Neptune Technologies & Bioressources Inc.

Markets

An advantageous position in emerging markets
The originality of Neptune products stems from their bioactive substances and vast range of potential applications. This gives the Company an advantageous position in highly promising markets.

Nutraceutical products
First target market: nutraceutical products. As the first company to offer NKO™, the true krill oil that optimally contains all the naturally occurring bioactive ingredients like Omega-3 fatty acids (EPA & DHA) functionalised with phospholipids, esterified astaxanthin and a novel flavonoid. Neptune is advantageously and strategically positioned to penetrate this growing market.

This growth is based on a sustained increase in demand for products that are scientifically proven to help maintain optimum health, delay aging, improve the physical, mental and emotional quality of life and enhance normal and healthy brain and neurological function. The demand is particularly stimulated by baby boomers, who demand access to functional nutritional products to maintain health and vitality.

A study published by Burrill & Co estimated the global market for nutraceutical products at over US$128 billion in 2001 and noted a 7% increase over the previous year. The study also confirms that the United States is the largest market for such products.

NUTRACEUTICAL PRODUCTS Global Market 2003 (source: Datamonitor, 2004)
Country	% of market	in billions of US dollars
United States	35%	$ 44.7B
Europe	30%	$ 38.4B
Asia	26%	$ 33.2B
Other	9%	$ 11.5B
Total	100%	$ 127.8B

Nutrigenomics (Functional Foods)
The nutrigenomics products market can be defined as a division of the vast nutraceutical market. Nutrigenomics represents a new wave in nutrition research. It includes biomolecular development of functional foods, such as cereals, beverages,infant formula, dairy products, etc. that are fortified with vitamins or substances benefiting health. These products contribute to the prevention of chronic disease and genetic disorders. The development of this new science is based on greater knowledge of the human genomic code. It also depends on discoveries of new, natural bioactive substances and their favourable impact on human genes. Medicinal or functional nutrition will eventually play an essential role in prevention of disease, including cancer, diabetes, cardiovascular and neurodegenerative disorders.

Biopharmaceuticals
To approach the highly regulated biopharmaceutical sector, Neptune intends to enter into strategic alliances and partnerships with major manufacturers.

For the biopharmaceutical sector, marine oil extracts are an interesting avenue, as functional ingredients of medicinal creams, ointments and other medicines, oral and parental. It is essential for Neptune to master the unique compounds contained in its marine oils and their by-products. This will enable the Company to collaborate with biopharmaceutical manufacturers to perfect new formulas or to improve existing formulas.

Cosmetics
Cosmetic products are another major market. This industry's stakeholders are always looking for new ingredients and validated functional properties. The trend became very evident when companies sought to replace oils from land animals, in the face of concerns over the proliferation of "mad cow" disease, with marine and/or vegetable oils. Oils of marine origin, including NKO™, are very advantageous, since they are proven to be much more bioavailable for the human body than vegetable oils.

It is also interesting to note that the cosmetics industry uses large quantities of antioxidants, both for cosmetic purposes and to preserve products frequently exposed to air by users. Oil with high lipid and antioxidant content, like NKO™, offers moisturizing properties and can provide natural protection against oxidation. NKO™ is particularly well-suited for regeneration and protection from free radicals and environmental toxins.