ZIVO Bioscience, Inc. (NASDAQ: ZIVO) is a pioneering biotech and agtech research and development company dedicated to developing therapeutic, medicinal, and nutritional product candidates derived from proprietary algal cultures. The company's intellectual property portfolio includes proprietary algal and bacterial strains, biologically active molecules and complexes, production techniques, cultivation techniques, and patented or patent-pending inventions for applications in human and animal health.

One of ZIVO's key focus areas is the development of a non-antibiotic, immune-modulating product designed for the prevention and treatment of coccidiosis in broiler chickens. Coccidiosis is a protozoal disease that causes diarrhea, weight loss, decreased performance, and increased mortality in poultry, representing a significant economic challenge for the global poultry industry. The company estimates that coccidiosis costs the poultry industry more than $10 billion annually.

Business Overview

ZIVO's biotech division is focused on developing therapeutic and medicinal product candidates derived from its proprietary algal culture. The company's lead product candidate targets coccidiosis in broiler chickens, a disease that has been primarily treated with antibiotic- or ionophore-based products for decades with no significant new commercial technology introduced in the past 60 years.

ZIVO's agtech division is focused on the production and commercialization of its proprietary algal biomass as a functional food ingredient and nutritional enhancement for human and animal use, as well as a viable functional ingredient for skin care products. The company currently has contracts for the sale and production of its algal biomass, which is being grown in Peru.

Financials

For the fiscal year ended December 31, 2023, ZIVO reported annual revenue of $27,650 and a net loss of $7,777,184. The company's annual operating cash flow and free cash flow were both -$5,799,893.

In the first quarter of 2024, ZIVO generated revenue of $35,720, a significant increase from the prior-year period when the company had no revenue. However, the company continued to incur a net loss of $1,278,486 during the quarter. ZIVO's operating cash flow and free cash flow for the first quarter of 2024 were both -$1,699,118.

The company's financial performance reflects its ongoing investment in research and development activities, as well as the costs associated with building out its commercial operations. ZIVO's cash position as of March 31, 2024, was $138,641, which the company believes will not be sufficient to fund its operations for the next 12 months. As a result, the company will need to secure additional funding through public or private equity or debt financings, collaborations, or other sources to continue its operations and development activities.

Coccidiosis Treatment Development

ZIVO's lead product candidate is a non-antibiotic, immune-modulating treatment for coccidiosis in broiler chickens. In July 2024, the company announced the initiation of a 42-day confirmatory study targeting coccidiosis in collaboration with a major global animal health company. This study aims to further validate the efficacy of ZIVO's product in real-world commercial poultry production environments, building upon the positive outcomes of previous trials.

The study will compare the administration of ZIVO's product versus an ionophore-based treatment and versus an ionophore-based treatment combined with ZIVO's product. It will also evaluate the benefits of ZIVO's product combined with a coccidiosis vaccine versus administration without the vaccine. Results from the study are expected to be available in September 2024.

If the confirmatory study is successful, it could pave the way for the commercialization of ZIVO's coccidiosis treatment, which would represent a significant opportunity for the company. The global poultry industry spends more than $1.5 billion annually on coccidiosis control, primarily using decades-old compounds that industry and consumers alike want to replace due to the risks of developing drug resistance.

Algal Biomass Production and Commercialization

In addition to its biotech efforts, ZIVO is also focused on the production and commercialization of its proprietary algal biomass. The company currently has contracts for the sale and production of its algal biomass, which is being grown in Peru. ZIVO's algal biomass contains Vitamin A, protein, iron, important fatty acids, non-starch polysaccharides, and other micronutrients, positioning the product as a viable functional food ingredient and nutritional enhancement for human and animal use, as well as a functional ingredient for skin care products.

ZIVO has engaged an independent distributor, ZWorldwide, Inc., who has begun to sell the company's algal biomass, branded as ZivolifeTM, with an initial focus on the North American green powder food market. The company is also working towards building commercial-scale algae ponds using a proprietary design and plans to invest in full commercial-scale ponds and product processing equipment once it has successfully grown its algae at a penultimate scale.

Intellectual Property and Partnerships

ZIVO's intellectual property portfolio is a key asset for the company, comprising proprietary algal and bacterial strains, biologically active molecules and complexes, production techniques, cultivation techniques, and patented or patent-pending inventions for applications in human and animal health.

In addition to its collaboration with the major global animal health company for the coccidiosis treatment confirmatory study, ZIVO has also engaged in other strategic partnerships to advance the development and commercialization of its product candidates. These partnerships have the potential to provide additional funding, expertise, and market access to support the company's growth.

Risks and Challenges

ZIVO faces several risks and challenges that investors should be aware of. The company's ability to successfully develop and commercialize its product candidates is subject to regulatory approvals, which can be a lengthy and uncertain process. Additionally, ZIVO may face competition from other companies developing similar products, and there is no guarantee that its products will be accepted by the market or achieve the desired level of commercial success.

The company's financial position is also a concern, as it currently has limited cash resources and will need to secure additional funding to continue its operations and development activities. If ZIVO is unable to raise the necessary capital, it may be forced to curtail its business operations, including its research and development initiatives.

Outlook

ZIVO Bioscience is a promising biotech and agtech company with a diverse portfolio of product candidates and a focus on addressing significant market opportunities, such as the $10 billion coccidiosis market. The company's lead product candidate targeting coccidiosis in broiler chickens has the potential to disrupt a market that has been dominated by decades-old antibiotic- and ionophore-based treatments.

The upcoming confirmatory study in collaboration with a major global animal health company will be a crucial milestone for ZIVO, as positive results could accelerate the commercialization of its coccidiosis treatment. Additionally, the company's efforts to scale up its algal biomass production and commercialize it as a functional food ingredient and nutritional enhancement represent another avenue for growth.

Conclusion

While ZIVO faces financial and regulatory challenges, the company's innovative product pipeline, intellectual property portfolio, and strategic partnerships position it as a compelling investment opportunity for investors interested in the biotech and agtech sectors. As the company continues to execute on its development and commercialization plans, it will be important to monitor its progress and financial position closely.