challenge is that no value has been applied. In addition to CO2 and nutrient waste, China has shown that ocean acidification can be overcome with seaweed farming. Seaweed can also push pH back up in enclosed bays and it helps calcification of aquaculture organisms. Let go back to biorefineries. Franck, replacing inulin and gut health opportunities for seaweeds, what are the legislative challenges to that? There have been no human trials for many seaweeds. What are the regulatory hurdles? Do you have experience in this? Franck Hennequart: The difficulty I see is the lack of knowledge. There is not much information on extracts and components in extracts. We need to know what seasonal and species variation occurs. What is the effect of processing on extractions and activity of compounds in extracts? It is expensive to do these trials and hard to get funding to start. You have to understand the processes and the variation at every stage of production. We need more science and research to determine this variation. We are a seaweed processor and we are doing extractions, understanding the extracts and then communicating this to the market. We need to collaborate with companies that are well established in the food ingredient sector and this is hard based on our small size. Pia Winberg: Is it the role of academics to do the research into extract activity and process variations? It is hard to get industry support for investigations into poorly established molecules. They need to see evidence of use. Thierry Chopin: We need industry and academic collaborations because industry reminds you that it is about making money at the end of the day. We need the right species making the right molecules, but it has also to be within a system that is economically and societally acceptable. You need to think about scale as well because you need a significant scale to reach certain markets. Are we ready in the Western World for significant seaweed cultivation? There is a lot of talk about food security and self-sufficiency   these   days,   but   also   a   lot   of   “not   in   my   back   yard”   syndrome. It is time to walk the talk and recognize the implications, notably regarding marine spatial planning. Pia Winberg: There is a need to get to a certain scale for reaching markets today. It is hard to get investment without proof of knowledge about what you have? Is biofuel really an accessible and a viable industry? What is the scale and market to start the investment in the west for biofuels? Paal Bakken: Seaweed will be competitive for energy as part of a biorefinery. You need biomass to make fuel and the world lacks biomass. Fertilizer is a big issue with land based crops which is not a problem with seaweeed. We have a plant that grows faster than sugar cane. The goal will be to get the technology right and we will be competitive eventually. Franck Hennequart: Harvesting wild stock for biofuel makes no sense from its environmental impact and value. To do that you would bring down the price of fresh seaweed. There is no point in doing that at all for us and the whole seaweed industry. The only way would be cultivation. IMTA is probably one of the answers. Passing the regulations to put farms on coastline is hard to establish. The coastline is hard to get access to due to competing activitie; Maybe the   open   sea   may   is   the   answer.     The   problem   with   the   open   sea   will   be   the   many   technical   challenges.     We   can’t   104
  • address the fossil fuel energy issues with one element, we need multiple sources like seaweed, wind, solar etc. Space is an issue. Peter Countway: There is an opportunity to find marine microbes and fungi with fermentative capabilities. This is really understudied. We need to find novel microbes and generate and growing interest of this fermenting technology. Pia Winberg: In summary, seaweed products are diverse including their service to environment. I would like to open the floor for comments. Audience - Biorefinery scale up center in NB: I would like to comment and defend biofuel. Modelling in the US shows that the lobby for the biofuel industry and R&D for biofuel has been a benefit. That allowed funding for biofuels. Policy makers and the public understand biofuel   but   they   don’t   understand   high   value   products   and   protein   sources that you can also get from seaweeds. The fallout from biofuels is money for cool products. We should lobby for biofuel money because it worked for microalgae. Macroalgae has good biomass  but  micro  doesn’t.   Pia Winberg: Globally it is estimated that $US10B is invested in microalgae for biofuels research, with little biomass produced, while seaweed is an existing producer of $6B of biomass annually with relatively little investment. This is an illogical scenario. Audience member: Petrochemistry is part of the issue. Seaweed production produced valuable chemicals in 1940 during war and proved that it is efficient. This was even before any oil biorefinery. Seaweed chemical production is an important issue. There has been a lot of effort to find microbes for fermentation and generate products. Biofuels are not the only important product in this, biochemicals are also very important. Presently chemical companies are not very interested but we need to convince them and demonstrate an ability to produce. Producing biomass by mariculture is successful in Asia because it is food for humans. The value of seaweeds is based on food from seaweed but we need to think about other uses for the biomass to raise the price. Pia Winberg: The old way that worked is asking for fuel because that is what is understood. Perhaps we need to tell the chemists who are looking for new chemicals? Perhaps we need to engage chemical companies to demonstrate value with us? Franck Hennequart: We are not doing that now at all. Companies need to absorb the cost of research but that avenue is interesting. We have a good understanding of our compounds that we are isolating. Perhaps there are interesting compounds that can be commercialized to the right companies. We need to work in agreement with them. Paal Bakken: I am still a believer in seaweed biomass and the fact that we need more biomass. 50% of all growth happens in ocean but 99.9% of the focus today is on land  plants.    We  have  resources  in  the  oceans  and  people  don’t   know what seaweed is. There has been more awareness and interest recently but we have to get more awareness. Thierry Chopin: 98.9 % of seaweed aquaculture is concentrated in 7 Asian countries. How do we change awareness in the Western World? We need to convince Westerners that aquaculture is not just fish; it is also seaweeds and invertebrates. Start with nutrient recovery, nutrient trading credits and carbon sequestration. The public needs to understand the roles of seaweeds in the ecosystem. There are many applications of seaweeds that are used every day, but  the  public  doesn’t  know  it.    For  this  we  need  to  secure  the  biomass  through  aquaculture,  and,  hopefully,  IMTA.  It  is   the only way. Peter Countway: The macroalgae potential is huge. $16/lb for a minimally-processed product locally in Portland with no biorefinery. 105
  • Franck Hennequart: I am skeptical for biofuels potentials from seaweeds. I know that there is need for science and R&D in general, and if all this can beeasily funded though biofuel projects, it will benefit the rest of the industry in any case. If there is a hope, it might be through aquaculture but with the environmental and socio-economical constraints that we have already mentioned. We see, in OGT, a need for growing Laminaria in the coming future and we might go this direction but not for biofuels. Special thanks to Fraser Clark, Postdoctoral Fellow in the Department of Biomedical Sciences and a Research Scientist at the AVC Lobster Science Centre at the University of Prince Edward Island for the note taking. 106
  • Special Session: EUREKA and Canada International Industrial Technology Projects This session illustrated how EUREKA can benefit companies by providing access to a unique network fostering international industrial R&D collaboration. In 2012, Canada became an associate member of the vibrant EUREKA network of over 40 economies in Europe, Israel and South Korea. EUREKA membership provides a unique opportunity for companies and innovation-focused organizations to jointly develop and deploy technologies with partners in other EUREKA member countries. Discussion Questions 1. What are the challenges & opportunities for firms engaging in international industrial technology partnering? 2. What does your organization bring to the table? Moderator: John R. McDougall Speakers: 1. Pedro de Sampaio Nunes, Head, EUREKA Secretariat 2. Jayson Myers, President & CEO, CME 3. Robert Orr, CEO and Managing Director, Cuna del Mar Fund and co-founder, former CEO and Chairman of Ocean Nutrition Canada Ltd. 4. Gordon Deveau, Senior Innovation Development Officer, ACOA Enterprise Development 5. Bogdan Ciobanu, VP, IRAP, NRC INTRODUCTORY REMARKS / J. McDougall Good  morning.  Before  we  begin,  I’d  like  to  extend  my  appreciation  to  our  panelists  for  their  participation  and  thank   the audience for joining us this morning. This is the first time that BioMarine, traditionally held in Europe, is hosted in Canada. Another first is that Canada, through the National Research Council, recently joined a European industrial R&D network – EUREKA. EUREKA is the largest industrial R&D facilitation network of its kind, enabling access to important markets in over 40 economies, substantial R&D resources, technology innovators and global value chains. Over the past 27 years, EUREKA has demonstrated its value through some 4,000 projects. Including a EUREKA focus, with industry-driven research technology partnering as part of the overall BioMarine Conference, is a chance to further both the BioMarine and EUREKA agendas. This new approach provides BioMarine participant firms from both Canada and Europe with a very practical opportunity to mutually extend their reach to new technology, resources and markets. BioMarine brings innovators together to explore synergies for industrial R&D cooperation. EUREKA helps eligible BioMarine firms and innovation partners to move from exploratory discussions through to concrete international projects. This  morning’s  session  will  focus  on  the  challenges,  opportunities  and  services  available  to  firms   wishing  to  engage  in   international industrial technology partnering. Industrial technology collaboration comes with challenges– challenges which increase in complexity with foreign partners, as we will no doubt hear from our panelists this morning. On the other hand, it promises significant rewards. Collaboration helps address firm needs: access to technology and R&D; access to knowledge, skills and expertise; access to market and technical intelligence; and access to funds for leveraged investment. 107
  • Addressing these needs can enable faster, less expensive development and deployment of new products, processes and services, ultimately increasing firm sales. A recent study of 1600 Norwegian firms demonstrated that adding just one   new   international   relationship   in   product   development   increased   a   firm’s   odds   of   successful   new   idea   introduction by 26%. Further, firms with a greater diversity of international partners tend to innovate more and introduce more radical innovations. 5 Further analyses clearly demonstrate that international engagement magnifies industrial R&D results above those of domestic collaboration alone, with significant gains in labour productivity, jobs, exports and sales.6 While essential to securing economic competitiveness, identifying, developing and realizing these international technology partnering opportunities can present a challenge for resource-constrained firms. Eureka provides a framework for all this to happen. Our panelists this morning will address not only the opportunities and challenges but also the essential services which enable the EUREKA framework to deliver upon its promise. I am very happy with array   of  perspectives   we   have   assembled   on   today’s   panel   and   it  is now my pleasure to provide a brief introduction to our panelists. First, allow me to extend a warm welcome to our first speaker this morning who has traveled here from Europe to provide us with a EUREKA perspective. Pedro de Sampaio Nunes is Head of the EUREKA Secretariat since February of this year. Dr. Nunes was previously Portuguese Secretary of State for Science and Innovation, a Director at the European Commission, responsible for several R&D programmes focussed on energy and information technology and deputy Director-General for the Secretariat  for  Portugal’s  accession  to  the  EU. Jayson Myers brings an industrial association perspective. Mr. Myers is President & CEO of the Canadian Manufacturers & Exporters, Canada's largest industry and trade association and the organization behind the recently launched Canadian membership in the Enterprise Europe Network or EEN. He is a well-known economic commentator, and is widely published in the fields of Canadian and international economics, technological and industrial change. Robert Orr gives a company perspective, specifically in the field of aquaculture. As CEO and Managing Director of Cuna del Mar Fund, and co-founder and former CEO and Chairman of Ocean Nutrition Canada, Mr. Orr has a wealth of experience  to  share  regarding  the  challenges  a  firm  faces  in  today’s  marketplace.     The regional perspective is provided by Gordon Deveau, Senior Innovation Development Officer at the Atlantic Canada  Opportunities  Agency  Enterprise  Development  Division.    Representing  the  Government  of  Canada’s  regional   development agency for Atlantic Canada, Mr. Deveau brings a strong background in the aquaculture and biotech industry, including work with Fisheries and Oceans Canada. And Bogdan Ciobanu, VP of the NRC-Industrial Research Assistance Program. NRC-IRAP provides innovation and funding services customized to firm specific needs to help accelerate the growth of business through innovation and technology. Mr. Ciobanu has actively contributed to the Canadian Innovation landscape and is well-versed in the needs of firms from varied perspectives: R&D, commercialization through to sales and marketing. Key to delivery of Canada’s   EUREKA   relationship   are   the many Industrial Technology Advisors across Canada which encourage and support innovation in Canada's SMEs – including funding eligible SMEs for EUREKA projects. 5 Europe’s  Centre  for  Economic  Policy  Research  2011 6 Various studies over 25 year period- Denmark, Netherlands and combined EUREKA projects 108
  • The session will end with an Interactive Discussion Period, when you will have the chance to ask questions to our distinguished panelists. SPEAKERS Pedro De Sampaio Nunes (Head of EUREKA secretariat) The   introductory   statement   of   the   talk   emphasized   that   today’s   business   world   is   fiercely   competitive   and   unforgiving. EUREKA, started in 1985, now has 41 members worldwide including Canada, Israel and South Korea. EUREKA has organized over 30 billion euros in investment over 27 years, has over 17,000 participating organizations and over 4000 projects. Canada as a new member has already been involved in many different project types, with the most being in the ICT sector. Out of EUREKA member countries, Canada collaborates most frequently with Germany and France, and with respect to the theme of this conference, Canada is strong in fish catches but has a lot of room to grow in aquaculture. There are three types of support schemes in the EUREKA network. The first being Individual Projects which are shorter term, smaller projects involving participants from at least two EUREKA member countries. The end goal of these projects is to create a product, process or service that will significantly advance the particular sector. The second scheme is the Eurostars Programme which is specifically dedicated to research performing SMEs. The mission of Eurostars is to support R&D performing entrepreneurs by funding their research activities to allow for international competitiveness. The final scheme are EUREKA Clusters which are medium-term, strategically significant initiatives meant to develop generic technology of key importance to European competitiveness. In EUREKA Cluster projects there are a large number  of  participants,  many  from  Europe’s  major  companies.    Acqueau  is  an  example  of  a  EUREKA  Cluster  project   focusing on water technology. For more information on EUREKA and its services go to their website at Jason Myers, President and CEO (Canadian Manufacturers and Exporters) The Enterprise Europe Network (EEN) Canada helps small to midsize enterprises (SMEs) in Canada. The main question in business today is how do we conduct business in this intensely competitive and very quickly changing environment? Business as usual is no longer an option and innovation is necessary to survive in business and to keep up with regulatory changes, to remain competitive, and to bring new products and services to the market. Innovation can take many forms including: looking  for  new  markets  (don’t  put  all  your  eggs  in  one  basket) being different than your competition creating high value solutions for customers creating new technology and custom designs for solutions and with relevance to EUREKA - generating partnerships to combine strengths. Developing partnerships comes with both opportunities and challenges. First you have to define what opportunities are available, who your potential customers and suppliers are, how to focus limited resources, and where you will find support – vision without money is simply hallucination. The EEN is the cornerstone of European commissions and works to find international partners for business opportunities. There are 600 organizations in the network and they include research facilities, governments, universities and companies from 54 countries around the world. Canadian   Manufacturers   and   Exporters   (CME)   is   Canada’s   lead   company   in   the   program.     CME   aims   to   help   SMEs   identify and connect with qualified international companies looking for tech and business partnerships with Canadian firms. It does this by profiling technologies across the EEN as well as allowing members to participate in international 109
  • tech shows and matchmaking events organized within the EEN. Since 2008, there have been 66 partnerships related to marine science, aquaculture and fisheries management from EEN. For more information go to or contact Robert Orr, CEO and Managing Director, Cuna del Mar Fund and co-founder, former CEO and Chairman of Ocean Nutrition Canada Ocean Nutrition Canada (ONC) had much collaboration with the NRC that was integral to its success. As a company, ONC spent more money on R&D than the next 5 competitors combined, and spent more money on marketing and on quality than its competitors as well. International collaborations were also essential to the success of ONC. The Canadian conundrum is that there is an inability to generate commercialization of the intellectual capacity that we have in the country. ONC had many collaborations with international organizations including: the Canada-Israeli research foundation working with marine biotech companies, collaborations with China and universities there for development of technologies,  collaborations  with  a  Dutch  company  that  wasn’t  able  to  scale  up  technology  that  they  had  developed,   and a joint venture with a Peruvian food company that developed fish oil processing technologies that allowed for increased global competition. There are also many challenges when dealing with SMEs internationally, and international collaboration is often misunderstood. For example there are many different ways of doing business – the Israeli company licenced out technology platforms to ONC competitors. You also need to spend money on marketing, do your market analysis and know more about space, competitors and customer markets in each country you deal with. Take your technology and start with a costumer in mind – how do you take this new technology  and  scale  it  to  the  customer’s  specific  needs?   How do you focus on customers and the market? Also to note is that there is a large difference in the development of IT and biotech products as success in IT comes very quickly, while the biotech field takes lots of time, money and patience. People of the private equity sector are impatient and so it is important to keep that in mind when in this business. Gordon Deveau, Senior Innovation Development Officer, Atlantic Canada Opportunities Agency (ACOA) Enterprise Development The ACOA is a regional development agency (1 of 6 in Canada) that is responsible for the Atlantic region. The goal of the agency is to improve the economy of Atlantic Canada. They have two main funding opportunities. The first being the Atlantic Innovation Fund (AIF) which is an annual proposal competition designed to increase R&D and commercialize the resulting outcomes. Since 2002, AIF has committed nearly 798 million to 318 R&D projects in Atlantic Canada valued at over 1.7 billion. The second funding opportunity is the Business Development Program (BDP). This program helps companies through a suite of problems they may encounter. For example R&D contributions are available for up to 1 million dollars, and 30-35million dollars are set aside for R&D purposes each year. The BDP is a continuous intake process as opposed to AIF which is only available once a year. ACOA also has opportunities for international collaborations and also a springboard Atlantic organization which is a network of 18 universities and colleges that work throughout Atlantic Canada to accelerate academic innovation. An example of an ACOA success story is Acadian Seaplants, a company which processes seaweed. Help from the AIF program and other avenues in the ACOA have allowed this company to scale up lab technology invented in the lab and to accelerate development of their product. Also through this funding, research jobs have been created right in the Atlantic region. Other videos of testimonials from companies helped by the ACOA are available on their website. 110
  • Business is about relationships and the ACOA will continue to work collaboratively with the NRC to extend knowledge on the EUREKA initiative and how this will help Atlantic companies. Bogdan Ciobanu, Vice-President, Industrial Research Assistance Program, National Research Council of Canada (IRAP-NRC) The Industrial Research Assistance Program (IRAP) is the major funding venue for international R&D collaboration and EUREKA collaborations in Canada. IRAP was started after WWII to facilitate international technology transfers. What are the benefits of International R&D collaboration? Business collaboration Accelerated product development Cost control Access to knowledge, skills and ideas (soft skills, competitive info, understanding the market, knowledge of value chains and distribution channels), Adapt product/services to new market (good to work with someone who understands those markets and clients) Complement internal resources What are the risks of International R&D collaboration? Loss of strategic Intellectual Property (risk that IP can be shared and used without permission) Differences in national legal protection Security risk (dealing with employees of another country) Control of IT systems (danger of hackers) Corporate culture clash (dealing with people from other cultures/companies – might need to adapt management style) National culture clash Quality assurance Upkeep of your regular business (International collaboration takes a lot of time/effort to work through which might put stress on your business at home) Tax implications When planning for International R&D collaboration: Know your partner very well Assess cost and other impacts Have resources ready Seek legal advice Be aware of differences in culture and management Make sure you also define with your international partners the scope of the collaboration, the project plan, governance and control mechanisms, as well as outcomes for success and exit strategies for failure. QUESTION PERIOD There are many risks in international relationships. What would you see as the biggest risk of international projects? And any tips to get around it? 111
  • Bogdan: Focus on time to get involved in developing and maintaining relationships. Applies mainly to small businesses (large businesses have positions for people to work specifically on this) – becomes very time consuming for leaders of the company. Focusing on the success of a project can have an impact on your business and its main commercialization, development and survival. Orr: Business people generally look at the opportunities of international collaboration. They have clearly defined strategy and they know their endpoints. There will be risks that come up with relationships however; if you start thinking about risk and challenges before opportunity you may lose out on potential opportunities. Make sure you understand what you bring to a partnership , a lot of the time the mentality is what can I get vs. what can I give – figure out what you bring just not what you get. In the end, you will figure problems out if the opportunity is big enough. Make sure you have enough capital for time requirements. Deveau: Have  a  pitch  that  says  what  you’re  about  as  a  firm, it is beneficial when firms present themselves well and are  clear  in  what  they’re  looking  for. Myers:  Problems  arise   when  you  do  not  understand  the  culture  of  people  you’re   working   with.   Personal  relations  are   very important, business and collaboration are not just done on a transaction basis but also through personal relationships. Partnerships often fail because there is not enough focus on where a product is eventually going but rather on the technology and product design. De Sampaio Nunes: Dealing with problems in international collaboration: You must be sure about different cultures, and make sure you have enough IP protection. There are very different cultures and systems in terms of legal protection internationally. Opportunity in markets: Where does the technology element fit into this? Do you look for technology in market you’re  trying  to  pursue  or  vice  versa? Orr: Start with the customer - where are they and who cares about the tech. Not enough time and thought put into distinguishing and making distinction between tech IT and life science. Understanding timelines and markets – technology in life science is often the basis for a subsequent product whereas in IT the tech is often the product. Do you believe your institutions make that distinguishing feature of innovation between IT and life science technology? How much of this is a problem for you? Deveau: In the ACOA each type of tech brings its own problems. It is important to have knowledge of the culture you’re  going  into  and  to  be  respectful  of  different  cultures  you’re  dealing  with.   Myers: CME represents members from various sectors. Draw on expertise of different members to work together to solve  certain  problems.    Isn’t  a  linear  process  – depends on entrepreneurship throughout process De Sampaio Nunes: EUREKA – hands off in assessment, only determines if business case is credible, and if there are enough human resources. Not there to coach. Do you see institutions like IRAP etc. as really understanding differences between sectors or are they trying to apply a common model to both? Bogdan: A lot of young entrepreneurs do not understand the business of the client and the market that they want to build a business in. Create solutions with clients in mind. 112
  • Added cost and effort to go overseas, up front out of pocket burdens? Orr: IRAP is the best R&D funding agency in the country because they are close to customer and have enough knowledge. Bottom line in going internationally is that it takes time; you are not going to get all your work done in one visit. Also money follows good ideas and the people that can implement them. Have to be prepared to invest the time  and  if  you  don’t  have  the  time,  don’t  waste  your  time.         TIPS FOR PUTTING TOGETHER A SUCCESSFUL PROJECT This special session targeted firms and innovators seeking to engage internationally in their industrial R&D projects Moderator: Judith Young, Executive Director, Strategic and Operational Planning, National Research Council of Canada (NRC) Speakers: 1. Pedro de Sampaio Nunes, Head of the EUREKA Secretariat 2. Inga E. Bruskeland, Division for Innovation EUREKA/Eurostars, Research Council of Norway 3. Melanie Cullins, Director International Relations, National Project Coordinator (NPC) for EUREKA, NRC 4. Mark Burbidge, Senior Advisor, International Relations, Deputy NPC for EUREKA, NRC 5. Bill Dobson, Director Ontario (IRAP), NPC for SMEs NRC 6. Jon Funderud, a Research Manager at Seaweed Energy Solutions Ltd. of Trondheim, Norway 7. Nell Halse, Vice President of Communications at Cooke Aquaculture INTRODUCTORY REMARKS / Moderator: Judith Young : EUREKA   is   a   “front   door”   to   many   international   opportunities, and that this session is designed to be practical and to show how to get involved in the network. She compared the program to Pier-21 in Halifax, where it was a port of entry for millions of immigrants to Canada, mostly from Europe. EUREKA is a port of entry for partners from many countries, who come together under the EUREKA where joint R&D partnerships are forged, funding is secured, and projects get approved. SPEAKERS Pedro de Sampaio Nunes, Head of EUREKA Secretariat : Through EUREKA there has been over 30 billion euro in investment over 27 years, and more than 17000 organizations participating in over 4000 transnational projects. EUREKA is not centrally funded and works with a bottom up approach. You determine the topic, content, structure and project period based on the ideas and interests of the project partners. There are 3 main pillars of EUREKA: EUREKA cluster projects (large industry, strategic long term efforts, enabling basic and standard tech to allow products to enter successfully into the market. The average cost is 20 million euro, average number of participants is 20, and average duration 40 months) Individual projects (SMEs, with an average cost of 1.7 million euro, the average number of participants is 4, and there is an average 33 month duration) Eurostars (develops very innovative research – 10% of company should be dedicated to research – 1.4 million euro average cost, 3 is the average number of participants, and 29 months is the average time of duration. All companies must be primarily R&D based SMEs) 113
  • The impact of EUREKA is that 1meuros in public funds often results in 2meuros in private funds + 25 new jobs. The steps for applying for EUREKA are as follows: Submission of an application form Set up project consortium Main partner contacts the national project coordinator Contact the respective cluster office when applying for cluster projects Again, EUREKA does not provide direct financial support for projects, but it does cover virtually all tech areas, is civilian in nature, and project participants retain complete ownership of intellectual property rights (IPR). Some tips for success with EUREKA: Highlight adequate market prospects and clear objectives Involve sound partners from diff EUREKA member states outlining proper project management, Ensure clear objective and encourage technology innovation As a last note it is possible to have cooperation with countries that are not members of EUREKA like China, India, Brazil, USA, and South Africa, they just have to provide their own funding in their own way. Inga E. Bruskeland, Division for Innovation EUREKA/Eurostars, Research Council of Norway: When establishing partnerships, what are the best practices to pursue? Firstly you want to know what you are looking for: is it a strategic alliance between non-competitors? Between competitors? Is it a joint venture to develop new business? Is it a buyer-supplier relationship? Establishing these points will help to identify potential partners. Some companies come to EUREKA with partnerships in mind but you might still need to clarify: Who are your key partners? Who are your key suppliers? What key resources are you acquiring from partners? Which key activities do partners perform? Will your partner help you through the bureaucracy of their own country? Also you want to define if your collaboration is more of a partnership or if it is a subcontract. If you are just beginning to look for potential partners, where do you look? You can look in existing networks, on the web, through trade conferences, in partnering events, through EEN (which has a very good partnering tool for both tech and market partners), EUREKA clusters and national centers of expertise. Keys to success in international partnerships include: Be available - allow time for necessary preparation (partner search, project proposal, consortium agreement) Build a win-win coop - Show complementarities and added value of transnational partnership during and after the project Work on your consortium agreement early – partners all agree on what they bring into the partnership and what they will get out Melanie Cullins, Director, International Relations, NRC and National Project Coordinator (NPC) for EUREKA: I’d  like  to  speak  very   briefly  about  Canada’s  approach  to  EUREKA  to  set   the  stage   for  a  discussion  on  why  EUREKA   simplifies an otherwise complex challenge for those wishing to collaborate on industrial R&D projects aimed at new products, processes or services, with firms in EUREKA countries. As you heard earlier today, EUREKA is the largest industrial R&D facilitation network of its kind. It enables access to important markets in over 40 economies, substantial R&D resources, technology innovators and global value chains. 114
  • Canada, like all countries focused on competitiveness, recognizes the importance of accessing intelligence, resources and technology created beyond our own borders. It further recognizes that firms are often born global and that international engagement means access to enhanced innovation and markets through global supply chains. Technology partnering is an excellent opportunity to test the waters and bring together future business partners at a global level. International technology partnering promises great reward in terms of company growth through new technology and market  access,   but  isn’t   without  its  complexities.     There  is  a  need  for  the   right  mechanisms to simplify what can be an otherwise challenging process, reducing barriers to international industrial R&D technology partnering. This is where mechanisms like EUREKA are important to increasing potential for success. EUREKA adds advice, a credible network, and for approved projects, funding and labeling. EUREKA works by bringing together innovation support and funding bodies from each country to enable projects, and project funding, for two through to multiple partners. It allows them to engage together, at the same time, across all of these diverse national systems. EUREKA members ensure that there is funding accessible to its eligible and successful EUREKA participants. And it does so by allowing existing innovation support systems to be used. EUREKA is about synchronizing support rather than harmonizing support. This is critical to making the process more flexible, less bureaucratic and faster, in line with business needs and timelines. This is true across each of the three EUREKA mechanisms – individual projects, Eurostars and clusters. Innovation support tools vary dramatically in each EUREKA country and region. From tax credits to soft loans to grants to reimbursements to incremental human resources for projects. Eligible participants can be SMEs or they can be large firms. In either case, they often partner with research technology organizations and/or universities. Sometimes they all receive support from the same entity as is the case with Research Council Norway. Sometimes, they each need to secure support from different national entities. EUREKA is a key partner in creating a one-stop transparent shop with a simplified application process for international cooperation on industrial R&D projects. This diversity across all of the varied EUREKA member states reflects in many ways Canadian innovation support. Canada has federal programs with varied types of support aimed at small firms, large firms and other innovation actors. Regional agencies and provinces often have their own systems of support, also varied and aimed at different actors. This challenge of enabling effective, fast and simple international industrial R&D engagement has led us to EUREKA. Our membership in EUREKA is a Canadian membership. NRC has been given the role of delivering on this role for Canada. As part of that delivery, we have established a national coordinating office which engages on advisory services, promotion, governance and the necessary infrastructure for coordinating projects with our fellow EUREKA member countries. Further,  as  you  will  hear  later  this  morning  from  my  colleague,  Bill  Dobson  of  NRC’s  Industrial  Research  Assistance   Program, or IRAP, NRC has significant network across Canada support SMEs, which in Canada includes firms of up to 500 employees. This program provides support and funding to eligible SMEs for participation in EUREKA projects. NRC also supports its own researchers in alignment with its strategic R&D programs to engage as a partner in EUREKA projects. While this is in itself a very powerful program for engaging Canadian participation in EUREKA, NRC is not working alone in support industrial R&D in Canada. Therefore, a second area of significant focus for NRC in delivering on Canada’s   associate   membership   in   EUREKA   is   that   of   working with innovation support agencies across Canada to allow them to use the EUREKA network to support their own clients. Examples range from the Atlantic Canada Opportunities Agency (ACOA) which provides innovation support to its regional clients to other entities in Canada such as Alberta Innovates, which recently used the EUREKA umbrella to enable a client SME to label a clean tech project with a Finnish SME. This means that in Canada there are varied types of support for many types of innovators that can be brought to the EUREKA table. It also means for Canadian participants that they can continue to work with their tried and true innovation support entities rather than taking on a whole new set of terms and conditions and points of contact and red tape. 115
  • Whatever the flavour of support in Canada, NRC works to coordinate with the Canadian innovation support agency and relevant EUREKA members in each country to secure a decision as quickly as possible. To wrap up and turn the discussion to Mark on concrete application steps, from a best practice point of view, my advice is to contact us early and often to discuss what support options are available to you. Mark Burbidge, Senior Advisor, IR, NRC, and Deputy National Project Coordinator (NPC) for EUREKA: EUREKA is designed to simplify the complexities of international partnerships, to get projects up and running, and funded, as quickly as possible. There are six main steps: 1. You  start  with  an  IDEA  involving  a  EUREKA  partner,  or  if  you’re  looking  for  a partner in a EUREKA country. 2. You  contact  your  NCP,  and/or  IRAP  rep  if  you’re  an  SME  to  guide  and  advise  you  through  the  process. 3. You identify your sources of funding, IRAP for SMEs and other sources for non-SMEs, including regional agencies like ACOA, provincial programs, venture capital or self-financing. 4. You set up a project partnership (Collaboration Agreement) with the participants, with the Project Lead, and complete and submit an application. 5. The NCPs evaluate the proposal, and consult as required. 6. If successfully evaluated with a green light by all NCPs, your project is submitted to the EUREKA High Level Rep. for the coveted EUREAK labeling, bringing value and credibility to your project for future investors. Bill Dobson, Director, Ontario Region, NRC-IRAP and NPC for SMEs for EUREKA: There are three main things to consider when looking at EUREKA from a Canadian perspective: EUREKA is not a funding agency, it facilitates interactions but does not have funds. You want to set up partnerships that pre-date the actual projects and EUREKA helps to ensure these partnerships will be successful There are two types of funding available: Projects can be self-financed (financed by the participants themselves), or they can be publically funded through government (federal/provincial ) agencies and other public institutions Lastly, be aware of the necessity of a consortium agreement between partners If IRAP is being considered as a funding source, IRAP looks at projects to make sure they align with IRAP guidelines and that a consortium agreement is in place. Engage with IRAP early in the process. Jon Funderud, Research Manager, Seaweed Energy Solutions Ltd. Norway: Seaweed Energy Solutions Ltd (SES) is a Norwegian company that farms seaweed in the ocean for production of biofuels, feeds, and other products. In China to   harvest   seaweed   they  use   a   rope   based   system   which  is  very  labour   intensive.     Norway  doesn’t   have   the   resources   to be competitive with this kind of system so it was necessary to think differently and come up with a unique commercial solution (seaweed carrier) which is now in development. SES is a small company with operations in 3 countries  and  they  are  an  example  of  a  Eurostars  project  entitled  “Seaweed  Stars”.       Their international collaborative partnerships include: A partner in Portugal involved in R&D (Climar) biology research Stolt Sea Farm in Spain which is a hatchery development industry Aqualine from Norway which has industrial tech experience on the development of fish cages which SES is looking to transfer to seaweed And Winds from China which works in industrial carrier material development (developing advanced textiles for sports clothing and other uses – develop right carrier material for SES) Lessons learned from this Eurostars process include: Different minds think better – people with different backgrounds can work well together to increase productivity and create new and better solutions. Geographical distance is not a big issue – Skype meetings are good as travel costs can be high. 116
  • SME is the boss of the project and distinguishes their own drivers and goals to their research partners – the end goal is to make a product, not to follow a research plan. Also it is very important that the SME is involved with the research process. Be prepared to change course – this request is sometimes unusual for strictly R&D institutions Through their collaboration with EUREKA Eurostars, SES is about to commercialize their product. Nell Halse, VP communications, Cooke Aquaculture: Cooke Aquaculture started small, growing larger overtime and is continually adapting to remain competitive in an ever changing challenging environment. Originally started in 1986, Cooke now has operations in all Atlantic Provinces as well as in Chile and Spain. They  believe  in  “Integration   from  egg  to  plate”  and  they  have  their  own  programs  and  divisions  that  deal  with  such  areas  as  food  stock,  hatcheries,   farms, box manufacturing, fish health and marketing. Their investment strategies promote synergy, growth and diversification via products, geography and markets. Cooke has been able to secure partnerships with many different companies across Canada and internationally. And they are continually looking for new innovations whether they are focusing on fish health or new uses of fish products.    A  challenge  that  Cooke  has  faced  is  that  many  funding  programs  don’t  fit  with  their  company  dynamics.    For   instance  most  international  partnership  funding  agencies  don’t  include  international  branches  of  the  same  company as is the case with their operations in Spain and Chile. Also since they are a large company now, they no longer are eligible for funding set aside for SMEs even though they still need support to work new products through the system. QUESTION PERIOD How does the US get involved in EUREKA? De Sampaio Nunes: American companies can participate as partners of other companies that are a member of EUREKA. Bruskeland: If there are two partners from EUREKA member companies, then you can have an American partner as well. A partner can also self-contract an American company. Only thing is that an American partner wanting to take part will have to find other source of funding. To Jon Funderud : If you were thinking of applying to Eurostars today would you do anything differently? Funderud: I would get the research partner to understand how the SME wants to drive the project and how that is different than what the research partner might normally do. It is really important to put together the right team of partners for the problem you want to solve To all: Companies are told to come early, but also to come with funding, and with consortium signed etc. Can you explain this? Bruskeland: EUREKA is approached quite early on in a project. Some companies when they come want to know “what   are   our   opportunities?   What   kind   of   funding   is   available?   How   do   I   look   for   partners?”     Other   companies   already have partners, know where they want to go, and have consortium agreement but they come to EUREKA to help find and coordinate funding. EUREKA helps guide projects to appropriate national funding agency. At what point does the SME need their patent filed? 117
  • Cullins: EUREKA is set up to be flexible, and it is up to the different partners to determine their own agreement especially  with  IP.    Also  you  have  to  determine  the  timeline  for  an  agreement  as  EUREKA  won’t  approve  a  project  until   all parties have discussed their consortium agreement. Special thanks to Jackie Zorz, Master of Biology candidate at Dalhousie University in Halifax for the note taking. 118
  • SESSION 5B: THE ROLE OF SUSTAINABLE AQUACULTURE REGULATION TO SUPPORT GROWING FOOD PRODUCTION Sponsored by: Jonathan Grant Department of Oceanography Dalhousie University, Canada Henry Clifford Vice president Marketing & Sales AquaBounty Technologies, USA Adel el-Mowafi Managing Director Ewos Innovation AS, Norway Sigve Nordrum Senior Vice President Aker BioMarine Antarctic AS, Norway Ruth Salmon Executive Director Canadian Aquaculture Industry Alliance, Canada Key Take Away Message : Aquaculture regulation is a diverse topic covering aspects of environmental impacts, disease management, and even global fisheries. Country-specific regulations may not keep pace with changes in industry. Companies and industry associations seek a stronger risk-based approach, buoyed by principles of sustainable development. The need for international progress in regulation is dictated by health issues in product transfer, licensing of therapeutants, licensing/labelling of GMO species, and sourcing of feed components. Specific reference was made to a contrast in salmon farming growth in Norway compared to Canada, suggesting that the lower growth in Canada is due to the regulatory regime. Emerging issues such as incorporation of GMO, suitability of agriculture-based models, the relationship between certification and regulation, alignment of international regulations, and necessity of public engagement were also debated. For example, boom and bust cycles of shrimp or fish production caused by disease outbreaks is a significant detriment to the industry relative to agriculture where it is less prominent. A focus on these topics will remain critical in coming years against a backdrop of climate change and internationalization of the industry. A sciencebased approach with support from industry remains a cornerstone of the business model. 119
  • Jon: By way of introduction, I have worked in aquaculture for 25 years. My research is in ‘aquaculture oceanography’ from a systems point of view. We study and model the transport of materials in the environment, conditions in which the fish live, conditions of the sea bed, simulations of single bays, nutrient distribution, and growth rate of fish. These are spatially explicit models that are important for marine spatial planning and coastal zone management. Aquaculture regulations are a broad topic. Regulations are the interface between producers, government,  ENGO’s  and   consumers, covering the production of marine protein and lipids all the way to the grocery store, so there is lots of scope. In Nova Scotia we are in the midst of an aquaculture regulatory review. The current regulations are a mix of provincial and federal oversight. Overall there have been 42 public meetings with stakeholders. This is a lot for such a small province, so the discussion of aquaculture regulations is currently very active in the province at the moment. I thank the Panel for their participation and invite them to please provide an introduction and opening comments. Ruth: CAIA is advocating for the sustainable growth of the industry. Despite international demand for seafood and a stable international growth rate of aquaculture (8% per year) we are not seeing this growth in Canada, as we have flat lined. The failure for Canada to realize our potential has largely been due to inappropriate legislation, which has made it impossible to develop good regulations. The current legislation is the Fisheries Act written 140 years ago to guide a wild fishery, not aquaculture. The Industry   can’t   step   in   and   implement   scientifically   proven,   environmentally   sustainable technologies because of inflexibility of regulations. Critical elements: Regulatory   framework   can’t   be   based   on   the   precautionary   principle.   We   need   a   sound   risk   management   framework that is evidence-based. This framework must take into all account all forms of risk. Currently we only look at mainly biological risk. Assessment needs to take in all cost and benefits (social benefits). Risk management should be on an ad hoc basis. Performance or output based regulation (not command and control based) We should have collaboration with our international counter parts (feed ingredient approved in Norway) should be approved in Canada as well. Sigve: Aker Biomarine is a fishing company in Antarctic: sustainability is focus. Sigve is also Chair of the program board at the Norwegian Aquaculture research program in the Norwegian Research Council. They fun 20 million dollars for aquaculture research annually. Background in supplying the aquaculture industry and looking at priorities for science in the aquaculture industry. Norway salmon culture is growing, unlike Canada. Norway has its own political representative, the industry is still growing. Norwegian growth is fairly consistent, generally without production collapses due to disease or market problems. There has been significant investment in knowledge and management infrastructure in this area. You need to have enough knowledge both on the science side and the management side. Adel: We produce Salmon feed in the main markets, including a division in Vietnam for warm water species. Research stations exist in 14 different places, and we have experience with regulation in all these different locations. Henry: I was a researcher working for multinational, working in shrimp farming, than I became more involved with project development. Today my perspective is as a producer. I worked 25 years in the shrimp industry. After that I was invited to join AquaBounty, where we are dedicated to productivity enhancements via genetic engineering. I am excited about this innovative new product that we have. Of course it is slightly controversial. I have the job of marketing a product that is paradigm shifting, but also controversial. Current seafood production requires the use of innovative  technology  to  meet  the  world’s  demands. 120
  • Jon: Regulations  don’t  seem  to  keep  pace  with  the  innovation  of  the  industry.  Any  comment  on  what  areas  need   to be reformed Ruth: Good regulation flows from good legislation;   the   current   fisheries   act   doesn’t   mention   aquaculture.   Current regulations are simply a patchwork of the current legislation; we need to look at these legislations. Command and control regulations are not working, they become outdated as soon as they are put in place; we need to focus on performance based approach that can keep pace with innovation. And first, we need legislation that reflects this. Henry: Exotic diseases: ISA, Shrimp pathogens, very catastrophic economically. These diseases are originally localized, and then unaffected countries attempt to prevent introduction of the diseases into their country by blocking the importation of live, fresh and sometimes frozen product. Regulations may be warranted, but we need to verify if the commodity products  are  still  infectious;  some  products  are  still  infectious  when  frozen,  some  aren’t.  EMS  (early   mortality syndrome) is not in frozen commodity shrimp (recent discovery). Jon: Disease management, pest management, disease, treatments are all highly regulated. Is there a good model from Norway in these areas? Adel: We need to look at big picture first. We need the regulation to be an enabler, current regulations are a bottleneck. We need more regulation to enable the aquaculture industry. For example with sea lice, in Norway current regulations are working well, but we need to do more of this. However we   haven’t   moved   this   to   other   countries.   We   warned   Chile,   but   they   thought   they   were   immune.   We   need   to   integrated management systems, this is where aquaculture regulation works. We need regulations on the rotation of medicines and to prevent using generic drugs. These generics can reduce the efficacy of these treatments. This will help solve problem of resistance development that we see in sea lice. Ruth: To have an effective Integrated Pest Management Program, we need greater access to a variety of treatments. We   can’t   have   these   programs   without   more   treatments.   So   we   need   more   flexible   and   appropriate   regulations   to   approve more products. Henry: I am philosophically opposed to increased regulation, but when it comes to disease management, I do believe additional disease management regulations are required. However disease regulations are typically late to the game, we need to be proactive not reactive. Sigve: Yes disease regulations are very important: we need to understand the vectors, need to understand the spread. To make good regulations we need very extensive knowledge of what is happening in these systems. We need to increase our biological knowledge. We also need more information on feed ingredients, build up expertise of skilled veterinarians, skilled officers. We need to grow these areas of expertise for the industry to develop. Need to avoid unchecked growth of aquaculture; this is where we see growth and collapse. Not good for anyone. We need regulatory expertise. Jon: Boom and Bust may be less common in agriculture; are there lessons to be learned from agriculture? Ruth: We have a good view of agriculture, the industry is well understood and regulations reflect what they do. In Canada,  aquaculture  is  poorly  understood,  we  aren’t  considered  as  farmers  under  the  fisheries  act.  If  we  are  viewed  as   farmers and viewed as producing food (which is what we do), well then we need legislation and regulations that reflects that. Henry: Why does the legislation not consider aquaculturists as farmers? 121
  • Ruth: The legislation is old, when it was made aquaculture was non-existent in Canada. There is nothing in the fisheries act to reflect that we exist and that we are farmers. Adel: There is much to learn from Agriculture, most background comes from agriculture, lots to learn from them. In aquaculture if we pollute and we pay for it. In the Livestock industry there is approximately 5% mortality, whereas in Norway there is about 15% mortality in salmon aquaculture. By learning from agriculture we can get these mortality losses down. In Norway if you take the volumes of the big 4 agricultural proteins (Pork, Beef, Chicken, Eggs) add them together and multiply by 4 and you get salmon production. Jon: Regarding aquaculture regulation and lessons to be learned from agriculture, my concern is that if Agriculture Canada   were   tasked   with   a   marine   farming   agenda,   they   would   say   they   don’t   know   anything   about   the   ocean. Moreover, the environment of a dairy farm is much more manipulated and controlled than a fish farm in the ocean. Big difference. Henry: We are moving more toward the agricultural model, by adopting technologies that control the uncertainty in the aquatic (ocean) environment. Jon: Does GMO have the potential to be the 21 century form of selective breeding? Henry: My career is in breeding performance improvement. Traditional breeding programs are useful but tend to be slower, and less precise. Migration of hundreds or thousands of genes can occur during traditional selective breeding with frequently unpredictable consequences, and we have no control over how they will be available or which ones will be expressed. Genetic engineering, on the other hand, is much more precise, like a laser. We can take a single gene with a known and predictable function, and insert it into the plant or animal. It is an impressive way to achieve commercially important traits with potentially tremendous benefits. We recognize there must be the necessary oversight /regulation. We hope that the regulatory review process will be product based, not process based. So that advances that solve problems in the real world will be approved. The Precautionary principle, allows for too much introduction of philosophical perspectives. Sigve: There  is  the  perception  that  should   be  very  careful  fishing  in  Antarctica,  we  have  discussed  openly  with  NGO’s,   focus on being open and being very science based. We harvest very low amounts, but that doesn’t  matter  if  people   don’t  trust  us.  We  need  to  have  openness  and  communication,  and  be  humbled.  If  people  are  worried  about  something   it’s  coming  from  somewhere.  We  need  to  simply  communicate  the  information  so  they  can  be  trusting  of  our  activities.   Adel: The potential of improving genetic/ family wise, learning from agriculture, this genetic improvement has huge potential. We have meat chickens ready in 6 weeks in chicken production and chickens that lay an egg every day. Genetic improvement has the highest potential for increased growth/production. In   terms   of   GMO  in   feed   production,   in   America  we   can  use   GMO   materials   in   feed.   In   Europe   can’t,   or   have   to   have   a   label.  So  in  Europe,  retailers   won’t  carry  the  product  with  the  GMO  label.  But  accept   p roduct from other locations that don’t  require  the  label.   Henry: The opponents have hijacked the narrative, and have attempted to claim that the products are not safe. However we need to repair this misconception. We need to educate the public in language that they can comprehend, so that they can understand what are genetically modified foods. If you survey a random sample of consumers, a portion of those consumers who already understand what GE foods are, will embrace it. And at the other extreme are the fanatics who will never embrace it. But in the middle of those two groups is a very large segment of society who are undecided because they do not really understand what GE foods are, and they need more information. Once you educate them, and once they see that the GE foods are approved by government agencies that they trust for example the FDA, they feel more comfortable about embracing the technology. We need to gain their confidence. 122
  • Given the EU stance on GE ingredients, which has very little scientific basis, it makes it difficult to harmonize the regulation of GE foods in the US and EU. Jon: Climate change and increasing sea temperatures are upon us, making many culture areas outside the thermal limits of salmon. Is this something that GMO might consider? Henry: In Tasmania, they are projecting a 3 degree increase in coastal water temperatures due to global warming, and those additional three degrees present lethal or sublethal conditions for salmon, and effectively reduce the production area available to genetically engineer a salmon with a higher thermal tolerance is a tall order, not sure if anyone  is  looking  at  it  (long  term  process).  But  it’s  a  good  example  of  looking  for  a  desirable  trait. Jon: What about krill harvest and warming temperatures? Sigve: We collaborate with marine scientists that enable us to plan more long term. We bring them on the boats, and help them do the science to guide us. Currently we are seeing too much sea lice. However we are collecting data, looking at the data and developing management plans. Jon to Sigve: Your fishery is managed via an international body. Is it difficult to argue that one country is hijacking the resources? Sigve: Regulations are in place to prevent illegal fishing. If you are fishing illegally you can’t   label   product,   can’t   move   product  over  borders,  and  if  caught  illegal  fishing  you  can’t  sell  your  ship,  can’t  fish  in  other  areas  (black  listed).  These regulations help protect the resource. Jon: What about the general question regarding sustainability of fish feed derived from capture fisheries? Sigve: Third party certification is helping us communicate the sustainability of our fishery, ensuring that it is a sustainable feed source. Adel: We try to use certified feed, use products that have labelled  as  sustainable;   we  don’t  assign  the  sustainability   label.   We   have   increased   the   use   of   trimmings,   it’s   been   a   great   story,   but   that   story   is   not   communicated   well. Ruth: Certification is market driven and serves a different function than regulation. In some cases we see regulatory creep,   where   regulations   begin   to   cover   things   that   should   be   covered   by   certification.   It’s   a   great   news   story,   the   success with certification regimes, but we need to clearly differentiate the two – certification and regulation Henry: Industry should be congratulated for the advances it has made in such a short period of time (feed). Biotech is a huge opportunity to improve the growth performance (fish in fish out). Fish in fish out ratios have improved considerably already thanks to the aquaculture feed industry; biotech could improve that even more. Ruth: We   need   both   regulations   and   certification,   they   are   complementary   but   roles   shouldn’t   be   blurred.   Industry   has gained by embracing third party certification. . Adel: The transparency and claims of the certification should be regulated, but overall they are different. Henry: Certification should not be driven by regulatory pressure; it should be market driven. Still, there is a lot of consumer confusion on the nature of the different certifications. Regulatory agencies could help by pushing for harmonization of the certification bodies. Ruth: I think we are starting to see this harmonization in the market place, without regulatory agencies trying to make it happen. Audience questions: 123
  • Dave Conley, Aquabounty:   Aquaculture   act   worked   on   for   over   a   decade   maybe   even   15   years.   We   don’t   have   a   leader with the political will to say that this industry is good for the country (Canada/US). We are still discussing if aquaculture is a legitimate use of the resource. AAC is 30 years old, still talking about the same issues today. We have not seized our potential. Ruth: I see some shift there; this government is focused on economic prosperity. In meeting with politicians/leaders they are shocked  that  we  have  been  stagnate,  where  other  countries  have  grown.  They  don’t  like  the  idea  that  we  have   seen a decrease in market share by 40%. This is starting to resonate with politicians and I anticipate we will see increased vocal support for aquaculture. Adel: As an industry we are looking for new markets. We look where do we want go. You need a vision. And regulation is an important part of that vision. We need regulations to operate. Look at Brazil, they are in their infancy. However they have a vision. They say they will be #2 behind China. Investment sees that strategy and flows there. Veronica McGuire - CFIA: Regarding international alignment, I am interested in the perspectives of the US, and Norway. How important is international alignment of regulations? Adel: I think we need a new updated feed act that is more focused on safety and less on efficacy Some service standards say they take 90 days, but they are taking 14 months. This is too long. Glad to hear there is modernization in the works for this process. Regulations need to keep updated with the science, in particular for fish nutrition. We have reduced marine materials and in doing so we need to supplement some materials because of these changes; however regulations prevent us from realizing these innovations. Fish meal is a large source of Vitamin D, so many people are deficient on vitamin D, but regulations prevent the addition of vitamin D to the feed. Need to focus on speed of product review. Chris Viddy – Skretting NA: Look at stagnation in Canada and growth in Chile (too much) compared to stable growth in Norway. How do we do that (What Norway is doing)? Sigve: We have a problem with sea lice now, but we will develop a strategy. The regulations must accept the industry and then you must have scientific capacity to create innovative solutions to address these problems. Adel: If the industry is not profitable, it will never grow. This is a profitable industry; we are raising the most luxurious food product. We have tremendous R&D capacity. This is why I get up in the AM. Jon: If you could get public consensus on single question? Ruth: Acceptance of us as farmers and a legitimate user of the resource. While In Norway, we had a server in the restaurant ask us what we were doing in Norway.    We  said  work  with  the  aquaculture  industry.  Her  response  was  “oh,   aquaculture   that   is   the   future”.   It   is   our   hope   that   we   get   that   view   in   Canada.   Sound   regulations   and   appropriate   legislation are central to that. Sigve: You do want regulations for predictable business operation, and a management system that is competent so that they make good decisions. Science support is predictable and fact based method for discussion. Aquaculture industry is the future; need good young talent, experience from both farms and academia so they can be useful. Adel: How we handle the misinformation of the public. Need to do a better job promoting our product. Henry: Government and industry need to work together to produce a risk based model, that measures both the risks and the benefits with the ultimate goal of producing seafood product in sustainable way. We need to also consider the risk of inaction, excessive caution or regulatory burden. Norway is doing a good job, good template, role model from aquaculture. 124
  • Special thanks to Peter Sykes, PhD, Atlantic Veterinary College - University of Prince Edward Island for his help in the note-taking. 125
  • SESSION 5C: INDUSTRIAL BIOTECHNOLOGY – OPPORTUNITIES FROM THE SUSTAINABLE USE OF MARINE BIORESOURCES Sponsored by: Ernst Kloosterman Chief Executive Officer Industrial Biotechnology Network, Norway Jacqueline Allan Senior Policy Analyst Head of Biotechnology and Nanotechnology Policy, Directorate for Science, Technology and Industry OECD Ilka Czech R&D Director SeaGarden, Norway Peter McDonald Marketing Director Scanbio, UK Mark Rottman COO & Board Member Bluewave Marine Ingredients, Peru Guy Viel Executive Director CRBM, Canada Key Take Away Message The conclusion of this session may be that the growth of the biotechnology sector is not limited by the availability of bioresources so far, nor in the near future. In terms of growth and increased value added, the sector will benefit from better knowledge and knowledge sharing regarding ( the composition of) bioresources and their applications, hereunder and not least byproducts from fisheries and aquaculture. This information on raw materials should be free for distribution to allow the development of more efficient processing. Alternatively, and overall, will a better collaboration between private and public actors  serve  the  sector’s  development.  Additionally  there  is  a   role, internationally, for governments in facilitating the right environment for businesses to grow, in a responsible manner, in a sustainable way. 126
  • Introduction Ernst Kloosterman: The marine environment is a rich source of both biologically and chemically diverse organisms. Integrated programs capitalize on this marine diversity by providing innovative, sustainable solutions to transform these resources into both traditional and novel bio-products. Marine industrial biotechnology offers product development opportunities in applications ranging from food and feed ingredients, to cosmetics & cosmeceuticals, nutraceuticals & pharmaceuticals, and the production of fine chemicals, to name but a few. Marine biotechnology offers many ways of making living marine resources ever more usable for people. This has been discussed throughout this conference. It is true that marine biotechnology is still in the early stages of its development, with many next steps to industrial scale production. However, it is regarded as having great development potential and as being of great importance for the future. In this session, we hope to elaborate on this importance and potential. Let me give you some numbers: Despite having an annual return exceeding $172 billion, limited resources are devoted to marine activities within the various global industries. Marine biotech development is: 8 % of the total biotech market < 1 % of the total biomaterials market 2 % of the energy market from marine bio-energies < 8 % of the energy market from marine renewable energies 12 % of the global animal protein market from aquaculture 6 % of the chemicals market 13 % of the cosmetics market 32 % of the nutraceuticals market 38 % of natural compounds market from marine ingredients The  figures  indicate  that  marine  ingredients  have  a  good  position  in  ‘ceutical’  applications,  but  also  that  there  still  is  a   potential for growth, not at least in the other markets. But is there? We have heard a lot of debate about sustainability versus productivity. A   recent   Norwegian   report   published   in   2012   on   (loosely   translated)   ‘Value   creation   based   on   productive   seas   in   2050’   describes   a   scenario for an increase in marine value creation in Norway, from approximately 8 billion US dollars in 2000, to 15 billion $ in 2010 and 40 billion $ in 2030, to approximately 90 billion $ in 2050 an over 10 times increase in this century. This includes algae, aquaculture (salmon and new other species), feed, ingredients, fisheries and new species. Can we just extrapolate these figures to other parts of the world? In this session, we want to understand what the possibilities are and therefore what the opportunities are, for industry, and society from a broader perspective, based on a sustainable use of the marine resources. We have to 127
  • understand whether sustainability requirements can allow for an increased harvesting of resources, and how to regulate or control this. Equally important is to understand how we can increase the use of marine resources, the yield of catch and harvest, by cutting back waste streams, through better and more innovative use, processing and application of byproducts. Additionally, within this, what are the roles and responsibilities of private industry, R&D, governments and international organizations? Now we are speaking about international organizations, in this session we will hear more about the OECD report on marine biotechnology, launched this weekend. Part 1. An  introduction  to  the  session’s  Industrial  Biotechnology  actors.   Let us have a closer look at our panelists organizations’  activities  and  hear  how  these  contribute  to  or  operate  within   a sustainable marine industrial biotechnology sector. Ernst Kloosterman, Norwegian Industrial Biotechnology Network, Norway: The IB Network is a national not-forprofit member association of organizations and individuals who want to contribute to a stronger growth and economic value creation of the Norwegian biobased industry. The network focuses on biotechnology industry involving the use of biorenewables and biological raw materials from marine and terrestrial resources. Its members are actors from different (marine and terrestrial resources based) sectors of industry, R&D, educational institutions and capital/funding organizations. One of the pillars is the believe forestry, agricultural and marine biotechnology sectors can learn from each other: knowledge and experience transfer across sector borders will enhance the development of the whole biobased industry. Additionally, improving information cross-over between investors, R&D and industry will contribute to a better understanding of mutual interests and opportunities. A better understanding of market and investment opportunities will in the end strengthen the development of a sustainable industry. Jacqueline Allan, OECD: The OECD has 34 member countries and collaborates with many more, including Brazil, India and China, as well as having a long reaching network working with countries at governmental level. The Directorate for Science, Technology and Industry has a strong international policy focus on biotechnology, including not least marine biotechnology as an emerging area of policy importance. Many of the things we heard over the last few days link well with the findings of the new OECD report on marine biotechnology : the need for countries to develop a national strategy, in light of the growth of the marine biotechnology field, the benefit of exchange of good practices between countries, the need to retain a focus on utilizing the marine in a sustainable manner, not forgetting the priority role of consumers and other stakeholders in discussions and the importance of communicating with policy and public sector communities. These are the overarching themes for the work of OECD, the importance of networks for exchange between governments and including stakeholders from industry, the research community and the public, etc. There is no agenda to push at the OECD, but instead it is a forum for governments to aid them to put together sound policy advice. The OECD STI report on marine biotechnology was released this weekend in timing with this BioMarine 2013 event, a report drafted by Dr Rachel Ritchie, formerly of the OECD and now of Genome BC, and Dr James Philp of the OECD under the guidance of the OECD 128
  • Working Party on Biotechnology. The report is largely based on a conference from last year, facilitated through the support of Canada, Norway and Korea. The main messages of OECD report highlight the importance of co-ordinated action at national and international levels in bridging the gaps between international partners, to enable the sharing and protection of the marine environment. Another issue is the importance of enabling cooperation at international level with regard to infrastructure for research and development - platforms, databases and collections – and also the need for measures to track the implementation of policies, to assess if the policies work, are they achieving what they mean to achieve? We are also working on this area in more detail now, developing work on statistics and indicators to track indicators relating, for example, to economic growth, and environmental impacts. Ilka Czech, Seagarden, Norway: Seagarden is a small company employing 40 people that operates in the field of seafood ingredients, health and nutrition as well as pharma and personal care. It uses byproducts from marine sources for these purposes. Based on the acquisition of the seafood ingredients business from Rieber & Son, Seagarden built a multi-functional production facility to produce seafood powders and extracts, for use in soups, seasoning & ready-meals. A chitosan production plant, taken over from BASF, was integrated into Chitinor, a Seagarden daughter company. Chitinor produces chitin and chitosan products from shrimp shell from the shrimp peeling industry. These products find their applications in skin and hair care, pharma and medical devices. In 2011, Seagarden entered a global patent license agreement for use of a bioactive ingredient, which is an immune stimulating component with beneficial gut health impacts, for producing a consumer end-product. The company has established solid knowledge of extraction and processing of bio-actives and ingredients from (by-products from) fish and other marine organisms, and is continuously looking for new opportunities and new products. Peter Mc Donald Scanbio, UK: Scanbio started as a family-based company based in Norway, which was acquired by Paine & Partners, a New York based group specializing in marine and agriculture sectors that also owns Icicle Seafoods. Scanbio's origins go back to the mid-80s and its turnover this year was approximately 70 mil USD. They specialize in producing hydrolysates from salmon and white fish in Norway. Sustainability is a theme to return to in this discussion but it is noteworthy that the consumers feed market, pet food etc. need to know where product has come from. Business has been replicated in other parts of the world, but 85% of it is located in Europe. Right now Scanbio is looking for growth in the future, particularly for fish protein concentrate (FPC) from silage and byproducts, which is a relatively simple solution. Growth is anticipated in animal feed and pet food. Scanbio will make use of the synergies for the production and application of proteins and amino acids, from fish byproducts. Compare to for example the synergy in soy. Mark Rottmann, Bluewave Marine Ingredients, Peru: Bluewave is in the business of taking fish raw materials and hydrolyzing these into higher value added products. The company is four and half years old. Bluewave has four factories and a pilot scale facility in Ecuador. One factory in Peru uses whole anchovies and produces food grade products for human nutrition. It processes essentially a fish that most westerners don't eat and put it in a format to be included in many products. The Gibraltar factory processes byproducts of Spanish aquaculture. It has an FCP product containing 60% protein and a fish protein isolate with 85% protein. Fat is removed through a mechanical separation process resulting in a high value low molecular weight product that can be funneled through the human food stream. 129
  • Guy Viel, Marine Biotechnology Research Centre, Canada: Marine Biotechnology Research Centre (CRBM) in Rimouski, Quebec, has been operating for 10 years within applied biotechnology and marine biotechnology. CRBM is a private non-profit organization working with university, private and public organizations. The facility has 35 members and at least active 55 private users per year. From 2004 to 2013 CRBM had 25 million dollars in revenues with at least 42% of private funding, including 14 % private funding with activities with purely marine biotech link. The facility of 2700 square meters includes labs and pilot plants that work with different partners. It also carries out some work under Good Manufacturing Practice, and is subject to regular private audits. CRBM is a member of the Quebec maritime cluster Technopole Maritime du Québec. CRBM fulfills development of marine biotech applications from applied research to industrial optimization, including subject areas of applied and analytical chemistry, extraction processes, molecular and cellular biology, industrial microbiology and biotechnology. The steering committee and regional opportunities strategically orient developments towards bio-pharma, biochemical and bio products at this facility. Byproducts from fisheries and seaweed and micro-algae are some themes of research and technology transfer, and project development including supportive aquaculture development. Part 2: Sustainability versus productivity Ernst: We have an interesting mix of representatives from policy, business and research and development in the panel. That should give a good discussion on sustainability and production development. At the same time, we have quite  a  ‘span  of  interest’  in  the  panel.  OECD  addresses  a  different  perspective  on  sustainability  than  the  panelists  from industry do. The activities of the latter are largely based on the use of byproducts and/or are confined to a few resources, while the OECD has a broader perspective and covers all marine bioresources. Ernst to Jacqueline: What does the newly launched OECD report say/advice on sustainable use of marine resources? Does it see possibilities for a strongly increased use and harvesting of marine organisms? I refer to the Norwegian scenario of a 10 times larger value creation in 2050 compared to 2000. Can you distinguish between better use of byproducts and new fresh materials? Jacqueline: It is more the practitioner that needs to decide the realistic balance between the use of byproducts and new materials, and we have frequently discussed at this convention issues related to extracting the most value from a marine raw material. There appears great potential for increasing the productivity of the marine in areas such as food, health, energy but also at the same time sustaining the environment. There is potential to gain from developing new areas and resources but also to gain more from what is already available. There is a lot to experience and research to draw on. In terms of future development, at the core of the report is the concern that there is the potential to repeat some mistakes that we have made on land. The only way this will be achieved, for the marine to be developed responsibly, is through international cooperation with all countries working to this end to ensure sustainable development of the marine environment, with marine biotechnology being an important tool in that. It is so important for countries to discuss this with all levels of stakeholders, public and private sectors, including not just multi-nationals but industry at all levels, and the wider community. This might sound ambitious but it can help us to make the best use of what is there by finding new solutions. 130
  • Ernst: Is the amount of resources a limiting factor to growth? Mark: The amount is not a limiting factor, but the processes may be. We need to get products on the shelf, like cereal or milk products, and we need to base these on fish. In the next ten years we will have enough raw material, but we need more applications and develop more or better processes to produce these products. Peter: I agree with Mark, one issue increasingly faced is that we will be selling products based on amino acids and peptides rather than protein. We know what the conversion rates are in fish versus cattle etc. Customers will be focusing more and more on amino acid specifics. Buyers want to know about specific amino acid profiles offered by products. Ilka: It is not a question of limited raw material, there is still potential to increase the production capacity. But there is also a high potential of creating higher value, not only through use of higher amounts of raw materials. Ernst: The OECD report mentions the development and use of new platforms to improve the development of biotechnology and industrial processes. How much can we gain by making better use of raw materials (bioresources) and production processes that are more efficient? Guy: There is not any easy answer to that. In reality, we have to take a decision to do innovative projects that will answer to the sustainability issue in the different areas of development. For example, we are trying to stimulate private projects of seaweed aquaculture. We have projects linking different private companies using high-density micro-algae production processes. We have to evaluate different sources of sustainable marine biomasses for the development of added-value products, like for example the development of chitosan products. We cannot focus on one type of marine resources, but we have to focus on multiple sustainable resources to support the sustainable development and the growth of the industry. Moreover, in our projects, we discuss management of marine biomass transformation processes, so that at the end of the process there will be no waste. We look at the process as a complete biorefinery approach. Sustainability means also to have access to the most up-to-date knowledge of the current resource and its environment to allow a sustainable decision for a biotech research and development project. In this respect, we believe there is a need for a global observation system to give access to data and resources, like the St-Lawrence Global Observatory in Quebec. These type of initiatives deserve more support. Part 3. Collaboration between R&D organizations/universities and industry Ernst: I mentioned in my introduction that technological developments are still in an early stage. What can we expect from R&D/Science with regard to increased production while we realize a sustainable use? What in your opinion should get most attention and support to boost the development of industrial biotechnology? Do you have an opinion on use of byproducts versus new materials? What position does it have in your activities? Peter: In Scanbio there are both product and process development projects together with R&D institutions going on. I think we need very much collaboration driven by private partners, with fish companies and pet food companies. 131
  • Additionally, there are areas to have governments to help to get others involved to enable more quick movement. Much is still in a development stage, but this might help to create more value in the product itself, and also the total turnover. Mark: Most of the private companies will do research on animal feed and pet food, flavors etc. Government needs to step in and do or support advanced research on marine raw materials. You have to go to sea and take bio-diverse characteristics. By looking at these new biomaterials, these new components, you can target novel applications in this material itself. Ernst to Guy: How to improve collaboration between R&D and Industry? How does your institute collaborate with and transfer knowledge to industry? Guy: The role that CRBM has with this type of research is to take care of the innovation process of the private partners. We need to see what is available in current technology that can be adapted to this process. We also look at regulation requirements and how these impacts technology transfer. We try not to duplicate what another company is doing, but strive for more innovation to give more added value. Ernst: Do we need to develop more in the area of the process development? Peter: There is room and need for more process development activities, now the demand for pet food and higher value added aquaculture products outstrips the animal feed sectors. Increased research and development may accelerate this trend. Ilka: For our core production, we planned and built the site from 2009 -2012, and we tried to make it as multifunctional and flexible as possible to allow for processes for the future. The plans were based on our primary applications but with room for growth for future more advanced processes. We have in-house resources to support this development, but also work together with research institutes. Ernst: The freshness of material is an important component in this matter, i.e. for the application possibilities. How much is this a driver for application and process development? Peter: That depends on output or end use and whether you deal with manufacturers of fresh products or must meet the need for a long shelf life, such as aquaculture feeds. Logistics may be well so important. Mark: We had to build a bioconversion factory right next to a raw material source, so that the raw material could go right and fresh into the end application. Ilka: We do the same. We have production sites close to fish processing industry. You have to evaluate where to build your factories, as you are dependent on location and fish processing industry. Ernst: What does the availability of new bioactive compounds/components mean for your existing businesses or (new) business development; are you looking for new or improved bioactivities? In new species, or do you keep on focusing on byproducts? 132
  • Peter: In the UK we are working with the University of Leeds and with pig producers. They need fish products in their pig feed. There is a health advantage, but that is not fully understood. There is also the use of hydrolysate, with which there is a reduction in visceral mass in fish. Ernst to Mark: What triggers your will to develop your/new business? Can you comment on financial feasibility versus sustainability? Is this a good return on investment? Mark: We are looking to grow high value. Like what agricultural producers did with biomaterials such as corn, corn flakes, which now is produced into 15 different downstream products. With fish we could have fish protein in bread etc. The demand could way outstrip our ability to produce. Peter: At Aquanor we had discussions with some Vietnamese. They have been so successful that they now want to develop some downstream products from their aquatic processing of Pangasius. That technology exists in North America and Europe. Ernst: Do you participate in international programs for process development? Do you have collaboration in international activity on marine biotech? Does this need to be promoted and grown more? Mark: We use published information that is available from the international community. We can always use more free resources. If the fish resource itself is not next to our larger centers, we need the cooperation of international communities. Ilka: We participate in international programs to have contacts across the world. Often the questions, challenges or problems are very specific, but through collaboration, you will find diverse answers to these issues. Peter: We have a current project with an international partner from the US, and collaboration between partners in Norway and Scotland. Guy: We have consortiums with two or more research institutions and private partners. We have also exchanges on the CRBM business model with different organization worldwide. Part 4: Last comments from the audience and panelists; summarizing Ernst: So summarizing, what is the main bottleneck for a faster development of industrial biotechnology? The availability of bioresources, logistics, processing (use and knowledge of process technology, biotechnology – enzymes, microorganisms etc), producing the right products, markets? Guy: I think the availability of type and amount of data, linked to private companies and government information, is the real bottleneck. We need more info on raw materials, which should be free for distribution to allow the development of more efficient processing. Additionally, we need better collaboration to move forward rapidly. Jacqueline: There is a role for governments in facilitating the right environment for businesses to grow, in a responsible manner, in a sustainable way. This is fundamental to other OECD work we are doing on 133
  • commercialization of technology, talking to industry and looking at their issues, for all sectors not just marine biotechnology. Special thanks to Dr. Victoria Savoie-Swan, post-doctoral fellow in the Department of Biochemistry and Molecular Biology at Dalhousie University in Halifax for the note taking . 134
  • SESSION 6A: MARINE NATURAL PRODUCTS AND REGULATORY ISSUES Patricia Calado Development Director Bioalvo, Portugal Bioactive Discovery and Steve Dillingham General Manager GC Rieber Oils Inc., USA Scott Doughman CSO and CEO Source –Omega LLC. USA Anne Gaelle Grosdemange Quality Manager Polaris, France Janet Shay Chief Operating Cfficer Ascenta Health, Canada Key Take Away Message Regulatory compliance is necessary and desired in order to get marine natural products on the market. Regional differences are a hurdle for some sectors, mostly for nutraceuticals/dietary supplements/NHPs and cosmetics. International harmonization, as achieved for pharmaceutical development, is desirable but implies time and costs that these sectors can not afford. Pharmaceutical, nutraceutical and cosmetic products should be kept in different categories and subjected to distinct regulations, since only pharmaceuticals can be used to treat disease and, in accordance, should be subjected to more rigorous rules. Nevertheless, nutraceutical and cosmetic products claims are sometimes "borderline", as is the case of omega-3, which has proven health benefits and, despite not being a medicine, is in many cases prescribed and distributed in a clinical context. Finally, care should be taken so that regulatory compliance does not constitute a block for innovation but, instead, serves as a roadmap for the development of better, safer and more efficacious products. 135
  • Patricia opened the session by summarizing the different applications of marine natural products and inviting the panelists and the audience to debate the hottest topics concerning their regulatory aspects. The panelists briefly introduced themselves. Steve leads business, sales and marketing in North America for GC Rieber Oils, Inc., a marketer of VivoMega omega-3 concentrates manufactured by GC Rieber Oils AS in Norway. Scott founded Source-Omega in the USA. Their omega-3 products can be used as dietary supplements. He is investigating the role of DHA in fat transport. Anne is Quality Manager for Polaris (producer of nutritional lipids such as omega-3) in France. Her work applies to the areas of food supplements, pet food and cosmetics. Janet is also in the omega-3 field as COO at Ascenta Health Ltd in Canada. The company makes products for the retail market  and  is  a  Canadian  leader  in  the  field  offering  “no  taste,  no  smell”  fish  oil  in  liquid  format. I. Regulatory boundaries across application fields Patricia: We have cosmeceuticals and nutraceuticals not to mention pharmaceuticals. These are broad terms. She asked the panelists: What do you think about the separate categories? What is your feeling about these terms and their regulations? Steve: I am happy to be in the nutraceutical field and not in the pharmaceutical area. Personally, I am happy with nutraceuticals having discreet regulations. It is good to keep all producers honest. For omega-3, the bar is set higher for pharmaceutical clinical documentation but it is not so bad (bar is not as high) for its application as a nutraceutical. Scott: The best way to learn is in the structure / function relationship. Is it nutritional or a drug? Is it antiinflammatory? Anne: The cosmeceutical world is within the food administration. On the other hand, the regulations for pharmaceuticals are very different. She also noted that regulations change every day. Patricia: If the doctor tells you to take omega-3; is it a medicine or is it a nutraceutical? Anne: A medicine  is  used  to  “treat”  and  a  nutraceutical  is  used  for  “prevention”.    People who do not have access to fish should take a supplement. It is not the same reasoning for medicines. Janet: Small and medium enterprises in the nutraceutical field do not have the pool of money that pharmaceutical companies have access to. The rigor required for research involving pharmaceuticals that are used to treat diseases conditions is greater than for products used for prevention. In pharmaceuticals (drugs) – you get a prescription for a disease or condition that already exists. In Canada, nutraceuticals fall under Natural Health Products (NHP) regulations. I would not want to see the two (pharmaceuticals and nutraceuticals) regulated together. The degree of rigor varies. A natural health product in Canada needs to be pre-approved by NHP. The scrutiny and rigor for each natural product application is based on risk. If there is a high degree of risk, then more work needs to be done with NHP. Claims are completely different in pharmaceuticals compared to nutraceuticals. Steve: When   doctors   recommend   dietary   supplements,   the   product   often   falls   under   a   doctor’s   “brand”   name.   It   becomes more likely a pseudo drug. The lines become blurred because there are brand   names   such  as:   Doctor’s   best,   Doctor  recommended,  Doctor’s  choice…  which  implies  approved  by  a  doctor. 136
  • Scott: The branding issue goes along with dosage levels. The conflict occurs when there is overlap with claims for “outcome”  from  both  nutraceuticals and pharmaceuticals. Doctors are not trained in these areas. II. Regional differences in regulatory Patricia: How to you compare regulations in USA, Canada and Europe? Anne: The Europeans have the most, the highest degree of regulations. It is a very long process in Europe, especially for  “new”  products. Janet: My company does appreciate regulations. In Canada, NHP is a pre-approval process. The ingredients and final product are assessed. There is also a clinical trial review. Once the process is completed, it is then fairly easy to move the product to the USA. It is however more challenging to move the product to Europe. If the product is considered to be novel. Scott: I want to emphasize that  going  through  the  regulatory  process  “is”  access  to  the market. Regulatory compliance is the key. If you look at it as an obstacle, then it will be one. Steve: Our products are produced in Europe (Norway to be specific). The US is the regulatory body. With Proposition 65 in California, the regulations for environmental toxins (such as heavy metals) and cancer causing agents (such as pesticides) changed to a setting of much tighter limits. These strict regulations were eventually adopted by the entire US. One state affected all the rest. The FDA is currently adding new guidelines for importing food products into the US. Scott: In fact, new regulations now include more regulations by regulating the certifiers. Patricia: Do we need different labels? Nutraceuticals, pharmaceuticals, cosmeceuticals? In Europe for example, they cannot use animal testing for cosmetics. Anne: Within  Europe,  vegetable   extracts  are  “in   between”   nutraceuticals  and  pharmaceuticals.    You  have  European   regulations  but  then  you  also  have  the  French  regulations…they  can  conflict.    We  do  not  need  “worldwide”  regulations   added to all this. Janet: “Harmonization”   would   be   a   big   challenge.   - As an example of the difficulty of obtaining multi-country agreement on oversight she presented a simple example of difficulties experienced within one country and one manufacturing plant. For example, in Canada, the CFIA (one regulatory group) tells her she needs a sink in the plant. The  NHP  (a  second  regulatory  group)  on  the  other  hand  tells  her  she  cannot  have  a  sink  in  the  plant.  …How  can  we   have one oversight over the entire world? It is not feasible (though it might be a great idea). Scott: Regulatory certification builds trust. Audience – Russel Kerr (Nautilus Biosciences Canada): In personal care products, the public does not like the term “cosmeceutical”.    I wonder if there will be greater scrutiny. Is anyone preparing for increased regulations? Audience – Helena Vieira (BIOALVO): Asia and Canada do not care if you use animal testing. Pharmaceutical is tough though. Perhaps harmonization would be a good thing. Scott: The  only  “ceutical”  is  pharmaceutical. Janet: If we were to become harmonized, I would be happy. Unless we are mandated to do so, it is not going to happen. I wonder if we need 3rd party certification. If you are already regulated, then you probably do not need a 3rd party. 137
  • Anne: I am not against harmonization. I wonder – how do you choose which regulation is best? What are the associated costs? Steve: I love the   name   “cosmeceutical”   but I wonder if that takes anything away   from   “cosmetics”?   Same   with nutraceuticals. As far as harmonization: How much you should take of a certain ingredient is still a big question. Who is right? Whose science is right? Audience – Testing  is  a  “must”  for  pharmaceutical.    In  Europe,  the  ban on animal testing is a cultural one. Scott: We   still   do   not   know   “how   much   to   take”.     What   is   the   risk?     An   established   base   level   or   a   bottom   line   has   merit. How do we find out what a 60 year old requires compared to a 5 year old. III – Product claims Patricia: There are some product labels that have health claims. Consider omega-3 as an example – why do people take it? Janet: In Canada, claims are pre-approved for omega-3 by NHP: it is the standard procedure. The majority of the labels  state  “for  the  maintenance  of  good  health”. Anne: In Europe, you need scientific proof. For consumers, all products have the same benefits on the labels. Only 1% of consumers actually turn the box over to read everything on the label. Scott: Some claims must be disclaimed and that they should be scientifically challenged. This should be done on a case by case basis. He said not everyone takes omega-3 for the same reason. Patricia asked the audience – Who takes omega-3? How do you choose which product to buy? From the audience – John said that he takes omega-3. He looks at the labels, the bottles and he tastes it. He said that Alzheimer patients on the other hand are a totally different market. He said for himself as well as the public, they might read an article  in  a  magazine  that  would  make  them   buy  a  product.    He  said  “word   of  mouth”  also  works.    In  his   opinion, marketing is the key. Scott: For omega-3, indeed there are time proven health benefits. From the audience – “If  you   think   you   feel   better,   then   you feel   better”.     Nutraceuticals can take a long time to work, to have an effect. Who will conduct these long term studies? Steve: Consumers buy products based on anecdotal information. We need   to   find   out   what   is   the   “recommended”   amount to be taken (RDI)? From the audience – Don Douglas (National Research Council of Canada, IRAP). He stated that in his opinion, ONC (Ocean Nutrition Canada) did a lot of good things in the right way. He said that their MEG-3® symbol and branding “worked”. Janet: I agree that the MEG-3® approach was a good one but even in that case there is an opportunity for confusions because that MEG-3® symbol can appear on a finished product label on a bottle with half as much omega-3 per dose compared to another bottle on the shelf next to it because of dosing instructions provided by the finished product manufacturer. Scott: “What  to  eat”  and  “How  to  eat”  will  eventually  become  regulated.   138
  • Patricia: My personal feeling is that people take omega-3 because emotionally, they feel it is good for them. Regarding cosmetics: How do you choose? Is it the price? What are the active products in it? How does the consumer know? Is the claim scientifically correct? Anne: If the consumer does not see or feel a difference, he/she will not buy  it  again.  “Proof”  of  prevention  is  a  difficult   thing. Scott: Even if you have correlation between intake and level in the blood which causes a benefit, you might not necessarily  “feel”  it.     “Medical   food”   is  another   term.    The   problem  of   “deficiency”   may well be an issue but nobody is tested for it. Steve: The only way you will know if the product works is to go to your doctor to get tested before and after. IV – Future directions in regulatory Patricia: Will prevention and treatment remain separate? Scott: I think deficiency is a disease. Everybody eats differently. We do not know who is deficient. Public Health becomes the issue. Public Health addresses contaminants as well. Patricia: I like rules and regulations but at the same time, if you are trying to sell your new product in the US and it is approved - but   because  it  is  “new”,  the   answer   to  sell  it  in  Europe  is  “no” : Is regulation in itself blocking innovation? Janet: Yes. For novel products, approval takes a long time. The regulation process is an impediment but however, the alternative (unsafe products sold in the 1950s and 1960s) is not acceptable. As far as regulations are concerned: You need to live with it. Anne: I totally agree: No rules, no market. Scott: As far as reducing risks by using 3rd party testing - the perception out there is that it is better. Steve: Regulation stimulates innovation. Regulation is a positive thing. Special thanks to Patricia LeBlanc,  Natural  Products  Chemist  with  Canada’s  National  Research  Council for the note taking . 139
  • SESSION 6B: OPPORTUNITIES IN AQUACULTURE HEALTH TECHNOLOGY Rory Francis Executive Director PEI BioAlliance, Canada Pierre Blier John Buchanan Jason Cleaversmith Odd Magne Rødseth Université du Quebec à Rimouski, Canada Centre for Aquaculture Technologies Canada (CATC) Head of Aqua Health Chief Executive Officer Aqua Gen AS, Norway PEI Novartis Animal Health Inc., Canada Key Session Take Away Aquaculture is the world's fastest growing food production source. Over 70% of the cost of aquaculture-based fish production is in fish nutrition and health maintenance. New research and technologies are continuously improving the yield, quality, and other attributes of the aquaculture product while reducing costs and environmental footprint. Panel members emphasized the exiting opportunities being pursued in increasing the role of diagnostics in monitoring the health status of the fish, the application of genomics tools, including genetic engineering, to brood stock improvement, the improvements in efficacy and scope from disease prevention vaccines, and integrated health management approaches. Caution was expressed regarding the intensification of production units and the consequences to fish health and quality. Introduction Rory Francis: Aquaculture is the world's fastest growing source of food production. For this reason, ensuring we place a premium on preserving a flourishing and healthy approach is of critical importance. What focus needs to be 140
  • taken to support farmed fish health? What can be done to encourage the development of new medicines, practices and approaches? And can we do more to ensure appropriate budgets for animal health research? An important aspect of aquaculture is that 70% of cost to produce fish is in feed in health management. Today we will focus on health management, the cost it imposes to fish production and where the opportunities lie to mitigate this cost. The panelists have extensive experience and expertise in areas such as: fish health, fish physiology, genomics, fish product development and in building academic/industry partnerships to bring new products to market. Panelist Introductions Pierre Blier- Université du Québec a Rimouski, Canada: Pierre is a professor at the University du Quebec (Rimouski) in the Department of Biology. He is involved with Ocean Nutrisciences, a company that focuses on the extraction of high value biomolecules from marine sources, including waste from the shrimp industry, that are of interest for fish nutrition. His academic research interests are in fish biochemistry, physiology and metabolism. This encompasses research into the function of mitochondria in fish, ectotherms and other marine organisms as well as importance of mitochondrial functions or dysfunctions on aging process. Finding a link between these research areas and  industry  is  not  always  easy  but  it  is  possible.  Pierre’s  focus  will  be  on: Fish health instead of fish disease What is a healthy fish and how to keep it as healthy as possible? Is there any good biochemical markers that could properly monitor health status of fish? 100 years of fish production and genetic selection for growth and domestication traits has pushed fish to the edge of their metabolic comfort range and increased their susceptibility to different type of stress which usually lead to amplification of oxidative stress. High oxidative stress usually reflects impairment of fish health and Pierre will discuss how this should be considered in modern fish production. John Buchanan- Centre for Aquaculture Technologies Canada (CATC): CATC is involved with genetics and selective breeding programs in fish, as well as the evaluation of fish nutrition products for fish health. His former focus at the company has been on transgenic salmon technologies and government regulations in the USA and Canada. Before joining CATC John was at the medical school of the University of California San Diego studying bacterial virulence factors. Before this he was focused on oyster health research. CATC is expanding their research capacity in PEI Canada, and building contract research facilities. CATC believes thereis a shortage of qualified, experienced aquatic GLP compliant labs in the world High quality aquatic GLP labs are necessary to meet fish health regulations and acquire health approvals in USA, Canada, Europe, and elsewhere in the world. Jason Cleaversmith- Head of Aqua Health, PEI Novartis Animal Health Inc., Victoria, PEI, Canada: Graduating with a marine geochemistry PhD from Edinburgh University and subsequently an Executive MBA from Glasgow university he has worked for the Scottish Association of Marine Science, running their commercial subsidiary and knowledge transfer activities (which had a strong focus on Aquaculture and the environmental impacts of fish farming).     Thereafter   joining   a   marine   biotechnology   company   who   specialised   in   extracting   the   value   from   ‘blue   biotechnology’  across  the  nutri,  cosme  and  pharmaceutical  sectors..    More  recently  Jason  was  the  senior  investment officer for Innovation PEI where he led the development of the bioscience sector for the province of PEI and currently is the Head of Aqua Health, PEI for Novartis Animal Health. Novartis Aqua Health, PEI conducts both R&D and manufacturing activities in addition to hosting the commercial headquarters for its N. American sales force. 141
  • Odd Magne Rødseth- Chairman of the Board at Vaxxinova AS, Chairman of the Board at Aqua Gen AS and Group Director, Aquaculture at EW Group Gmbh Originally from Aqua Gen but is now Group Director Aquaculture in the German parent firm EW Group. EW Group is made up of 65 companies in 25 countries, with 7000 employees and (USD)$1.9 billion in annual revenue. The aquaculture division in EW group is focused on breeding, pharmaceuticals, feed additives and nutrition. EW Groups began their foray into aquaculture in 2007. Magne began his interest in aquaculture as a fish farmer in 1980s. Two years later he returned to University of Bergen to study and then spent 8 years as a scientist focussing on fish diseases and vaccine research. Magne was director of the aquaculture R&D department of Intervet Norbio (now Merck) for 10 years. The 1990s was a very exciting time for fish vaccines, reaching the second generation of fish vaccines. New vaccines were developed and introduced to the market to prevent diseases caused by pathogenic viruses and employing new recombinant and adjuvants technologies. However, we are still stuck in the oil and water notion of adjuvants because they are effective for a relatively long period with high efficacy. In the 1990s, it was easier to get through the regulatory jungle within a reasonable timeframe and at reasonable cost. Aqua Gen is actively involved in fish genetics and leads the industry on quantitative genetics and is gradually bringing in molecular genetics. They are currently learning from the poultry side of company in this regard. Their current focus is on host- pathogen relationships with regard to management measures and products that contribute to disease resistance, stress tolerance and domestication. Rory Francis: The aquaculture industry (66 million tonnes/ annum) just surpassed beef production (63 million tonnes) as a global source of animal protein. And farmed fish consumption is expected to exceed wild fish consumption in 2013 for the first time. These are historically very significant events. Still, aquaculture looks much different in terms of sophistication of the industry, care and attention and even understanding of basic health requirements for aquaculture, depending on what country and what region we are observing. What are the biggest healths concerns facing the commercial aquaculture industry globally? Odd Magne Rødseth: List of diseases includes different virus, bacteria and parasitic diseases. However it makes no sense to list common diseases because disease come and go. If we try to dig beneath these specific diseases I believe we find some more general patterns of concerns: 1. Increased intensification of industry. a. Examples: Collapses in the Shrimp industry in Asia, Salmon industry in Chile. b. Moving beyond the carrying capacity of the system can cause it to collapse. c. Especially important in open systems where there is lots of non-controllable variation. d. If we continuously push intensification then we create a situation where disease occurs. 2. New management practices. a. Industry needs to generate new measures, tools and knowledge to reduce risk of disease. b. Problem is that the industry often uses new measures to justify increased intensification. c. Biggest management issue in open system is biosecurity. 3. Radical change of diets. a. Fish have developed as carnivores for >100,00 years and we try to change them to vegetarians in 10-15 years. b. Malnutrition can be an important health issue. 142
  • c. d. Predisposing factor for infectious disease. Diluting essential feed ingredients like fish oils will be a major fish health issue. Jason Cleaversmith: Good points Magne. The industry has undergone a dramatic transformation in past decades, with a standard of professionalization that would be the envy of many industries. There are many geographic peculiarities with regards to the occurrence and nature of aquatic disease which makes it very challenging for companies to efficiently respond and tailor products for individual markets, given the price pressures that exist within the sector. Other challenges for the sector include the wild / farmed fish debate, however the sector continues to make great strides, and takes sustainability extremely seriously.? The health concerns of the industry relate to the emergence and sporadic nature of emerging diseases, where it is sometimes difficult to culture the causative agent or understand the relevant trigger points. Intensification, dietary drift and changes in temperature and salinity all have a role to play in effecting fish health and their ability to response to disease. Rory Francis: What is a healthy fish? How can we prevent disease? Is it a management issue? In the bovine industry the major method for controlling disease is proper management practices. What is oxidative stress and can science provide tools to farm managers to measure intensification? What are the tools that can be used by management to get in front of disease? Pierre Blier: I want to start by   adding   to   Magne’s   comments.   There   is   a   clear   challenge   to   change   nutrition   of   fish   from carnivores to vegetarians. In particular changing fish oil or proteins to other source from vegetables. This is a challenge for producers and formulations scientists. It induces physiological stress in fish such as an inflammatory response of digestive system or inflammation of other tissues and these responses are directly related to oxidative status or oxidative stress of tissues. Both the environment and nutrition have an effect on fish, or other organisms, to generate oxidative stress on the system. Mammalian and avian research has shown that deregulation of oxidation stress and mitochondrial dysfunction are clearly related to susceptibility to infections disease. Organizations and industry have selected fish for high growth rates and these fish are known to be more susceptible to disregulation of oxidative stress. Simple, new biochemical tools can measure the result of oxidative stress as accumulation of different stress molecules over time. Change in lipid metabolites of long chain fatty acids associated to peroxidation. Accumulation of carbonylated protein, which is a good marker of long term stress. Biomarkers are easy to monitor and measure. My suggestions are to look at these earlier and give you information on the overall health status of fish and animal due to environmental and nutrition changes. It is possible to select fish, or groups of broodstock, to minimize their overexpression of the oxidative stress response. Tools at the biochemical level will complement upcoming molecular tools. Rory Francis: Are biochemical and molecular tools being used to monitor oxidative stress? What is a proactive day-to-day test for fish farm managers to monitor their fish to ensure health status? What tools do we have in the global toolbox to provide a high quality, reasonably priced product to consumers? Which do you believe are going to provide the industry the biggest return on investment? What are the tools in pipeline to manage disease and are they a low enough cost for farmers to remain competitive? 143
  • John Buchanan: There has been a recent focus on disease management solutions. Vaccines are a clear success in North America and Norway. Vaccines are remarkably efficacious for known pathogens. The issue is determining the disease agent and then generating a vaccine. On pharmaceutical side there is less use in industry today except for sea lice but even that is of limited use. There is no solution for shrimp diseases and disease has dire economic implications for the shrimp industry. The shrimp industry could be very lucrative because there are no vaccines or pharmaceutical agents that are effective, whereas salmon industry has been very effective at generating successful vaccines. We need effective husbandry practices and genetic breeding programs to develop a healthier, more robust fish. Intensification changes disease ecosystems and drives diseases. The solution might be to try to change the ecosystem and biota with probiotics. Rory Francis: What about prebiotics and active feed alternates? John Buchanan: There is active academic research on pre- and probiotics and feed additives. The results are promising and there is potential for the near future. Odd Magne Rødseth: Fish vaccines are a great success-story if you limit the story to salmon in seawater and bacterial disease. This has reduced the use of antibiotics in the salmonide industry to nearly zero. Unfortunately, the situation is not as positive for same of other species. Viral diseases are still a struggle. The reason: Atlantic salmon has a perfect life-cycle for large-scale vaccination. The mother put energy into eggs which start initially without feed. Larvae stay in controllable fresh water and the farmer is able to control immunity and vaccinate at this time. This is great. Then you can transfer the fish in the marine environment and they already have acquired immunity against the most many of the marine pathogenic bacteria. Viral disease in the poultry and pig industry has been effectively controlled with viral vaccines because they have access to others techniques like recombinant-live and attenuated vaccines. This is the only type of vaccination that works to induce immunity to intracellular viral pathogens. The biggest challenge is to be allowed to use same technology in the fish farming sector. Jason Cleaversmith: Allowed is key word. This is a turbulent time to get new technology adopted in certain countries. Some viral products work well but can be restricted due to the regulatory environment. Transfer of technology from Human Health to animal health and into aquatic health is sometimes difficult and the ability of companies to make large investments in Aqua is limited when compared with the market opportunity in human health. There is a genuine desire within companies to push/promote new technologies but regulatory acceptability within specific markets can be hugely challenging (& expensive in terms of time and money) at times. The industry expects new product iterations and developments on a 2-3 year timeline which is extremely difficult if a new technology platform is proposed. Rory Francis: No silver bullet but what about genetics? There seems to be good nutritional management practices and salmonids respond well to vaccination. Genetics also have important role. Not a lot of genetics and trait improvement in many aquaculture species except salmon. What role will improved genetics (GM or nonGM) play in the future in terms of disease prevention and product quality? Where can the genetics world take us in fish resistance to disease? Odd Magne Rødseth: 10-15 years ago all breeding was targeting productivity traits like meat quality, feed conversion and growth. Disease resistance selection based on phenotype is very hard because you need infections trials. Aqua Gen has 800 families and would need to challenge 80,000 animals for one disease in one year class. This is very expensive and to challenge 80,000 fish is an animal welfare issue. 144
  • The dream is to select, not on indirect on phenotype, but direct on genotype. This means finding a correlation between genotype and markers for disease resistance. This has been tried in poultry and pig sectors but this has been very hard. Disease resistance seems to be controlled by lots of genes and is very quantitative. Marker-assisted selections more or less academic until people look at salmonid genes. Some salmon genes associated with viral disease have been found. One set of markers could explain more that 80% of the genetic variation associated with resistance towards IPN, one of the most frequent and devastating viral disease in salmon farming. Salmon is-virgin species, only 10-11salmon generations old and there are still a lot of genes to be found. GMO is an important discussion. Within the field of molecular genetics or gentechnology there are lots of technologies   that   work   and   don’t   end   up   as   GMO.  Genomic   selection   is   on   way   in   and   will   make   major   contribution   to   disease resistance. Rory  Francis:  John’s  company  works  on  GMO  and non-GMO aquatic species. What is the sense in the aquaculture community with regards to providing resources to support this big effort? Is there an essential public funding component to drive this, or is it up to private industry to support genetic advancements? John Buchanan: A little of everything in terms of support. Government consortia in Canada, Chile and Norway have been very valuable in genetics and breeding as they have enabled valuable partnerships between academia and industry. Companies have moved forward with breeding programs and breeding genetics. A Norwegian company has developed a high density SNP chip for salmonids for example, and eggs from breeding companies with selectively bred lines are distributed around the world. High breeding tech tools require phenotypic data to correlate with genetics and validate the molecular tools; this is a key. You can use QTL to look at phenotypes such as disease. This makes for better fish that are easier to bring into production. Using technology to improve breeding success has worked well in salmon. The infrastructure is not there yet for sea bream and shrimp and this leads to complicated questions. Salmon is a good starting point and the technology can then be transferred to other fish. Poultry and beef industries can be very valuable resources through breeding technology and knowledge transfer. I am a believer in transgenic solutions as well for these disease and growth problems in the industry. Both breeding and gene engineering will be important tools in the future. High performance fish, can be achieved with knock- out and knock-in genes. Rory Francis: Economics question: aquaculture products are a small part of Novartis business value relative to human health. Is capital being made available across the industry within companies to respond to aquaculture disease and health issues? Is the opportunity big enough? Jason Cleaversmith: You  can  look  at  the  marketplace   to  get  an  answer,  there’s  been  a  lot  of  consolidation  through   company acquisition and private equity interests coming into the sector. This tells us that there are strong fundamentals to the salmon Aquaculture sector. These fundamentals will continue to grow strongly and there will be additional interest in peripheral areas to form a larger core offering. The aquaculture industry is quite cyclical in nature and consolidation often brings greater pricing stability which is important for the sector. Different regions have quite different disease profiles (Chile Vs Norway for example). In Norway where investment from companies is strong and management practices cutting edge then the propensity for disease proliferation is lower. Conversely a lack of investment can place severe limitations on the growth and success of the sector.. Diagnostics for sea lice therapeutic resistance and early disease detection tools make it easier to treat across the herd than ever before. Asian cost bases prevents effective vaccine disease prevention in this part of the world and tools like pre and probiotics will probably have a dominant role to play in this region as they are much cheaper. The opportunity for growth can be hindered in some regions due to geopolitics and regulation, for example it is increasingly difficult to get new licences in British Columbia, Canada. Chile has management practice challenges 145
  • although  consolidated   ‘watershed/bay’  approaches  are   helping  a  lot.      An  area   of  some   opportunity  relates  to   big  data   in aquaculture, whereby a number of players have considerable datasets that will help inform best practice, efficacy, epidemiological approaches and management practices in the coming decade Pr Simon Davis, Plymouth University, UK from the audience: I am interested in all of your recommendations. Production diseases are related to, and caused by, oxidative stress. We need to look at oxidative stressors related to nutrient changes and supplementation. Fish nutrition research is important to relate directly to fish health. Selenium is very important for salmonids. We need to redefine trace elements in fish. Wild salmon have higher selenium (organic) than farm raised fish. It is cheaper to use inorganic selenium in the industry. How do we get this across to regulators: we need to be able to introduce more trace minerals and new feed additives quickly. Pierre Blier: There is a clear change of paradigm with selenium changes in nutrition and oxidative stress. Selenium is very important in salmonids. People who regulate fish feed are not aware of this issue. Rory Francis asked Simon Davis: What is/are the barrier(s)? Simon Davies: The   need   for   organic   bound   selenium   use   by   a   company   just   isn’t   getting   across   to   regulators.   The   scientific results are overwhelmingly positive. 120 enzymes are selenium-dependent. This has been presented to AFEC   and   we   can’t   make progression at all for selenium. Chromium metabolism and related to carbohydrate metabolism  is  also  very  important.  Carp  relate  well  to  chromium  and  it  is  used  extensively  in  Asia  but  we  can’t  do  in   the EU. Jason Cleaversmith: As   an   anecdote,   we’ve   seen in the companion animal sector a huge growth in premium pet foods,  with  increasing  content  of  ‘quality’  protein  as  a  USP.    There  may  be  a  time  when  ‘even  healthier’  salmon  become   a reality, by virtue of their enhanced diet. Odd Magne Rødseth: I would like to go back to the vaccine issue. I am not a nutritional person although I recognize the importance for balanced feed. Vaccination and intensive production needs good vaccines. Limiting factors like vaccine availability raise two major questions: Is market big enough to justify bringing a solution to market? This is a general problem from animals to humans, can we justify the expenditure to bring a product to market. There are two things in the market that are driving price reduction: o Fewer and fewer products o Regulations that make it harder and harder to bring in vaccine to market. Is vaccine desirable and capable of helping and will it result in disease resistance? As far as desirable, companies and government once tried to eradicate diseases. This is almost impossible, especially in an open aquatic environment unless there is very early detection. We must find other ways to combat disease. From the audience: We need very small list of health biomarkers to measure. The literature has is very long list of potential   health   biomarkers.   Is   the   fish   healthy?   Are   they   stressed?   Do   we   need   a   booster   does   or   two   of   today’s   vaccines because there is only one real chance to give it? The fish are in the water for 15-18  months  and  we  don’t  treat   them. Jason Cleaversmith: Duration of immunity for vaccines is an important area for research, as is the use of adjuvants. These are evolving and the industry is looking at different ways to approach these relatively long residences at sea and as a sector. we want to confer resistance for as long as possible. There have been significant advances in technology  and  DoI  will  be  an  important  ‘battleground’  for  companies  over  the  next  decade 146
  • The classic question as to whether fish production companies want a vaccine for a disease? Almost always ends up with  a   ‘Yes’,   but   then   if   you  ask   whether   they  are   willing   to   pay  for   it?   Sometimes   the   answer   can   be   very  different.   It   takes an awful lot of investment to conduct vaccine research and development, with significant investments in base capability, trials and the regulatory pathway, and diseases can also wax and wane so picking your focus areas is critically important Darren Parris- International Aquafeed Magazine: 80% of all investment in health going into 2% of fish production: salmon. Will what we are discussing relate to feeding nine billion people by 2050? Are you working on techniques to help people get to this feeding goal? Odd Magne Rødseth: I think you are wrong. The salmon industry is most profitable aquaculture sector and it is the driver for development and implementation of new technology. No other fish sector has money to drive new technology. The salmon industry drives proof-of-concept and technologies which can then be conformed to other species. Once proven in salmonids, it can be transferred in a more cost-effective way to other species. John Buchanan: Alternative species are also important. There are breeding programs for shrimp and a lot of new work in genetics. There is a good salmon example framework in place to move to other species to increase productivity. Jason Cleaversmith: We have started to see the adoption of technologies from other sectors, like e-health, and we are seeing the benefits of this in our sector. Most likely new technology will be pioneered in the salmon sector, due to the $/kg but ultimately we will see these benefits migrating to other species over time Craig Brody- Novus: There is a potential for increasing health in ways other than feed and vaccines. Husbandry is important for health. Nutrition is also important. Five years ago we were trying to improve health through nutrition and feed and how else you can deliver additives through feed for low cost species? We are actively developing models and conducting animal challenges. We have research in Vietnam with the species that they grow including tilapia and pangasius. The next step is to find tools to watch up and down regulation of biomarkers in proof-of-concept studies. Once we have this, then you can see what works the way you want. An example is organic acids for Vibrios in shrimp. First see white feces disease and then apply. Prebiotics are also very promising. More vegetarian fish diets have caused more inflammation in the gut. We can add prebiotics to help. We can create inflammation with different vegetarian sources and then prove that you can do something about it. Pierre Blier: I would like to comment on the short list of health biomarkers. There are some short lists of good biomarkers but it is hard to know which the best are. Oxidative stress biomarkers come from research in the biomedical area. I am working with the Montreal Health Institute where we use one biomarker, a metabolite of long chain fatty acids oxydation, which is clearly associated to development of atherosclerosis. New biomarkers are already there but we have to validate them for fish industry and for their ease of use on site. Rory Francis: Are regulators in different countries asking for different things? Are there significant costs of moving new products to new markets? Jason Cleaversmith: We are relatively restricted to a small number of salmon farming geographies. Typically the Faroes, Chile, Canada, UK and Norway. We see different responses from different jurisdictions allied with their own regulatory environment and specific regulations. It is important to maintain a strong and healthy relationship with our regulatory gatekeepers and to pay attention to the quality of documentation submitted, along with working with them to ensure key questions are addressed in a timely manner. The industry has thus far risen to increasing regulatory requirements found within the sector with Norway being viewed as the gold standard in Aquaculture regulations. Novartis benefits from having in-country RA managers who work with the agencies to overcome and resolve any issues or challenges that might occur. 147
  • Rory Francis: There are large and comprehensive datasets that are required for regulator acceptance for use in a particular species? Can you use the product off label? Can you transfer the data to another species? John Buchanan: Highly regional as how they allow it and some areas are highly regulated. Hard to bring new products into Canada even though they are efficacious in other countries. You are required to do trials in Canada. In China, the complete regulatory datasets must be repeated and regenerated in China. There is a movement in the direction of countries who trust regulations in other countries and this helps make it quicker to approve new products. Off label use can be prescribed by veterinarians and then they take complete responsibility. A company can’t  do  that.  It  is  hard  to  go  through  and  prove  that  it  is  effective  for  off  label  use. Rory Francis: Where do you see big advances for maintaining health at a reasonable cost? Where are real opportunities to advance industry and health technologies? Where do you see this investment? Pierre Blier: There is a lot of development at the molecular biology and genetic level and what we can do in relation to screening. The advance is amazing from five years ago. I can have sequence a mitochondrial genome for $100 now, whereas it cost me $5000 ten years ago. These are amazing developments that can be used to make new drugs and diagnostic tools. At the biochemistry level the tools are easy. The problem is it is hard to find technologie for highthroughput assays for biomarkers even if biomarkers are cheap to use. Good diagnostic tools can assist molecular technology to develop new tools. We need to mix paradigms and work to define healthy and disease resistant fish through proper diagnostic tool for general health as well as developing efficient curing strategies and medications. By analogy I need a good clinician and adequate drugs for when I am sick but it is otherwise very important to try to stay healthy by maintaining good life habits (for example exercising) and good nutrition. It is therefore important to have good physiological or biochemical indicators to indicate if my life habits and nutrition allow me to maintain an overall healthy physiological condition. Investigations into novel nutrients, or new commercial strain of salmon is progressing at the academic level. Perhaps we need to start over and reset metabolic status of populations before selection for growth performance. We need new fish that are less sensitive to oxidative stress. There are a lot of opportunities but we need obviously more money. There are actually more people available to do the research than money to let them do the work. This is a political problem rather than a scientific problem. John Buchanan: We need a reliable method for oral delivery of drugs and vaccines. This would open up shrimp market for helping with their disease issues. We need more understanding of genetic engineering and then bringing it to bear. We need to reduce stress or disease susceptibility and alter nutrients to have a real benefit and be able to push  forward.  We  need  more  money  for  research.  Funding  for  oral  delivery  from  creative  academics,  or  a  company’s   skunk works. Genetic technology can also play a big role. If AquaBounty receives approval for their GM salmon, many others will get involved in genetic engineering solutions. Jason Cleaversmith: I like the advances being made in diagnostics and herd health management which can bring a lot to this sector. We constantly need to evolve our management practices in order to drive towards greater sustainability within the sector.Enhanced genetics will most likely have an important impact on the industry (such as Aqua Gen). We also need to work hard to respond in a timely manner to emerging diseases, in a manner that is acceptable to the customer? Odd Magne Rødseth: Try to define in simplistic terms what is success to fish farming value chain: Bring as many fish to market size in shortest time to consumer satisfaction. The fundaments are: survival and growth. Price, quality and food safety, sustainability, GLP food practices are all getting more important and complicated. 148
  • We need to open the modern biotech toolbox to further develop the industry Growth and survival will also in the future be the engine in the industry, and vaccine, genetics and new feed resources can offer a lot. New pharmaceuticals and technology platforms are emerging and are starting to develop complementary products. Sequence information will bring more predictability in growth and survivability. Rory Francis: Thank you all for attending and participating. That is all for time. Thank you to the panelists for their excellent and informative commentary on where issues are and what advancements and opportunities lay ahead. Special thanks to Fraser Clark, Postdoctoral Fellow in the Department of Biomedical Sciences and a Research Scientist at the AVC Lobster Science Centre at the University of Prince Edward Island for the note taking . 149
  • SESSION 6C: ALGAE SELECTIVE BREEDING AND GENETIC MANAGEMENT / MANIPULATION Dr Pia Winberg Director Shoalhaven Marine & Freshwater Centre, University of Wollongong, Australia Dr Claudia Baule Coordinator National Biotechnology Program, Mozambique Dr Rui Pereira Managing Director CEO Algaplus, Portugal Dr Philippe Potin Idealg Project Coordinator Roscoff Marine Station, France Dr Nicholas Robinson Senior Scientist Breeding and Genetics Unit, Nofima , Norway Key Take Away Message: 1) For a global crop with high nutritional and sustainability values, seaweed genetic resources are poorly understood, let alone managed. 2) Genetic improvement programs have resulted in large economic and social benefits for livestock, plant and fish industries 3) A lack of management of genetic diversity early on in the establishment of seaweed production has resulted in crops that are highly vulnerable and suffer from disease 4) Genetic management of a crop industry is better placed to consider selective breeding approaches for many traits that are controlled by many genes, rather than genetic manipulation approaches. Indeed a GMO biomass will compromise market opportunities. 5) Losing genetic variability will render seaweed industries vulnerable to climate change and inbreeding depression, and will reduce opportunities for improving product and developing new markets. 6) There is a need for the recognition of seaweeds as a serious crop in the west and a need for well planned genetic improvement programs internationally. Seaweeds and microalgae have entered the age of functional genomics. Selective breeding programs (for seaweeds) and gene transformation programs (for microalgae and seaweeds) have been successfully used to improve the productivity and quality of these organisms in culture. In some cases, genetic transformation and 150
  • synthetic biology techniques are currently being employed to develop "designer" strains of algae that behave in a predictable manner during commercial cultivation or produce fit-for-purpose specialty fuels and chemicals, or higher value molecules including human therapeutics. The potential for genetic improvement to increase the value of the production of such molecules and other economically important traits is likely to be high as procedures for the cultivation of many algae species are well established, genetic diversity is often high, sexual propagation is often possible for seaweeds, and all types of algae generally have a short generation time that allows rapid transition from one selected generation to the next. A well-designed genetic improvement program, which targets one or a few select economically valuable traits whilst limiting inbreeding, could provide potentially large benefits for industries reliant on the culture of algae. Dr. Pia Winberg - Australia. My interest is in the sustainable cultivation of seaweed crops from marine environments. This morning we discussed the option for a sophisticated seaweed industry through biorefinery approaches; while this afternoon we seek sophistication in relation to genetics. The panel represents different perspectives. Seaweed is a global crop and most global crops have good genetic work behind them, but seaweed is lacking in this area. Not managing your genetic resource can have disastrous outcomes for the long term viability of an industry. Also future options for higher value products can be achieved with the genes that drive quality traits. Good genetic management of salmon has been critical to that industry. While genetic bottlenecks have been felt in some parts of the world and have lead to some socioeconomic situations with global implications to these industries collapsing. Many biologists are not geneticists, and collaboration is needed in order to control life histories and production, as well as geneticists who can respond to and manage to important traits. Claudia Baule – Before going into my introduction I want to thank the organizers for bringing me from Africa to participate in the good exchange going on at BioMarine and share the plans we have from the understanding of the great potential that is in marine biotechnology to drive economic development. I am the coordinator of the national biotechnology program in Mozambique. I am not a seaweed specialist but a molecular virologist with experience in the genetic characterization of pathogens, pathogenicity and virulence markers, use of reverse genetics systems to study mechanisms of infections, and in development of vaccines and diagnostic tests. It is with this background that I contribute to the session. As a Mozambican scientist recruited for the biotechnology program, marine biotechnology is a big and important component of this program especially due to the large marine environment of Mozambique that is diversified and rather unknown. One of the aims of this networking opportunity at BioMarine is to establish connections internationally with research, business, innovation and financial institutions and organizations for the implementation of the biotechnology program. Marine biotechnology is an important component of this program, and it includes the development on a bio-industry based on algae, therefore my interest in this session. Rui Pereira – Until last year my professional life was as seaweed researcher with PhD and post-doc researchers working with Porphyra. I then started working in integrated aquaculture with a focus on seaweed aquaculture as a component of larger aquaculture. I now represent Algaplus, a new company based in Portugal and dedicated to the production and trade of seaweed and seaweed products, produced from a system of multi-trophic aquaculture. We focus on several species of seaweeds for human food consumption in our production, and the intent is to start producing extracts and nutraceuticals and cosmetics from the seaweeds in the next 5 years. We are targeting a European supply of high quality seaweed material for nutraceuticals and personal care. We need to differentiate ourselves as seaweed aquaculture is not that new, and Asia is producing larger biomass of a limited number of species. Our point of difference is to use research and knowledge to work with different species with different targets for nutraceutical and cosmetic products. Genetic breeding and management will have a significant role in the development. Philippe Potin – I have been a researcher at French NRC with a focus to relate basic research to private companies. During my career I have been involved in different areas of seaweed biology and seaweed extracts. I am a phycologist by training and developed a research plan with Chile in relation to diseases that caused large declines in seaweed populations. Other projects were similar in southeast Asia. There is a lot of interest in improving seaweed production, 151
  • and the genetic links to diseases which should be based in the good understanding of traits and mechanisms. During the last two years I have been involved in the launch in an ambitious French national ten year project. This project involves a large number of researchers and 5 companies to develop seaweed production, and to progress seaweed genomics. The project is based on our previous work to develop the genomics of seaweed species, including the first two complete genomes for brown and red seaweeds published in 2010 and 2013, respectively, and we have invested a lot of efforts into seaweed post-genomics in order to develop the use of this work in mariculture and seaweed biotechnology. We have different activities in this project but seaweed genomics is a priority with geneticists, chemists, bioinformatics and mathematicians we will develop a lot of basic knowledge of relevance to other countries and organizations. Nicholas Robinson – I work for Nofima, the Norwegian Institute of Food Fisheries and Aquaculture research which has played a leading international role in research and development of selective breeding programs for fish. We pioneered the development of the Norwegian Atlantic salmon breeding program in the 1970s. About 99% of the Norwegian salmon industry uses genetically improved fish. Nofima was also involved in helping develop the Genetically Improved Farmed Tilapia strain (GIFT tilapia) in the Philippines, now grown throughout Asia and South America. We also have some involvement with shrimp and carp species. Our research involves the development of new methods for selectively improving complex traits, limiting inbreeding, and developing and looking at ways of supplying new technologies into breeding programs. Our goal is to produce more effective and profitable aquaculture industries. I was a former leader of the Breeding and Genetics Unit in Norway, and now am a research scientist in Australia, establishing genetic breeding programs for new species. I have collaborated with Pia who urged me to consider the genetic issues in the algae area. Last year we wrote a review article in a phycology journal and found very little published in the literature on seaweeds and genetic management. Introduction: Despite huge quantities of cultivated seaweed biomass production that is on par with that of mollusc culture and well exceeding that of fish aquaculture, seaweed production has been very slow to adopt significant genetic management strategies for its species and strains. This might in part lie in the low commodity value for some of the biomass which is primarily cultivated in developing nations for industrial hydrocolloids. However the bulk of cultivated biomass is for food and as such should be considered as a valuable candidate for investment in selective breeding technology, as for any other important food crop or animals species. Not least of all considering the potential scale of production into the future to address food and nutritional security. This forum will review the concepts of selective breeding and genetic management strategies, as there has been a focus on narrow approaches including genetic manipulation. However a reflection on the contribution of more diverse genetic management and selective breeding approaches is called for. Key questions: - What is the suite of tools for genetic management? What has good genetic management delivered to other industries (e.g. aquaculture species such as salmon or land crops such as corn and rice; for producers, for manufacturing, for consumers) - What is the status of selective breeding and genetic management in seaweeds - What are the challenges of selective breeding approaches for seaweeds? - What are the risks  if  we  don’t  adopt  a  more  sophisticated  approach  to  seaweed  genetic  management? 152
  • Dr. Pia Winberg – We will explore the whole chain from genetics to market product to establish up front what we are  talking  about  with  genetic  management  and  it’s  value.  There is quite a difference between genetic management and, for example, GMOs, Nick can you establish what we are talking about? Nicholas Robinson – Mainly   I’ll   talk   about   my   experience   with   selective   breeding   and   techniques   that   can   be   applied   to seaweed. Most traits that people are interested in (eg. growth rate, disease resistance, feed conversion efficiency) are controlled by multiple genes, it is rare that they are controlled by only one gene. In seaweed we may be interested in a particular bioactive molecule that is difficult or expensive to quantify. If there is a trait that positively correlates to the level of that molecule of interest ( eg. growth rate, or blade area) we can indirectly increase the production of our bioactive molecule by selecting for increased growth rate or blade area. The first thing to determine for the genetic program is what is the goal of the genetic breeding program, then what are the traits that will have the best economic impact on that goal. How to best implement the breeding program and get the benefits flowing to producers. Selective breeding is simply a way of speeding up natural selection, in a way that targets specific traits of interest. There is a need to guard against inbreeding and decreases in genetic variability. In order to make the strain robust to future stresses in the grow out environment (eg. disease outbreaks) the breeding population requires broad genetic variability. You can make use of new genomic technologies by applying these technologies to assist selection decisions in your breeding program. The breeding is performed on a single closed population, once established you don’t  introduce  any   new  genetic  diversity  into  this   managed   population,  you  close   the  population  and  breed  within  in   it. This is done so that there is no dilution of the genetic improvement that is made. In the past, the practice for seaweeds has been to produce inbred lines, to cross plants from the different lines and choose the best performing hybrids. However, once you have established which are the best hybrid combinations to use, you can make no further genetic progress. If we were to apply selective breeding to seaweed we could get continuous genetic improvement, each generation building on the improvements made in the previous generation, like climbing a ladder. This is the method  used  for  fish,  livestock  and  many  plants.  By  using  genetic  modification  it  is  possible  to  add  genes  that  aren’t   naturally found in your species, but that opens up questions of whether GMOs will be accepted by consumers and whether GMOs should be allowed to in the natural ocean environment. Also, if you start with a few genetically modified plants, you wont be able to capture the broad genetic variation that exists and is needed if the plants are to survive in the face of future stresses caused by disease or climate change for instance. Dr. Pia Winberg – France is embarking on genetic management projects what are you pursuing? Philippe Potin – We will be cautious. There are a few species that will be improved through sexual breeding. There are many questions raised by the propagation of selected individuals in the natural environment. For species with vegetative propagation, such as Kappaphycus and Eucheuma in South-East Asia and Africa the background of about 30 years of intensive cultivation pointed at some bottlenecks with genetic diversity These crops originate from a few natural populations but some countries have low diversity in their selected individuals. In Africa there is more opportunity to grow because the cultivation is more recent,but the problem is to keep the possibility of sexual p to save some of the original genetic diversity of natural populations. We have genomic info for species and biological and biochemical info on this, in the lab it is not so simple, it is hard to establish a large population to guard the genetic diversity. Most of the management of kelp farming it is theoretically easier, you can propagate different strains with different genetic backgrounds at the gametophytic stage, the establishment of banks of gametophytesis an interesting project for future genetic management. In our centre, we are finding lot of background in China where they were relying on a very low genetic diversity and intensive cultivation of a few selected strains of Saccharina japonica. They were selecting for iodine content or blade morphology, most of the cultivation relies on this inbreeding was successful in the beginning but have led to a lot of bottlenecks and Chinese farming companies are facing a lot of problems with japonica. There is a constant effort to breed new plants and the genetic management was based on lab banked material. But, in the last few years they have gone back to the natural populations in Japan or Russia. Really you must start with establishing a strong genetic basis, working on a large kelp sampling in populations to capture this 153
  • diversity. Can we find enough diversity in local populations and avoid to introduce genotypes from far off locations? You can run the risk of introducing certain genotypes to new environments which may have a lot of associated problems; this is a very important factor to orientate our work. Working with geneticists, and especially oyster geneticists, we learned from oyster mistakes with selective breeding. Our project is based on basic research, and we need to continue to develop seaweed genetics, using Ectocarpus as a model to understand basic genetics. It is not obvious to transfer most of the theoretical concepts of diploid organisms in seaweeds which displays a haploid diploid lifecycle. Dr. Pia Winberg - selective breeding is requiring different approaches across the types of species you are working with. Rui what species are you working with and how will this influence genetic resource considerations. Rui Pereira - In small business you need to consider if you have the resources financially and technically wise as well as the human resources to undertake selective breeding programs. Most of the research and technological knowledge is still in the University sector not in businesses, presently you need to hire someone from University or a recently graduated student and start training in a commercial environment. Some small companies produce kelp collecting parental material from the wild every year. In other words, they don’t  maintain gametophytes in culture but rather they rely on the yearly collection of mature sporophytes to work with. In our case the species we work with are reproduced vegetatively. We have initial stock material and we don’t  collect  material  from  the  wild regularly.. Some places, like Acadian Sea plants have stock culture for over 20 years. In these conditions, however, a company is actually  carrying  out  a  kind  of  “natural  selective  breeding”. The individuals that grow fastest and survive contribute more to next crop harvest and to some natural selective breeding. The other consideration is the target of their product, where do you want to target? Human food eliminated the GMO vein of research because consumption of seaweed is linked heavily with 100% organic and natural. For this target you need to avoid GMO. Selective breeding is done even if it is not intentional and organic tomatoes can still be organic even if selectively bred. Dr. Pia Winberg – how many of you species are sexual and or vegetatively propagated? Rui Pereira – Only one is sexual, the Porphyra. For the rest, since we are still a small start up with limited human resources and technical capacity, we use vegetative propagation. Dr. Pia Winberg – We need a large genetic library in starting genetic breeding programs and we need to understand the species we are working with. Seaweed has a bit of work to do in this area, for example Porphyra was reclassified as Pyropia and there are many other examples across all groups of seaweeds. Is this a first step that we need to address, in establishing what we are working with? Rui Pereira – For   companies   working   with   an   established   crop,   taxonomy   doesn’t   really   matter. Production will continue in the exact same way. For reclassifications we can at most change labels, but often products don’t  identify   the particular species but rather the genus or the common name. Naturally, for genetic work later this would be important, if you target a specific species that you need to collect from the field you need to be able to identify it properly. Dr. Pia Winberg – We need to consider that further in Mozambique, in terms of screening for development of new species, you would need to screen for the candidate species? Claudia Baule – First there would be a need to know the genetic background and diversity of local species to be able determine what species to target, for which traits, and what potential is there for development of new species. I see genetic management rather genetic manipulation as the line to pursue in Mozambique, at least till we have advanced with implementation of the framework to deal with concerns of genetic manipulation. However, recognizing the value in it, it is work that can be done through collaborations with relevant institutions, once species genetic background is investigated. In the old days we used to have morphological characteristics to classify species but today we have all the advantages of genomics to do this even faster and to undertake functional studies that help define traits, 154
  • mechanisms and interactions relevant to access the species potential. The complementation of taxonomical studies with genetic studies is more informative and can speed up the outcomes in genetic management and genetic manipulation. We have to keep in mind the controversies surrounding agro biotech food. GMO will not be considered as a first line, as production of GMO in Mozambique still need to be adequately discussed and demystified . Dr. Pia Winberg – In terms of selecting species that may be a value in the future, will knowing what species may influence the potential for pharmaceutical products. Philippe Potin - In France, the strategy is to link traits and compounds that cosmetics would like to cultivate in a small scale with genetic information at the species level and to protect the product by protecting the producing strains and being first to commercialize active compounds from a given species. Lots of companies are already interested in propagating certain species at a small scale. Definitely during the last years there were so much progress in molecular taxonomy that this knowledge should be a service provided to small companies. Dr. Pia Winberg – Another challenge is that seaweeds have such diverse, complicated and sometimes simple life histories. Implementing breeding programs in the field requires that people understand the reproductive biology better. But focusing on this research may not target the current opportunities for industrial growth. How do we implement selective breeding programs with a capacity to propagate? Do we target large scale producers who propagate already and how important would this time spent be to large-scale producers? Nicholas Robinson – in Norway they established the salmon selective breeding program when the industry in Norway was quite small (around 100 tonne) but the breeding program is one of the most important factors in the sustainability of this industry in Norway (now over 1 million tonnes). In broiler chickens over 45 years of selective breeding they have decreased days to harvest by 68% (85-90% of this improvement is due to genetics, 10-15% due to improved nutrition). In fish and seaweed, genetic improvement will be much faster than for chickens as many individuals can be produced in a family and as there is a fast turn over time (generation time). In Norway you can find one of the best example of the benefits from selective breeding. A study comparing genetically improved to wild Atlantic salmon has shown that after 5 generations of selection, growth rate more than doubled, but that you only need to feed a little more than 50% more feed to the genetically improved animals, so that the improved salmon are much more efficient at converting feed into flesh. This improvement in efficiency alone results in a saving of and save 260 million US dollars in feed costs per year to produce the same amount of salmon. to the longer you put off starting a   breeding   program   the   longer   it   will   take   to   reap   these   benefits.   We   don’t farm wild chickens, wild cows, or wild vegetable crops, all of our other crops have been domesticated and genetically improved with some form or other of selective breeding over hundreds of years. We should start well managed programs of genetic improvement for major seaweed species now. Philippe Potin – There are not many farms for seaweeds in France at the moment, there are small companies that cannot invest much in research. However, some of them invest a lot of time in establishing new bases for successful and sustainable cultivation. The question at the moment is that farming of seaweed in Europe started quite worryingly on introduced species such as Wakame. Interestingly we are learning about domestication processes from these introductions. There were escapes of introduced species to wild populations, and we want to prevent this type of mistake in the future. That is why when considering strong cultivation of kelp we need to first have the genetic resources and study this before. For our native kelps in Europe, cultivation started more than 25 years ago but we haven’t  learned  from  these  trials  because  we  didn’t  collect  data or genetic material. A lot of effort was provided but no good records were kept to learn from. Rui Pereira – Touched an important point of selective problems for any species. That is if the companies will see the advantage, while considering the financial and technical resources limitations.   Again,   there   aren’t   at   the   moment   many large seaweed-producing companies. In the western hemisphere I believe there is none. Even in the main seaweed producing countries a lot of the production is based on small and often family-operated farms. So, at this moment we really need each country to decide that this is an industry that they want to strategically support and, 155
  • therefore, put the resources into its development. It really has to be a strategic position of a large group of invested parties. There are some companies that have succeeded – Acadian Seaplants, without a Canadian program for selected breeding, as been around for more than 20 years. However, during that time very few new seaweedproducing companies were created in the EU, North America and the entire western hemisphere. We need more people in this business to have more to say to make this a priority for development. Naturally, finding the value in the product, either through novel applications or diversification of the produced species, will be key for that development and in many cases basic biological and life cycle research is still needed. Nicholas Robinson - In  Norway  they   decided  to  invest  in  selective   breeding   of  salmon  in  the  early  1970’s   because   they envisaged that the industry would grow in the future. A company that focuses on selling genetically improved seed could find a large market for improved seed in parts of Asia. One consideration for such a company is how to get repeat business when the stock that they sell is so easy to clone and replicate. If each generation is substantially better than the former generation of stock, then this produces an incentive for buyers to buy the latest improved generation form the company selling improved seedstock. In Norway our institute (Nofima then Akvaforsk) set up the breeding program for salmon. As the industry grew a farmers cooperative formed and they took over the breeding program. With more growth of the salmon industry a company was set up (Aquagen) and then a second company (Salmobreed) because the industry wanted more competition. Marine harvest, a vertically integrated company, set up their own breeding program. In India we have helped the Central Institute of Freshwater Aquaculture (CIFA) in Orrissa for many years to breed rohu carp. CIFA distributes stock to different state hatcheries in India who then multiply the stock and deliver it to the growers (rural communities with a few ponds). Over a million tonne of rohu is produced in India each year. Farmers can now produce 3 or more crops per year from a pond using the selectively bred rohu, whereas in the past they produced one crop per year (using unselected rohu). You need a lot of support, but also good industry organization in order to achieve broad distribution of the benefits from selective breeding. In Australia they are trying to begin selective breeding programs for barramundi and other species by starting- up breeding program companies owned and led by the industry. Dr. Pia Winberg – what are the traits we want to improve in seaweed, for example growth rates within species? Rui Pereira - The information about these traits need to come also from those biotechs that use our products, so we sell to companies they then relay what they learn about the product through their testing and also considering what their costumers value. For instance in the case of seaweed to be used in fish feed: Sometimes they look for specific pigment content, in order to change the color of skin or muscle of the fish. In Portugal people buy whole fish, so pigment in feed may be an important factor to obtain fish with the best appearance for the consumer. Other example, certain amino acid profiles are important for fish culture. Taurine is another example of an important amino-acid, in this case for cats. Taurine is an essential amino acid for cats, so pet food companies may target these specific ingredients. In other words, specific traits are linked strongly to the end user so what they are looking for is what we are interested in selecting. Dr. Pia Winberg – In China they have improved the Laminariacea production for iodine content. But can we improve an amino acid profile? Nicholas Robinson - don’t  know  if  this  [amino  acid  profile  genetic  improvement]  is  done  in  other  species.  To  make   genetic improvement you need to figure out what is the influence of genetics on the amino acid content versus environmental effects. Often there are lots of things that influence or are correlated with these types of traits. For instance, the amount of a bioactive might be correlated with plant size, cell structure or ploidy. Also, many producers want consistency in production most of all. For seaweed you could achieve uniform production by basing all production   on   clones   of   the   “best”   plant   from   your   selective   breeding   population.   Genetic   variation   could   be   maintained within the selective breeding population, while production by industry could be based on one or a few clones.. We need to work out what are the specific traits the industry needs to improve. How do we best make the genetic improvement (taking care to avoid inbreeding and loss of genetic variability)? How do we best distribute the benefits from the selective breeding program to the producers so that the producers achieve greater quality, quantity 156
  • and consistency? How do we manage the genetics so that benefits are sustained into the future as circumstances in the environment and industry change? From audience – Talking about pigments effecting flesh of fish, can they be utilized in textiles industry? Philippe Potin – There are some people trying to do that, but seaweed pigments ca not be used for textile staining. It is quite difficult to select for a single trait without counter-effects. We have to progress with new methods for chemical phenotyping for a lot of individuals using metabolomics which are strong tools for selection that allows you to target something this specific. Claudia Baule – Technically genes are genes, the starting point is that you have to know the genetic background of the organism you are working with. Sometimes it is not only one set of genes but several genes that are behind the manifestation of the desired characteristics. In view of the involved factors and interactions, basic research need to be considered in association with targeting specific traits. Having the genome and knowing the genomic spectrum of species is only the first step. Genomics is useful to accelerate knowledge, and allow for functional studies of groups of species. It will without doubt revolutionize the field of algae to open paths to knowledge on previously unknown properties in several species, and serve to support appropriate management and manipulation strategies of species based on nutritional value, pharmacological properties, industrial and environmental applications Dr. Pia Winberg – What are the consequences and the suffering that countries have experienced due to poor genetic management. Is is a real need to guard against this? What do we face in terms of risk or lost opportunity? Nicholas Robinson – There  has  been  a  lot  of  talk  at  the  convention  about  feeding   the  world’s  growing demand for protein and marine oils, but there has been little discussion about how well planned genetic improvement programs can help us to meet these demands while still using the same footprint (eg. by improving production per unit grow out area). We must improve the genetics of these species if we are to be able to reach these goals. Only about 5% of fish production is derived from genetically improved stock. 20% of aquaculture production is seaweed, but little genetic improvement occurs. Improved genetics results in higher production per grow out area and can result in the improvement of many other traits. But we need good genetic plans and we need to select a few valuable traits and guard against inbreeding to ensure that we get large benefits in the future. Much can be learnt from other species (eg. plant, livestock and fish breeding programs). The new technologies have a place but first we need breeding programs to be able to effectively apply these new technologies. Philippe Potin – We are focusing on a better knowledge of seaweed metabolism, we are at the bottom steps but we can develop in parallel, selective breeding inspired by the methods applied in kelps in China and Japan to select for interesting genotypes. It may be facilitated by the availability of new molecular tools that will help to link the genotype with the phenotype. We know there is not too much information. Countries will improve their crops because there is no other choice. Farmers do not require for the moment sophisticated tools but want to collaborate with academic to know the genetic diversity of their crops. For seaweeds we have done a lot progress in population genetics during the last two decades, this will form a critical aspect of development in the future. Bringing geneticists biochemists and all the farmers together to establish these breeding programs is crucial because we  don’t  have  the   same knowledge as available for terrestrial plants or fish, so we have to be pragmatic and cooperative. Rui Pereira – Lot is known about the benefits and potential for seaweed, biotech companies know these benefits and many people and potential consumers are also aware of these benefits. What is really necessary is to increase the companies capacity to lobby at the highest level to  have  country  government’s  stand  up  and   make the development of this industry as a priority. Same happened with other industries and economic areas in different countries. We (companies) will be able to get there but it will take many more years and there are risks of not doing it right, probably many small companies may fail in the meantime unless someone has the courage, nationally, to prioritize 157
  • seaweed production. China and Japan did that decades ago. South Korea is doing it as well as countries like Indonesia and several others. Claudia Baule – finding new species is important to stress as a follow up to the establishment of seaweed networks for this work, genetic management will come with lots of policies an deregulation Dr. Pia Winberg – There is a need for recognition of seaweed as a serious crop in the west. Special thanks to Dr. Victoria Savoie-Swan, post-doctoral fellow in the Department of Biochemistry and Molecular Biology at Dalhousie University in Halifax for the note taking. 158
  • PLENARY DISCUSSION: MARINE BIO RESOURCES & SPATIAL PLANNING David Millar Regional Director Ecosystems Management Department of Fisheries and Oceans, Canada Manuel Pinto de Abreu Secretary of State for the Sea Portuguese Government Patrick Van Klaveren Ambassador for the International Environmental Organizations, Monaco Stephen de Mora CEO Plymouth Marine Laboratory, UK Laurence Madin Executive Vice President & Director of Research Woods Hole Oceanographic Institution, USA Key Take Away Message : Marine territories of many coastal countries are typically expansive, and should be viewed as huge economic development opportunities which should lend to facilitation and management through Marine Spatial Planning. Experience cited by Panelists depicted a dichotomy of national approaches, laws, and policies in support of MSP being at different stages of development across nations, and across different jurisdictions within nations. All agreed there are a multitude of competing uses of the ocean and there is a common need for strategic planning, scientific assessment and long-term monitoring. Marine planning in more developed zones versus undeveloped areas present significantly different drivers and challenges. Spatial planning needs to be established with both historical and potential industries and activities in mind. All rests on the need to successfully balance and manage economic, environmental and social issues associated with ocean uses in a sustainable way and to minimize existing and potential conflict. Goals need to be established at a very high level at the onset to provide guideposts for spatial planning. 159
  • Stakeholder engagement is an essential precursor for achieving acceptance of spatial planning, and spatial planning in turn must demonstrate successful outcomes, improved options and opportunities. Successfully engaging all relevant stakeholders up front however, is recognized as a significant challenge. Another challenge identified is the differences in time spans needed for largescale decision-making (e.g. 5-20 years) versus that for a political entity or public opinion. Baseline environmental studies ahead of development, and monitoring thereafter to evaluate the changes vis-à-vis intended outcomes of projects, were uniformly identified as essential tools for measuring the success and benefits of MSP. Modeling was identified as essential for achieve these ends, given the often limited availability of length scientific time series and data gaps, coupled with long term changes in the environment, such as climate change. These models ought to be stated both in terms of ecosystem services, as well as in terms of economic, environmental and social parameters, so that all aspects can be compared at the same level. Each panelist began the conversation by discussing their experience with marine spatial planning: Manuel Pinto De Abreu: Began his talk by showing a map of Portugal and its marine territory, and its Exclusive Economic Zone (EEZ). He explained that Portugal since the expansion of its EEZ is 6% land and 94% opportunity. The marine spatial planning (MSP) that Pinto de Abreu is familiar with includes surveys in the north Atlantic continental shelf, collecting data on a variety of factors including water quality and natural resources. These surveying operations have covered over 2 million square km, for over 1000 days with the expertise of over 250 international scientists. Pinto de Abreu also made the point that as far as the Atlantic Ocean is concerned, Canada and the   US   are   Portugal’s   neighbours   and   that   consequently  all   countries   need   to   adapt   a   MSP   strategy  so   that   operations   on both sides of the Atlantic can be coordinated. The Portuguese government is also working within the EU for the adoption of directives on MSP, seeing that oceans are not defined by national borders and are thus shared by all nations that surround them. On a political level, Pinto De Abreu stated that MSP requires laws from the government to regulate the use of ocean waters. In order to generate appropriate laws, research has to be conducted to develop a general picture of the ocean use in marine waters (in his case Portuguese), with both historical and potential industries and activities in mind. Patrick Van Klaveren, Ambassador for the International Environmental Organizations, Monaco: Working for the Monaco government, Van Klaveren has collaborated to develop several intergovernmental tools, and particularly the protocol for specially protected areas and the biodiversity in the Mediterranean as a result of the Barcelona Convention. Van Klaveren’s main expertise is with national policy and he is in charge of international affairs in the Monaco government. Stephen de Mora, CEO, Plymouth Marine Lab UK: De Mora added a scientific perspective to this talk on MSP and his background deals with global environment facility projects, marine pollution monitoring programs and general monitoring aspects of the marine environment. Most of his expertise in MSP is second hand as relevant PML research falls in the categories of remote sensing and coastal marine ecosystem modeling, and socio-economics. Specifically, PML provided significant advice to Lord Kingsland when he was working with the UK legislation on the Marine and Coastal Access Act of 2009. Laurence P. Madin, Executive Vice President and Director of research, Woods Hole Oceanographic Institution, USA: Woods Hole Institution does not have a main role as MSP implementers, but rather they focus on environmental and economic analysis. They engage in technology to gather data for coastal ocean research that has to do with the impact of weather, tides and changes in coastal geomorphology among other interests. They are funded by the American NSF to build underwater observatories to gather environmental data in critical locations for ocean dynamics and fishery areas. Woods Hole looks at various problems with a high level analysis as well as by providing baseline data acquiring technology. 160
  • Madin   went   on   to   explain   that   in   the   US  the  national   government’s   plan   pertaining   to   ocean   regulation  endorses   MSP   in general terms without providing a clear mechanism to follow. Much of the specific organization for MSP is left up to the individual states. David Millar: Why is it important that we engage in MSP? What are the drivers for MSP? Stephen de Mora: There is competitive use of limited resources which can result in many conflicts between different groups.     Often   the   mindset   is   that   because   you’ve   been  doing   a   specific   activity,   for  instance   fishing,   for   a   long   time   in   the same place you have the right to continue to do so. This opinion isn’t  necessarily  correct,  especially  in  this  time  of   rapidly changing environmental conditions and new marine based technologies. The goal is to maximize the use of a limited resource. Some of the drivers for engaging in MSP are that there are more scientific tools available now to manage the processes needed for MSP. Laurence Madin: There are at least 15-20 potentially competing uses of ocean which each require often overlapping aspects of the marine environment. A specific concern regarding MSP is the idea of a timeline when referring to MSP. Should certain MSP decisions be permanent or subject to review from time to time especially with respect to changing environmental and economic pressures? Some developments like off shore wind farming need a  long  term  “lease”  of   an area but other developments might be subject to a more frequent review. Manuel Pinto De Abreu: In Portugal, MSP means strategic planning of the different uses of the ocean in order to decide what is important ensuring its sustainable use. In order to do this you have to look at the economic importance and the social and the environmental value of every use of the ocean. Portugal has identified 5 main domains of ocean activity: aquaculture, energy, deep sea mining, biotech, and tourism. A successful MSP system must consider all activities and you need to engage the relevant stakeholders to determine what are the best areas are for each activity. In understanding historical ocean use by communicating with the people who have been using the ocean you can deal with existing and potential conflicts. For instance: you can deal with a potential resource conflict if it is possible to avoid using an historical fishing area when defining a region for energy development. Ultimately, MSP will succeed when it can demonstrate that it is a successful management option, presenting better solutions in issues of economics, the environment and in issues of a social nature. Patrick van Klaveren: MSP planning of developed zones is mostly what is discussed but there are a lot of potential areas that are undeveloped and should also be of interest. Make proposals of new activities in new undeveloped zones and create a new map of the sea that focuses on the potentiality of the sea with respect to all aspects like tourism, development etc. Laurence P. Madin: In developing countries there is opportunity to create new ocean based technology that enhances the economy. People will be more accepting of these changes if there is spatial planning that shows how such economy boosting plans will be located relative to historic activity in a particular area, and how they may affect such activity. Stephen de Mora: A no catch zone marine conservation site (one of the first) in New Zealand north of Auckland was introduced. The local fisherman were not happy at first but soon came around when the conservation site helped fisheries, notably the lobster industry, recover in that area. This site is an example of a win-win scenario as the conservation in that area led to a tourism boom bringing increased economic benefits. Another example in which a socio-economic study was conducted is the closing of Lyme Bay to scallop dredging in the south coast of the UK. Although this was detrimental to the dredgers, the initiative ended with an increase in economic growth in region. Stopping the dredging fostered other activities like diving and sport fishing in the area, and sport fishing is a bigger earner for more people in the southwest UK than commercial fishing. David Millar: It is a good tool to be able to measure extent of success. What are the approaches being used to assess the benefits of MSP? Stephen de Mora: It is possible to do baseline studies beforehand if you know closures, etc. are going to happen. In this case you can take measurements before, during and after the change is implemented. Also, if you are in contact with the people affected by the regulation change you can study economic advantages and disadvantages. 161
  • Laurence P. Madin: Looking at the example of a wind farm off of Cape Cod, there is a long process of environmental studies that must be done before you can start a project of this scale. These studies however may not be scientifically satisfying as they often only have to satisfy government standards. It is important to monitor the outcomes of MSP efforts and model in advance redistribution of economic activities. Also you want to have expectations of what you want to accomplish, make models, and then see how it works in practice and compare to your previous models. Stephen de Mora: It is great to have models but when trying to model multiple uses of a zone there is never enough real data to make it run. However, these models so far have been run with synthetic data. Manuel Pinto De Abreu: Every time a project wants to use the ocean in a certain area you must monitor the area in order to evaluate the economic, social and environmental impacts and compare the results with the expected outcome of the projects. It is necessary to establish good monitoring models as everything changes quickly with time and you need to adapt as the project continues. In the end you may even need to change your views on the project. Patrick van Klaveren: It is necessary to develop more tools to speak in economic terms, not only about resources but also services. Talk economically about every value that can be measured, like pollution and biodiversity, so that all aspects can be compared at the same level. David Millar: Stakeholders: What are some of the challenges faced, and how do stakeholders react? Manuel Pinto De Abreu: One of the many challenges is to define the uses of the ocean. In Portugal a public discussion was open to everyone in Portugal that uses the ocean. Everyone was able to put forward comments. Unfortunately,  the  result  was  that  there  wasn’t  much  return  from  stakeholders  themselves,  even  though  after  the  first   decision relating to MSP, everyone suddenly had an opinion! Patrick van Klaveren: Failure in conversations between stakeholders, CEOs and government. Question of time is important as often 5-20 years needed for large scale decision but that is not the time span for a political entity or public opinion. Time scale is very important in these decisions. Stephen de Mora: There   are   two   groups   of   stakeholders:   people   that   don’t   realize   they’re   stakeholders   until   they   want to complain, and people that are extremely passionate. The passionate group is often either trying to protect an aspect that is important to them (like their livelihood), or trying to protect the environment. Passionate people are often the most vocal and the least flexible but often do not represent society as a whole. Influence on the government from the passionate pressure group does not necessarily have the support of the silent majority. It is a monumental task to include stakeholders in the MSP discussion and this task is most likely to be successful if initiated before rather than after the event Laurence P. Madin: Eco system services is a benefit to entire society but is there some way to value all uses of coastal ocean in such a way that each of them can be given an economic value? Use that then to understand that all of these  things  need  to  be  included.  Can’t  satisfy  everyone  and  there will be conflicts. Ultimately, stakeholders need to accept some degree of compromise. For example if some new activity is introduced to an area that is already in use like new energy in fishing grounds – compensation in the form of money may help ease potential conflicts. Questions from audience: Pierre Erwes: Where do we stand with international collaboration? How could we help countries with lots of biodiversity like Mozambique to foster the utilization of their potential and implement a safe regulation to protect this potential? Manuel Pinto De Abreu: One must first consider what are ecosystem services? One cannot move forward without agreement on basic definitions. You also need good practices to build common ground and to reach a consensus on how to proceed. Patrick van Klaveren: Six year management cycle with all countries with 3 groups – one with monitoring … ongoing 162
  • Stephen de Mora: Lots of legislation required. Europe is grappling with a marine framework written by lawyers with an inbuilt vagueness that protects them. This legislation is then passed to scientists, and the scientists are demanded to  figure  out  what  good  policy  indicators  that  will  show  people  in  5  years’  time  that  this  legislation  has  worked  out.     There is a limited opportunity to define indicators and groups and countries need to agree among themselves that these   are   the   indicators   that   we’re   going   to   use.     With   respect   to   Mozambique,   we   need   to   take   this   expertise   to   other   countries. Once we succeed in Canada, the US, and the EU we can transfer these techniques to other countries and other situations. Laurence P. Madin: Leave it up to science to figure out what they should be looking for and measuring. Everything is still very much under development on just what to involve in the monitoring of these systems. For Mozambique it is important to investigate the local knowledge that has been amassed over many years. This is a very important source of information on the environment from the people that live there and know it the best. They may have more insights into how the coastal system works than people in the academic world. Question from Audience: Challenges with data gaps: Additional challenges with baseline to measure future change. The baseline is dramatically different now than it was 20/30 years ago. Lots of change happening – that adds another layer of complexity. What is your perspective on that? Stephen de Mora: Everything needs some flexibility where you can introduce periodic reviews. Many instances around the world do not have a very good baseline. You can use models to look at pelagic environment, but the benthic environment is harder to monitor. The Western Channel Observatory run out of Plymouth is one of largest oceanographic time series in world and dates back to 1903. This long term data set measures many variables and helps with ecosystem model and Earth Observation algorithm development. There are very few places in the world that have this kind of historical data available which helps with establishing trends and potential baselines. We are in a changing environment and we can really only use models to tell where things are going. Modelling is very important. Laurence P. Madin: Many changes in the past (like overfishing) have been human caused. The changing climate is what  we’re  facing   now  and  if  we   make   our  marine  allocation  choices   now  for  MSP  they  may  be   out   of  date  in  a  couple   decades. It is therefore necessary to have a built in mechanism to look at all sorts of changes that will be caused by the climate and monitor our allocations for MSP frequently. David Millar: Recommendations for moving forward with MSP: Manuel Pinto De Abreu: You are always going to miss some sort of data, there will always be data gaps, and there will  always  be  something  you  don’t  know.    The  oceans  are  too  big,  the  resources  are  limited  and  it  changes  rapidly.     Therefore, getting involved in MSP is a priority for Portugal. We need to develop basic principles on how to use the ocean based on reliable information and data and make decisions considering what is the most important and adequate. Patrick van Klaveren: MSP is ambitious. To work in MSP requires national coordination. Stephen De Mora: Speaking for the science side, it is necessary to make the best use of suitable scientific tools like marine habitat mapping, and marine ecosystem modeling. These tools will greatly aid the planning process. Laurence P. Madin agrees with colleagues but adds that on the outset of the planning process you need to have a goal in mind and you must prepare to make adjustments as problems arise. Have room for flexibility in the process but be aware  if  you’re  on  track  to  accomplish  your  goals. Special thanks to Jackie Zorz, Master of Biology candidate at Dalhousie University in Halifax for the note taking. 163
  • BIOMARINE CASCAIS 2014 MANUEL PINTO DE ABREU, SECRETARY OF STATE FOR THE SEA, PORTUGUESE GOVERNMENT P ortugal is making significant efforts to encourage investment and R&D activities in the ocean. Portugal is at the forefront on the adoption of procedures for good ocean governance, as well as for the sustainable development of the ocean in its three main components: social, environmental and economic. Amongst the sectors currently being advanced, marine biotech is a priority. Portugal is committed in overcoming the existing difference in R&D between biotech and marine biotech, bringing marine biotech up to speed, while continuing to invest and further develop the biotech sector in Portugal. Hosting BioMarine 2014 in Cascais will be a challenge for Portugal and a unique chance for all those interested in taking advantage of the changes taking place in Portugal, namely, with respect to the national strategy for the sea and marine spatial planning. Indeed, these are times of opportunity for Portugal that must be enhanced and grasped making the Sea of Portugal an ocean of opportunities for all. We are looking forward to welcoming you in Cascais.” SAVE THE DATE: 30-31 October 2014 - 5th BioMarine Business Convention! Bernardo Corrêa de Barros Adjunto do Vice Presidente Camara Municipal de Cascais Watch the video 164
  • THANKS TO OUR 2013 SPONSORS Black Pearl Sponsor: Grey Pearl Sponsors: White Pearl Sponsors: Pearl Sponsors: 165
  • LIST OF EXHIBITING COMPANIES AT BIOMARINE 2013 ABCO Industries Limited T: 902-634-8821 ABCO Industries Limited is a metal fabricating company located in Lunenburg, Nova Scotia focused in custom proprietary designed equipment for Industrial, Marine, Environmental and Food Machinery applications. ABCO will showcase our line of welded aluminum boats which includes Environmental Research Vessels, Work Boats as well as our abilities in custom fabrication. Please check out our website for more info. Ascenta Health T: 902-435-7329 Ascenta is a developer of innovative natural health products unsurpassed in quality and purity. We are an industry leader in omega-3 fatty acids and are committed to producing supplements that improve health and promote optimal wellness. We operate in a sustainable manner to lessen our environmental footprint. We are headquartered in Dartmouth, Nova Scotia and our products are sold throughout North America. Atlantic Canada Aquaculture Industry Research & Development Network (ACAIRDN) T: 902-368-2757 The Atlantic Canada Aquaculture Industry R&D Network (ACAIRDN) is a network of industry association R&D Coordinators who support the scientific and technical needs of their members through relevant research and seek to build partnerships with government agencies, academic institutions, research organizations and other associations. Atlantic Canada Bio-Industries Alliance T: 902-421-5705 The Atlantic Canada Bio-Industries Alliance is made up of the four lead agencies for biotechnology/life sciences in the Atlantic region – NATI (Newfoundland & Labrador), BioAtlantech (New Brunswick), BioNova (Nova Scotia) and Prince Edward Island BioAlliance. All promote the growth of marine biotechnology in Atlantic Canada. Bigelow Laboratory for Ocean Sciences T: 207-315-2567 Bigelow Laboratory for Ocean Sciences explores topics ranging from microbial oceanography at the molecular level to global ocean processes. Bigelow Core Research Facilities are available for industry partnering: National Center for Marine Algae and Microbiota, Bigelow Analytical Services, Facility for Aquatic Cytometry, Single Cell Genomics Center and Ocean Mesocosm Facility. National Research Council of Canada (NRC) / Eureka! T: 613-993-9101 National Research Council of Canada (NRC): EUREKA!Canadian National Office: NRC is a research and technology organization focused on real-world applications contributing to a stronger, more prosperous Canada. We provide access to strategic R&D, technical services and specialized scientific infrastructure. The NRC Industrial Research Assistance Program (IRAP) offers a suite of advisory and networking services, and 166
  • funding to qualified Canadian SMEs. IRAP is   Canada’s   primary   mechanism   for   the   engagement,   qualification   and   funded support of Canadian SME participants in Eureka projects. EUREKA is an international network for market-driven industrial R&D that includes over 40 economies in Europe, Israel, South   Korea,   and   now  Canada.   Through   Canada’s   associate   membership   in   EUREKA,   Canadian   innovators   have   technology partnering opportunities in virtually all civilian technological areas, including innovation in the biomarine sector. North Carolina Department of Commerce T: 919-715-5743 Marine biotechnology, pharmaceutical and life sciences companies are flourishing in North Carolina. In just 10 years, the state has invested over a billion dollars in university research and facilities, worker training, incentives and infrastructure. North Carolina consistently ranks in the top 5 states for bioscience development. We look forward to working with you. Novus International Inc. T: 1-314-576-8886 Novus Aquaculture Solutions are designed to provide health through nutrition. The complete portfolio of gut environment modifiers, backed by extensive R&D and application   expertise,   have   proven   Novus’s   technologies as successful tools that are used across the world and the industry. Because we focus on your needs, you can count on our solutions Office of Small and Medium Enterprises – Public Works and Government Services Canada T: (902) 426-5677 The Office of Small and Medium Enterprises (OSME) assists businesses to sell their goods and services to the Government of Canada. OSME also manages the Build in Canada Innovation Program (BCIP), which buys precommercial innovations from Canadian companies and tests them within the federal government operational environment. Pro-Oceanus Systems Inc. T: 902-530-3550 Pro-Oceanus Systems is a world leader in the production of the most stable and accurate gas sensors for dissolved CO2, CH4, and Total Dissolved Gas Pressure. Custom design and integration options are available for all our products Resolution Optics Inc. T: (902) 444-4449 Resolution Optics will display a submersible microscope that can image, count, size and characterize particles and microorganisms   in   water   ranging   in   size   from   1μm   ↔   2mm.   It   is   the   perfect   instrument   for   water   quality   and   monitoring, oil and algae research; offering a real-time, in-situ alternative to traditional water sampling. Rosborough Boats T: 902-450-3262 167
  • Rosborough’s   58   years   in   custom   and   semi-custom boat building has positioned us well to meet changing Marine Industry demands. More information can be found on our website at www.rosboroughboats.comIt would be our pleasure to meet with you and discuss how our lineup can be customized to meet your needs. Scottish Development International T: 0141-228-2278 Scottish Development International (SDI) is the international economic development agency for Scotland. It is a joint venture between the Scottish Government, Scottish Enterprise and Highlands & Islands Enterprise. We work to attract investment and knowledge to Scotland in order to help the economy grow. Key areas of strength include life and chemical sciences, animal health and aquaculture. We also assist Scottish organisations to develop their business overseas while promoting Scotland as an excellent place to live, work and do business. Our international network of offices provide a wide range of support services including business mentoring, market intelligence, business location information and investor aftercare. 168