A company in the East Cape is hoping to raise $5 million to fund the research and development of its mānuka oil products.

Manuka Bioscience has launched a public capital-raise of up to $5m, with private equity firm Snowball Effect to fund growth across the company’s multiple revenue streams.

Co-founder Stuart Cairns said Manuka Bioscience started out in 2016 producing honey, before realising that with mānuka oil it had room to “scale up” globally.

“It checked all these boxes and there was a big opportunity for it to grow,” he said.

Its website says mānuka oil is a therapeutic and cosmetic ingredient that is 1,000 times more effective than mānuka honey and 20-30 times more effective than tea tree oil against gram positive bacteria.

Cairns said the company looked at the tea tree oil market to see where the mānuka oil market soon could be.

“Tea tree oil has grown from an industry in the late 1970s where they produced about 10 tonnes a year to start with, to now producing 1000 tonnes a year,” he told BusinessDesk.

The company produces 10 tonnes of mānuka oil a year and Cairns is hoping it has the potential to follow tea tree oil’s example.

The company makes and markets ManukaRx and 3k+ skincare products and sells pure mānuka oil from its wholly-owned subsidiary Manuka Biologicals. 

It also has a pipeline of botanical medicines undergoing clinical and consumer studies.

Mānuka oil’s potency comes from naturally occurring bioactive compounds called β-triketones, which global scientific research has shown to have a medicinal effect in treating skin and wound infections, while reducing the growth of antimicrobial resistance (AMR).

“We’d like to do a lot more research on it as an antiviral, as there’s a particularly big market,” Cairns said.

The company is now spending between $750,000 and $1m a year on research. 

Cairns said it wants to raise at least $3 million, to help reach its revenue targets.

“The maximum amount just means we can do it more quickly, because it's all about feet on the ground in markets,” he said. 

“We can accelerate that growth with more capital.”

Snowball’s growth capital director, Matthew Linnecar, said Manuka Bioscience is a “leader” in its field.

“We are excited to give investors the opportunity to back a company on the cutting-edge of research and development into a native New Zealand plant and the commercialisation of its oil,” he said.

Cairns said Manuka Bioscience has two clinical trials in the works around mānuka oil and the treatment of eczema, which will be finished in March. 

The next step will be taking the results to larger pharmaceutical companies, so it can be distributed globally.