The entity says it will identify and advance new technologies to market, as well as operate external innovation programs for the global animal health industry.
Thomas Overbay, D.V.M., of Reliance who, along with Helmstetter, will serve as a Covenant board member and managing director, said the ongoing consolidation in the $26 billion animal health industry creates significant opportunity for Covenant. Overbay is founder of Expedite Animal Health, a business development and technical consultancy to the international animal health industry.
"Research and development budgets are tightening up across animal health firms," continued Helmstetter. "As a result, they will primarily fund projects with the largest revenue potential and lowest risk. We see a significant opportunity to develop products that address real market needs, but do not clear the internal development hurdles of large animal health companies. Covenant will quickly and cost effectively advance these assets and then match them with leading animal health manufacturers and distributors."
Brett Morris, CFA®, Principal with TechAccel, who led the Covenant deal, said the new venture is already working on projects for companion and production animal markets. Terms of the deal and the projects were not disclosed.
"The market is hungry for external product support," said Morris. "Covenant's thesis is to develop new products for approval by the appropriate regulatory agencies and sell those registrations to animal health companies. The industry is looking for ways to increase revenue and expand their product portfolio without consuming internal research and development dollars, and we intend to fulfill that need."
Covenant does not plan to market and distribute its own products to compete with animal health firms. Rather, the company will generate income via asset sales or licensing deals, Morris said.