Despite repeated health warnings about obesity, Americans are still more prone to cardiovascular disease than just about any other society on the planet. Intent on changing that trend, Europe’s largest chemical maker BASF (BASFY) is making great strides on bringing to market plant-based Omega-3 fatty acids well ahead of its competitors.
Since the FDA approved Omega-3 in 2004 (known as EPA/DHA in chemical terms) products containing the fatty acids have popped up on grocery store shelves around the world in an attempt by consumers to eat more heart-healthy. It’s already a $4 billion market in the United States with growth of more than 10 percent last year.
Now, new research shows that these “good” fatty acids can have positive effects on brain health, even reducing the risk of Alzheimer’s and the effects of depression.
Omega-3s are found in fish that eat algae, where the fatty acids originate. BASF and its competitors, including Dow Chemical’s (DOW) agrosciences unit, are hunting for a way to produce Omega-3s cheaply from plants.
BASF has developed a variety of canola that will produce oil with high DHA levels yet lower running costs. It would be better for the environment, with no scale-up investment cost and more efficient than producing the fatty acids from fish.
BASF recently told NutraIngredients-USA.com that it would be ready to bring these canola-based fatty acids to market in the latter half of the decade, after it finishes working though regulatory approvals. Dow, on the other hand, says it will be “a number of years” before its ready with its own version.
Sales and earnings for BASF were up by more than a quarter during its most recent reporting, which is expected to remain the trend when it reports again in late June. The company is focused on reducing its raw materials costs, which is in line with the expected results of its canola-based DHA. The company has long focused on supporting its R&D program and DHA is a key goal.
Morgan Stanley in early June raised its price target on BASF to 77 euros from 72 euros and has kept its overweight rating ahead of second-quarter reporting.
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