Photos / Courtesy of companies
From left, PhytoSmart CEO Deena Sisitsky and Cellana CEO Martin Sabarsky.
Updated: November 5, 2024
Brunswick pet-health startup to be acquired by San Diego biotech
File Photo / Jim Neuger
PhytoSmart Inc., a Brunswick biotech startup, is merging with Cellana Inc., of San Diego. Shown here is PhytoSmart's operations director, Patrick Cregten, at the firm's TechPlace base.
Brunswick-based PhytoSmart Inc., which makes an algae-derived "superfood" for pets, plans to join forces with Cellana Inc., a San Diego company.
Under an agreement announced last week, PhytoSmart will become a wholly owned subsidiary of Cellana, which also specializes in algae-based bioproducts. PhytoSmart is based at the TechPlace business incubator and shared manufacturing facility at Brunswick Landing.
Terms of the agreement were not disclosed.
The tie-up, which does not require regulatory or shareholder approvals, is expected to close before the end of the year or during the first quarter of 2025, according to Deena Sisitsky, PhytoSmart’s co-founder and CEO.
Upon closing, Sisitsky will join Cellana’s board of directors and lead the consumer products activities for the combined entity under the PhytoSmart brand name.
She said that talks between the two companies began last year over a number of strategic initiatives designed to boost sales of PhytoSmart’s initial product. It's a pet supplement containing DHA, an algae-derived omega-3 fatty acid, touted on the company's website as specifically beneficial for eye health.
“Very quickly, it became clear that an even better way to expand PhytoSmart’s sales and deliver truly disruptive pet and human supplement products was to augment PhytoSmart’s initial product concept with the other high-value marine omega-3, which is EPA,” she told Mainebiz.
“As talks progressed, the complementarities between the two companies and enthusiasm for leveraging these in a combined company became apparent to management as well as key investors of both companies.”
Martin Sabarsky, CEO of Cellana, estimates the total addressable market for pet supplements alone at more than $2 billion globally, and the market for omega-3 supplements for humans at more than $8 billion.
"Our combined company's ability to deliver vegan, sustainable, whole algae, non-GMO, non-fish-based omega-3 supplements represents a potential game-changer in the pet and human supplement sectors alone," he said.
Growth and exit plans
All six employees of PhytoSmart will retain their current positions after the merger takes effect.
By the end of 2025, the combined company should have more than 20 full-time employees, “as human supplement sales come online following anticipated FDA approval for human consumption,” Sisitsky said.
By joining forces, the companies say, they can accelerate development of a portfolio of sustainable, nutrient-rich, energy-efficient products that meet growing global demand for clean, non-GMO, plant-based products.
“Depending on the pace of pet supplement sales growth in 2025, the timing of FDA approval for human supplements, and the pace of human supplement sales growth in 2026, the combined company would expect to reach profitability on a go-forward basis sometime in 2026,” Sisitksy said.
Once the combined entity becomes profitable or nears that point, it will be well-positioned to consider going public via a traditional public offering or a different mechanism such as an acquisition by a publicly traded Special Purpose Acquisition Company, or SPAC, she noted.
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