Bioxyne’s acquisition of Breathe Life Sciences (BLS) gives it a new, readymade consumer-facing pathway, positioning the company for strong growth both in Australia and globally. 

Healthcare company Bioxyne (ASX:BXN) said it has entered into a new era of growth following the purchase of Breathe Life Sciences (BLS), with operations in Australia, UK, Europe, Japan, Southeast Asia, and the USA.

BLS is focused on new-pharmacopoeia alternative medicines, such as medicinal cannabis, MDMA, Psilocybin, and pre-pharmaceutical wellness solutions for businesses and direct to consumer.

The company includes the trademarked Dr Watson® brand, a market leader in CBD and mushroom products in the UK and Japan, where it is one of only a few CBD brands approved as a vendor to Amazon.

BLS is also a leading supplier of cannabis-derived raw materials and active pharmaceutical ingredients (APIs) globally.

The combined group now has operations across Australia, the UK, Japan, Europe, and Southeast Asia.

Its health and wellness product portfolio are vast including:

  • Health supplements
  • Skincare, probiotics
  • Cannabis-derived raw materials
  • Starting materials (THC flower)
  • Active pharmaceutical ingredients (APIs)
  • Cannabinoid-based therapies
  • Telemedicine tech and controlled substances licenses (cannabis, and from July 1, 2023, MDMA and psilocybin) in Australia.

Co-founded by new CEO Sam Watson

BLS was co-founded by Sam Watson, who after the acquisition is now the BXN co-CEO.

BXN purchased 100% of BLS through a share deal. BLS shareholders now own 66% of BXN.

“I got into the cannabis and alternative healthcare industry about five years ago, and the entry point for me was CBD in the UK and Germany,” Watson said.

“I saw the industry start to set off in Europe with massive growth.

“I started the Dr Watson® brand in the UK, and it went really well then we launched in Japan, which was quite an exciting development.”

The Therapeutic Goods Administration (TGA) in 2020 down-scheduled certain low dose CBD preparations from Schedule 4 (prescription medicine) to schedule 3 (pharmacist only medicine).

The decision allowed TGA approved low-dose CBD-containing products for use in adults, to be supplied over the counter by a pharmacist, without a prescription.

“The change in regulation in Australia in 2020 was the spark that lit the fire for us to get into the Australian market and build our medicinal offering,” Watson said.

Positioned for further TGA changes

In Australia, BLS holds licenses to import, export, wholesale Schedule 3, 4, and 8 controlled substances including medicinal cannabis and ketamine.

BLS is awaiting its TGA Pharmaceutical GMP inspection scheduled for September 2023,  allowing it to scale its existing production capabilities significantly.

From July 1, Australia medicines containing the psychedelic substances psilocybin and MDMA (3,4-methylenedioxy-methamphetamine) can be prescribed by authorised psychiatrists in Australia for treating certain mental health conditions.

Australia has become the most progressive country in the world in its approach to psychedelic medicines after the Therapeutic Goods Administration (TGA) approved psychedelic substances used in magic mushrooms and MDMA.

BLS also has licences to import post July 1 MDMA and Psilocybin, facilitating online patient consultations with psychiatrists under the authorized prescriber scheme and access to these alternative medicines.

Watson said there is still a lot of regulations in Australia in terms of CBD, cannabis and psychedelic medicines, but that can be a positive.

“What the TGA has done is put a very clear framework for companies to operate as medicinal cannabis and psychedelic companies, and this will benefit businesses like ours and the patients we serve,” he said.

“It is incredibly progressive but very regulated so it’s created an opportunity where if you have the right approvals, licences, the right IP and know how you can get into the market and develop these novel medicines for patients.

“The barriers to entry are high, and Australia is a launch pad to the global markets when it comes to these novel medicines.”

Leader in raw materials

While BLS has the direct-to-consumer Dr Watson® brand, the other main part of the business is raw materials (both pre-pharma and pharmaceutical).

“The business is divided into pre-pharmaceutical side and pharmaceutical side,” Watson said.

The company has developed close-knit relationships with cultivators and manufacturers of starting materials and APIs from the US, Americas to Europe, and Asia.

“Our clients save money and time when sourcing through us, relying on our global supply chain, quality and traceability mandate” Watson said.

BLS has accredited in-house production and distribution capabilities in Brisbane, Nagoya (Japan), Manchester (UK), and Prague (EU).

The company offers a wide range of white label and just-in-time (pharmacy) manufacturing and compounding needs from mushrooms, to CBD, to medicinal cannabis, to prescription ketamine and more.

“Our pre-pharma business is pretty much everywhere ex-Australia and it is a big contributor to our early-stage growth,” he said.

“Around 75% is B2B and 25% B2C, but B2C is growing rapidly and has grown about 250% so far this year.

Watson said their UK CBD products are the best in the market, and top sellers on Amazon.

“Though the greatest growth opportunity we have is in Australia, where our pharmaceutical operations are going to take us to the next level,” he said.

BLS Clinics: A Direct to Patient pipeline

BLS also has another arm to its business with BLS Clinics – an online healthcare practice operating in Australia that specialises in plant-based therapy, including cannabinoids.

BLS Clinics last year entered a deal with telehealth operator InstantScripts, which has been the source of media speculation of a takeover bid by conglomerate Wesfarmers (ASX:WES), eyeing an entry into the multibillion health and wellness sector.

“When a patient comes to that tech is powered by InstantScripts,” he said.

“We’ve done a deal with them to have access to their huge network of doctors, around 40 of which are special access scheme approved to prescribe cannabis.

Our goal is to streamline the process for our patients, and to make sure the Australian public have safe, secure, reliable access to these incredible alternative medicines.”.

InstantScripts has a network of over 600,000 patients in Australia.

Democratising healthcare as positions for growth

Listed on the ASX since 2000 BXN has a patented probiotic range, which sells well in the US along with other health and wellness products focused on Southeast Asia.

Watson said the potential synergies between the companies made them ideal bedfellows and they now have plans to grow rapidly with a much broader range of accessible markets and products.

The aggregated pro forma revenue for FY23 (ending June 30, 2023) is forecast at ~ $7.3 million, with the traditional Bioxyne business contributing approximately $2.4 million and the BLS group making up the balance of around $4.9 million.

The combined group result represents a roughly +40% increase on the prior year.

Watson said with strengthened management and international operations, the company looks forward to tremendous growth in the years ahead.

He said the company’s mission is to democratise healthcare and pharma to be a global leader in the manufacture and supply of novel medicines, healthcare and health-tech solutions and pioneer new age treatments and cures for both mental and physical disease.

“We’re exploring ways to expand patient access to medicinal compounds that cannot be owned or controlled by Big Pharma, such as THC, CBD, MDMA, and Psilocybin, with the goal of finding safer, more effective, and lower cost treatments than existing options,” he said.

This article was developed in collaboration with Bioxyne, a Stockhead advertiser at the time of publishing.

This article does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.