Date: Sep 23, 2011 Source: Zacks Equity research (
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The world's leading manufacturer of consumer packaged foods, Procter & Gamble Company (PG - Analyst Report) inked a multiple project collaboration agreement with Baltimore, Maryland based biotechnology company Intralytix Inc. to develop a bacteriophage based technology for a range of applications.
The targeted bacteria are infected by a virus called bacteriophage. Bacteriophage therapy is generally used in different regions of Eastern Europe as a substitute to antibiotics.
Intralytix Inc. specializes in bacteriophage-based products used to control bacterial pathogens in environmental, food processing, and medical settings. The owner of products like ListShield, which is added to food for the prevention of dangerous diseases like listeriosis, has managed to achieve both Food and Drug Administration (FDA) and Environmental Protection Agency (EPA) approvals for its signature antibacterial drugs.
In June 2011, Intralytix finally got regulatory clearance from both the Food and Drug Administration (FDA) and the United States Department of Agriculture's Food Safety and Inspection Service (FSIS) for its phage-based EcoShieldfood safety product, effective against E. coli O157:H7 to be used on red meat intended for grinding.
The collaboration will boost P&G's already rich portfolio of antibacterial and products. The products range from anti-bacterial baby wipes to hand washes, dish soaps and detergents. The germ-control products have the expected efficacy against microbes and meet the local requirements where they are intended for use.
P&G follows the European guidelines for evaluating the efficacy of antimicrobial products. The product is then examined in the laboratory, using microbes in suspension, to assess their intrinsic biocidal potential. Upon a satisfactory result in the laboratory, the product is subjected to a more stringent test using microbes that are added to and then dried on the appropriate carrier surfaces. The company's ‘open innovation' strategy actively draws on ideas and technologies used for new and improved products of outside partners.
Cleanliness and hygiene has always been important for the company. Very recently, P&G made a commitment at the Clinton Global Initiative ("CGI") to provide clean drinking water to more than 2 million people in the Horn of Africa. The CGI was established in 2005 by President Bill Clinton, and it convenes global leaders to render innovative solutions to some of the world's urgent problems.
The initiative by P&G is a part of the non-profit initiative called ‘Children's Safe Drinking Water Program' (CSDW), running in full swing ever since 2004. CSDW has partnered with a diverse network of organizations to help distribute water purification packets in developing countries.
We are encouraged by the company's portfolio expansion, both through internal development and acquisition. However, P&G currently is facing high commodity cost inflation and severe competition from companies like Kimberly-Clark Corporation (KMB - Analyst Report) and Johnson & Johnson (JNJ - Analyst Report) in the Western European markets in both the blade and battery businesses.
P&G presently holds a Zacks #3 Rank, translating into a short-term Hold rating.
