Aqua Bounty: Case Analysis

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Aqua Bounty is a firm that entered the Chilean market in a controversial way due to its use of genetically modified (GM) fish in animal cultivation. Despite the efficacy of this technique in raising production, mainstream ideas had not embraced it. The company developed solutions to prevent commercial-armed shrimps from bacteria and viruses, which contributed to all of its revenue in 2005. However, regulatory delays have prevented the commercialization of the core business, causing a delay in positive net income. The GM fish could double production without increasing capital investment, making it a potentially lucrative market. The shrimp industry is also a large market to pursue. Challenges include FDA approval, repeated net losses, and concerns about safety to humans and the environment. The company needs additional funds, and a European listing is more attractive than a US listing.

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Although it made progress in entering Chilean market in that year, this firm soon became controversial because Of the property Of genetically modification. This technique had not been embraced in animal cultivation by mainstream ideas, despite of its amazing efficacy in raising production of commercial fish. The pivotal approval by FDA was expected to come for another 18 month, with a lot of uncertainty, hence an additional try on shrimps. Hard work pays off. Solutions (Shrimp IMS and anti-virus drug VPX) were developed to prevent commercial- armed shrimps from bacterias and a specific kind of virus.

This pipeline of Shrimp IMS was built by Aqua Bounty in 2005 and then contributed to all of its revenue in 2005. The core business that has huge potential application prospect once commercialized, is still delayed due to regulatory, so does positive net income. The company also needs additional capital for further investments over the coming years. The actual time of approval for genetically modified product lines is yet still uncertain. In order to maintain its peration and to fund its investments, Aqua Bounty made the right decision to IPO, rather than raise fund among small private placements.

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Merits The genetically modified (GM) fish could reach marketable size in about half the time of standard fish, which allows farmers to double production without increasing the size of farm or capital investment. This property would beat any other competing strains in current market, if announced to be harmless to human by FDA. Commercial fish farming industry has generated nanual revenues of over IJS$6 billion by 2006, and is growing at over 5% a year. Once this GM salmons allowed in the market, they will bring rapid increasing market share and enormous profit for Aqua Bounty.

Another kind of aquaculture, Aqua Bountys shrimp therapeutics, protects shrimps in commercial farms from pernicious disease in two ways, by boosting the immune system to general disease-resistance of shrimps, and by designing specifically to prevent shrimps from developing the most commom and virulent virus. These treatments definitely dominate the existing antibiotics prevention. The shrimp industry has also seen great expansions since the 970s. It is now esmated to be a global industry worth over US$IO billion, which is quite a hugh market to pursue.

Small scale manufacturing in some other countries have shown significant fruition. Challenges The firm has spent over 10 year on GM research and experiments, and approval by FDA is still yet to be awaited. This firm has experienced a 5-year repeated net loss and is in urgent need of additional funds now. Concerns about safety to human as well as to evironment are widely shared by consumers in target markets. Listing in US stock exchanges would be too nerous for a relatively small-cap company, therefore, a European listing becomes more attractive.

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Aqua Bounty: Case Analysis. (2017, Jul 18). Retrieved from

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