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Astaxanthin for Human Use, The Origin of Cardax

By April 22, 2014April 28th, 2014Management Insights

By David G. Watumull, Cardax President and CEO

It is my distinct pleasure to welcome you to the first Cardax blog post. Our goal is to provide timely and interactive communication for investors and others interested in our Company. In addition to formal press releases and SEC filings we make available through other channels, we hope to offer personal perspective on several relevant areas, including the Company’s progress, capital markets, and relevant developments in the pharmaceutical and nutraceutical industries.

As you know, Cardax is developing a new class of oral anti-inflammatory nutraceuticals and pharmaceuticals – highly potent but without the side effects of traditional treatments. But where did this breakthrough come from and how did we get started?

I was a life science investment banker and biotech analyst in the mid 1990’s. I was trying to find financing for a company out of the Scripps Institute of Oceanography in La Jolla with a novel photo-bioreactor technology that allowed, for the first time, production of photosynthetic organisms.

Their first product was the microalga Haematococcus pluvialis that produced astaxanthin, the compound that gives salmon its distinctive pink color. Management believed strongly that this “natural” version of a synthetic compound already in wide-spread use in the salmon feed industry would enjoy rapid acceptance, despite its decidedly higher cost and low production volume. Unfortunately, discussions with salmon feed manufacturers quickly disavowed me of the product’s commercial viability in that market, where price competition and large, secure supply capacity dominated.

The company was clearly dismayed that there was no market for their product in the salmon feed business. But as we disappointedly sat around a beer later, discussions moved to the benefits of astaxanthin for salmon. Yes, company scientists said, salmon were grey (and not very pretty) without it, but salmon without astaxanthin were smaller, didn’t reproduce as well, got more infections, and, if released, were not strong enough to swim upstream!

Immediately, my analyst background kicked in and I thought, “Wow, that’s a lot more than pink” and as we discussed the data supporting astaxanthin’s benefits, including its potential anti-inflammatory and anti-oxidant activity, an idea began to form. Clearly, because humans have eaten salmon for thousands of years, astaxanthin at the doses found in salmon was safe. Instead of a fish feed product, perhaps the company could develop a human dietary supplement or nutraceutical where pricing and volume were not so crucial? At the time, there were no astaxanthin dietary supplements available.

I proposed this idea to the company but they did not want to develop a dietary supplement themselves and asked if I could lead that effort. As a biotech analyst, I was well aware of the coming major challenges facing the biopharmaceutical industry, including the patent issues and drug discovery challenges that continue to roil life science companies to this day and I knew a safe, powerful anti-inflammatory was a disruptive game changer.

I was eager to pursue the opportunity so I joined the company and in 2000 we brought out an astaxanthin dietary supplement. The FDA has confirmed the safety of these types of dietary supplements and several astaxanthin products now enjoy a GRAS (Generally Recognized as Safe) status, the agency’s highest safety designation.

Even after we commercialized this product, the earlier production problems continued and I became convinced that a much larger market for astaxanthin, including pharmaceutical uses, could develop but only if reliable, mass-market volumes with competitive pricing could be achieved. To accomplish this goal, I proposed developing, through a partner, large-scale production of a nature-identical synthetic astaxanthin but the founders and management of the company wanted to stick to the company’s foundational microalgal technology – which I understood.

So I left and formed what has now, through several iterations, become Cardax.

Today, the role inflammation plays in chronic disease is well accepted and understood scientifically. Inflammation is now thought to be the underlying causative factor in many of the largest chronic diseases including arthritis, diabetes, asthma, cardiovascular disease, CNS disease, and liver disease.

This opportunity has not gone unnoticed in the biopharmaceutical industry with dozens of anti-inflammatory drugs under development at large and small companies alike. Many of these drugs are efficacious – but most are not suitable for chronic, every day use.

Synthetic, nature-identical astaxanthin, with its pharmaceutical-grade purity, mass-market scale, competitive pricing, efficacy, and safety we expect will solve these issues.

Thanks for reading and see you back here soon.

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