This article first appeared in Unlisted & Unlimited, The Edge Malaysia Weekly, on November 14, 2016 - November 20, 2016.

Furley Bioextracts Sdn Bhd is making the mangosteen famous, and not because of its taste. It has developed Spray 8, an all-natural, water-based, painless advanced wound and skin care product that uses mangosteen skin extract as its main active ingredient.

“The product is used to treat nappy and skin rashes in babies and children, as well as cuts and grazes, because it gives fast relief from pain and swelling. It also creates a conducive environment for severe or diabetic wounds to heal,” says technical director Kelvin Soo Quai Siang.

Due to its effectiveness, Spray 8 was one of four biotechnology finalists at the third annual World Cup Tech Challenge organised by the Silicon Valley Forum in May. The Silicon Valley Forum has fostered innovation, entrepreneurship and leadership in Silicon Valley for more than 30 years. It functions as a centre of knowledge and connections, covering everything from the latest tech trends to the start-up and investment ecosystem.

Although Furley Bioextracts did not win, it was the first Asian company to reach the finals in the biotech category. “We firmly believe in harnessing the incredibly nutrient-diverse qualities of the mangosteen, which we have been researching for six years,” says managing director Stuart Soo.

A superfood

Kelvin says there are several reasons the company chose to focus on the mangosteen rather than other tropical fruits. “The mangosteen has strong phytonutrients — [in other words,] high antioxidant content from phenolic compounds. It has very strong anti-inflammation activity and kills bacteria, including those that are antibiotic-resistant. We have been able to demonstrate its efficacy against gram-negative bacteria, which are known to be resistant to antibiotics.”

Traditionally, the mangosteen has been used to treat skin ailments and wounds. Stuart says dried mangosteen skin powder is popular as an effective folk remedy for treating skin problems, eczema, cuts, rashes and swelling. But until recently, there had been no clinical trials to determine its efficacy.

The mangosteen skin extract — DermaXan — is derived at its Current Good Manufacturing Practices (cGMP) factory in Selangor. The proprietary technology is designed to perform the extraction process with water while maximising active components and minimising waste. The process ensures the consistency and quality of the extract,” says Kelvin.

“DermaXan has remarkable antibacterial activity. It killed almost all strains of bacteria and antibiotic-resistant bacteria. We also tested for cytotoxicity to make sure that the product, if ingested, is not toxic, safe for the skin and does not have any side-effects [like synthetic drugs]. Then, we conducted further testing on anti-inflammation activity and found that it also reduces swelling, fast.”

The mangosteens are procured directly from villages. “We get contractors to harvest mangosteens from villages at a pre-agreed price per kg. This helps improve the quality of life in the village as every house will have two or three mangosteen trees,” says Stuart.

“According to the third National Agricultural Policy 1998-2010, the total acreage of mangosteen trees in Malaysia is estimated at 7,000ha to 8,000ha. This translates into millions of tonnes of mangosteens available.

“Our facilities can produce 20 million bottles a year and our equipment can fill 14 bottles a minute. Our extract is currently the only water soluble one in the market. Furthermore, it is proprietary and we have decided not to patent it because we do not want to make the extraction method known. Also, we have identified several new compounds and would like to study them.”

Although the biotech market is high risk, he believes it will bring high returns. “According to our in-house valuation, based on the potential market size, the intellectual property value of Spray 8 is US$300 million (RM1.2 billion) in the East Asian market, which includes China, Japan and South Korea. Hence, the potential for the Asean, India and Middle East markets is huge. Also, I believe that the poorer the country, the more it will need Spray 8 [as it is a cost-effective product],” he says.

“As the current market for wound care is US$18 billion, if a venture capital firm in Hong Kong were to invest a few million ringgit in our company and help us get listed in three years, the return on investment would be 20 to 30 times,” he points out, adding that the company’s profit margin is currently about 45%.

Furley does not just deal in mangosteen-related products. It is an award-winning biotech company that focuses on health and wellness products.

“In collaboration with research institutes, we have won numerous awards. In 2013, we won SME Corp Malaysia’s Best Innovation Award in biotechnology and bio-agrotechnology. In 2014, we received the best design award from the Malaysian Design Council. And this year, at the World Cup Tech Challenge, we were one of the four finalists,” says Stuart.

“Although we quit the competition circuit a few years ago, we have re-entered it to affirm our employees’ ability and standards as well as to give them recognition.”

The company chooses to focus on these industries because according to research by the Global Wellness Institute, a leading global research and educational resource for the spa and wellness industry, the global wellness market is now worth US$3.4 trillion. The sectors seeing the most significant growth since 2010 are healthy eating, nutrition and weight loss (108% increase to US$276.5 billion), preventive care and personalised health (78% increase to

US$243 billion), complementary and alternative medicine (65% increase to US$113 billion) and beauty and anti-ageing (51% increase to US$679 billion).

According to leading market research firm MarketsandMarkets, the global wound care market is currently worth US$19 billion while Global Industry Analysts says in a report that the size of the female hygiene market is US$15 billion. And the atherosclerosis market currently stands at US$192 billion, according to the National Centre for Health Statistics in the US.

Establishing Furley Bioextracts

Stuart has been in the biotech business for more than 30 years. “I was based in New Zealand and worked in Asia for a long time. I only came back to Malaysia about 15 years ago,” he says.

When his contract ended, he returned to Malaysia because he believed that the country’s rich biodiversity had not been fully tapped. “That is why I started Furley Bioextracts. I wanted to contribute my expertise to see what we could do in Malaysia,” says Stuart.

“The original purpose of this company was to commercialise local herbs into nutraceutical and cosmeceutical products, backed by scientific research and findings. This has remained our goal.

“Our main focus is to develop products that are effective and offer quick relief, targeting non-communicable diseases. Our products currently address wound care, feminine hygiene, osteoarthritis and arteriosclerosis. We have also developed a high anti-oxidant beverage.”

He established the company with a partner, whom he declines to name, in June 2006. Kelvin, his son, is in charge of laboratory work, technical matters and troubleshooting. Kelvin is also pursuing a doctorate in food technology at Universiti Putra Malaysia.

“I only take over when more complicated procedures are needed, for example, non-routine testing or customised testing. My other job is sales and marketing,” says Stuart.

Furley Bioextracts supplies 500 independent local pharmacies and exports its products to countries such as Ghana and the US. When Stuart started out though, he had to dig into his own pocket to fund the business.

“Fortunately, our government is very forward thinking in terms of biotech and we were one of the few to receive a Biotech Corp grant. Subsequently, the business was funded by internally generated funds, which we raised through product development, formulation and manufacturing for third-party companies on an original equipment manufacturing basis. We also managed to obtain soft loans from Biotech Corp and local banks for working capital,” he says.

“We are actively looking for equity investors to raise funds for the company to grow to the next level,” he adds. The company’s paid-up capital stands at about RM1 million.

Overcoming hurdles

Like any start-up, especially one in a challenging industry, Furley Bioextracts has seen its share of challenges. Perhaps the most onerous was regulatory, that is, registering and getting the necessary approvals for its products in its targeted export markets.

“Some approvals were fast, but some took a bit of time. It is part and parcel of this industry. So, we must have the stamina, the personnel to execute the compliance requirements and the patience to wait for approvals,” says Stuart.

But this was not all. Securing the necessary financing proved to be another major hurdle. “Borrowing from banks proved difficult as most banks in Malaysia prefer brick-and-mortar companies. They cannot do IP evaluations and do not have designated or trained people to value technology. It is my hope that in the future, banks would be willing to take on more risk,” he says.

Is it true that for start-ups to grow to the next level, they need to go abroad? “To a certain extent, yes. Unfortunately, Malaysia’s population is only 30 million. That is why you need to export [to a larger population such as China]. However, if you are focused on agriculture-based biotech, there is still potential to grow in Malaysia as we are the hub for Southeast Asian herbs. We also have enough expertise in manufacturing and have strong government support,” says Stuart.

Moving forward

Kelvin says Furley Bioextracts does not use genetically modified organisms (GMO) in its products. “This is because we are not sure of the impact GMO plants will have on the ground and ecosystem. But it is worth mentioning that mangosteens have yet to be genetically modified successfully. [Hence], it is good to know that the mangosteen you eat today is still what nature intended it to be.”

The company plans to launch a product made from daun kaduk, or Piper Sarmentosum leaves. “The product is for improving arteriosclerosis and osteoporosis. It has already received the necessary approvals from the Ministry of Health,” says Kelvin.

It is Stuart’s dream that every household will have a bottle of Spray 8 in its first aid kit. He also believes that since the product is affordable, it could help the government reduce the cost of national healthcare.

“I have visited a few government clinics, especially outpatient clinics, and found that the government spends RM200 on average per person to dress wounds. With our spray [which costs less than RM60], the patients could dress the wounds themselves at home. This will reduce manpower needs at the clinic as well, allowing nurses to attend to other patients,” says Stuart.