Fonterra takes deep breath with lactose product

Fonterra subsidiary Lactose New Zealand has signed an agreement with phamaceutical giant Glaxo Smith Klein to supply more than half of its annual requirements of inhalation-grade lactose.

The agreement coincides with the opening of a new $25 million lactose factory at Kapuni in Taranaki.

The specialist factory is the only New Zealand plant able to produce pharmaceutical lactose of such high quality that it can be inhaled.

Inhalation-grade lactose is an ultra-fine product used in next generation medical inhalers.

These provide alternatives to traditional drug delivery systems such as tablets and injections.

Active medical ingredients can be fixed to the fine lactose dust particles.

The inhalers allow the delivery of controlled doses and provide a more consumer-friendly alternative to injecting medicines that don't work in tablet form.

Inhalant-grade lactose is a relatively small but growing part of the US$100 million ($141 million) pharmaceutical lactose market.

The Kapuni factory has been specially built to meet the strict standards of the US Food and Drug administration. It will also produce tabletting-grade lactose.

Ferrier said Lactose New Zealand - the world's second-largest supplier of pharmaceutical lactose - would seek to develop partnerships with other leading pharmaceutical companies to supply the inhalation-grade lactose tailored to their requirements.

The two companies had developed a good working relationship over the last three years, said vice-president of GSK's new products and global procurement, Steve Bucksey.

Concerns about viral disease risk in the Northern Hemisphere reinforced the need for companies such as GSK to look for new, complementary sources of pharmaceutical lactose.