Vernx Investor Update November 2018


Vernx co-founder and chief executive Dr Craig Patch discusses the company’s outlook with journalist Anthony Black.

Biotechnology company Vernx is making rapid strides towards commercialising its first product to improve gastrointestinal health.

The company’s branched fat patented technology platform will lead to the development of three distinct products with a focus on specific applications - dietary supplements, infant formula and pharmaceuticals.

Branched fats are a vital fatty acid found in human vernix caseosa and breast milk. It plays an important function in the developing infant gut epithelial, regulating immunity and seeding a healthy microbiota.

Dr Patch says any condition where the gut microbiota is disrupted, for example antibiotic, could benefit from branched fats. In addition, preterm infants and formula fed infants are deficient in branched fats, which has significant negative effects on gut health and immunity.


Dr Patch says Vernx Biotechnology will supply the global pharmaceutical, infant formula and supplements market with its proprietary branched fat active ingredients.

About two months ago, Vernx secured its first round of seed funding from investors outside founders Dr Patch and Sarah Crennan and scientific adviser Professor Tom Brenna. Vernx has since been engaged in a discovery program with Latrobe University and the University of Texas in Austin.

Dr Patch says Vernx is expecting to bring its products to market in the next 18 months.

“We’re definitely targeting the global market,” Dr Patch says. “We have a good baseline of scientific data to substantiate what we’re going forward with. We’ve selected the correct bacterium to ferment to make in to a product and we’re funded to take our first concept, which is a dietary supplement, to market.

“Our products have several potential market applications. So, for example, one application would be for adults endeavouring to recover the good bacteria in the gut after taking a course of antibiotics. Our product would help re-establish the microbiota.

“Also, our product would re-establish the good bacteria in the gut following a cleansing of the gastrointestinal tract for a procedure, say a colonoscopy.”

Dr Patch says substantial scientific evidence suggests a lot of gut diseases are due to a poor environment within the gut that promotes pathogenic bacterium. So the bugs cause disease and inflammation.

“What we’re doing is developing the food, or the nutrient base by which those good bacteria can feed on to produce a healthy gut environment” he says.

“Our products are revolutionary as there’s none like ours on the market. We’re taking the science in another direction. There’s no lipid product that is used as fuel for bacteria other than our product.

“Vernx Biotechnology was founded on the guiding principle of advanced living nutrition. Vernx was established to develop and commercialise a range of novel medical nutrition products.”

Vernx continues to develop its core branched chain fatty acid (BCFA), which is known to have positive effects on the infant gut and appears to provide significant protective prebiotic properties.


In his breakthrough proof of concept study, Professor Tom Brenna, from Cornell University in the US, has demonstrated that administration of BCFA can reduce necrotising enterocolitis in a rat model by 50 per cent compared to infant formula.

BCFA is naturally found in large quantities in Vernix caseosa that develops on the skin of the foetus in the last trimester. It’s now known that a large portion of the Vernix caseosa sloughs off and is ingested in utero. In fact, it is regarded as a baby’s first meal.


Vernx was founded on the vision to improve the health of premature infants. About 15 million babies are born prematurely each year, according to the World Health Organisation. Preterm babies have an increased incidence of gastrointestinal problems compared to term babies.

Dr Patch says it’s widely accepted that the best nutrition for premature babies is human breast milk for growth, development and reducing gastrointestinal diseases. Currently, there is a gap between demand and supply and Vernx’s objective is to fill this void.

“Over the next 10 years, there is predicted to be an explosion for human milk derived products for premature babies as well as nutritional interventions to eliminate gastrointestinal disorders such as necrotising enterolcolitis,” Dr Patch says.


Currently, the BCFA intellectual property licenced from Cornell is the core IP for Vernx. As the BCFA project moves forward, there are plans to file patent applications on the method of use as well as any composition of matter.

Investor update written by journalist Anthony Black, director of BlackMedia. Email: or 0418 54 3330

Craig Patch