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Single-molecule drug discovery is not a new concept. Just take a look at prescription drugs. To sum it up - big pharma spends the big bucks to find “the molecule” that does what they want. And then once one of these drugs goes off patent, other companies tweak this molecule a tiny bit to get a not-so-tiny piece of the pie. It is really a pretty brilliant concept, but it will cost you close to $1 billion to bring a new drug to the market in today’s world.

These days, however, single-molecule drug discovery is no longer limited to prescription drugs. With all of the blockbuster drugs invented for some of the world’s most prevalent conditions, the focus (aka. the money) is being diverted into a less stringently controlled market: OTC (over-the-counter). The rules in this arena are simple – as long as nobody gets killed or seriously injured by your product, you can sell it. Efficacy need not be proven on any level. The fact of the matter is, however, that there are plenty of OTC products out there that work and have been extensively studied. On top of this, you will not have to shell out 10-figures to develop it.

What does this mean for NutraCea (NTRZ.OB)? Well imagine - you have patented processes that use your nutritional supplement (stabilized rice bran) to treat hypercholesterolemia, hyperlipidemia, atherosclerosis, diabetes, hyperglycemia, hypoglycemia, joint inflammation, pain, and loss of mobility. These are some of the world’s most prevalent conditions. Now say – you take some of your stabilized rice bran [SRB] and you analyze it just like big pharma does to make molecules like big pharma does using single-molecule drug discovery. You find that the cholesterol-lowering effects of SRB are due to molecule A that are naturally present in your SRB. Very excitedly you patent the molecule, or the process you used to extract it. Now what? You have a couple options:

  1. You take as much SRB as you can and extract as much molecule A as you possibly can and you sell it somehow (pill, capsule, powder) with a drug developer.
  2. You let the makers of prescription drugs use molecule A as an excipient in their pharmaceutical grade compounds to help promote its cholesterol-lowering ability
  3. You hire somebody to make molecule A industrially and sell it in mass.
  4. You license out the technology you used to get molecule A to anyone that wants to use molecule A for themselves.

Any option leads to potentially significant revenues, and NutraCea is doing this now. They have partnered with Herbal Science, a leading developer and producer of functional ingredients derived from natural sources. One of their two joint ventures, RiceRx LLC, is specifically devoted to “mining NutraCea’s proprietary Stabilized Rice Bran for single molecule drug discovery for licensing or sale to late-stage life science and pharmaceutical companies.”

Keep a watch out for specific announcements relating to this niche. It could very well spell success for shareholders.

Disclosure: Author holds a long position in NTRZ.OB

Source: NutraCea: Running With the Big Boys