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University of Minnesota startup to use birch bark in the production of drugs, cosmetics and supplements

January 15, 2013

Media note: To request high resolution images of Pavel Krasutsky and/or birch extractives, please contact John Merritt at jmerritt@umn.edu or Matt Hodson at mjhodson@umn.edu.

Take one of the planet’s oldest tree species, grow and harvest it sustainably, remove a waste product from its use in paper production, and what do you get? An environmentally sustainable source of natural chemicals for nutritional supplements, cosmetics and pharmaceuticals – and the basis for a startup company to bring them to market.

U of M startup The Actives Factory, based in Two Harbors, Minn., is applying patented processing methods to extract and synthesize naturally occurring chemicals in birch bark to manufacture pharmaceuticals, cosmetics, industrial products and nutritional supplements. Based on more than 15 years of development by Pavel Krasutsky, director of the Chemical Extractives Program at the University of Minnesota Natural Resources Research Institute in Duluth, these processing methods yield compounds proven to promote better human health.

Birch bark contains three compounds from which researchers aim to derive nutritional supplements, cosmetics, and pharmaceuticals: Betulin, lupeol, and betulinic acid. All contain anti-inflammatory properties which have been shown to reduce cholesterol and blood pressure, treat fungal and bacterial infections, stimulate the immune system, and more.

"The birch tree is the oldest of all species of trees and it grows in the most severe of climates," explained Krasutsky. "Over hundreds of thousands of years the birch has evolved to use chemicals to protect itself from bacteria, fungus, and viruses. Its first barrier of defense is its bark. Use of natural chemicals is well established in Europe and Asia, but use in the United States is just beginning to develop."

Although naturally derived products can be costlier to manufacture, Brian Garhofer, president and CEO of The Actives Factory, predicts demand will grow in some niches. As consumers become increasingly concerned with natural alternatives and environmental sustainability, he’s confident natural products may soon compete strongly with purely chemical derivatives in the personal care industry.

Scaling up the extraction process is the next step for the startup. The company plans to begin manufacturing products by spring of this year.

Birch bark is a waste stream by-product that can be obtained in large quantities from regional paper mills. The startup will obtain bark from sustainably managed and harvested resources in northern Minnesota and Wisconsin.

"We believe we have some products that are unique, in demand, and highly beneficial which come from a natural, sustainable, and renewable resource," says Garhofer. "What was once being burned is now being brought out for human health benefits."

Although these compounds hold promise for the development of new pharmaceuticals, The Actives Factory plans to first develop cosmetics and nutritional supplements.

The technology behind The Actives Factory was exclusively licensed to the startup by the Office for Technology Commercialization. The research was initially funded by the Potlatch Corporation, Minnesota Power, and the University of Minnesota.

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The mission of the Natural Resources Research Institute is to foster the economic development of Minnesota’s natural resources in an environmentally sound manner to promote private sector employment.

The mission of the University of Minnesota’s Office for Technology Commercialization is to translate University research into new products and services that provide growth opportunities for its licensees, benefit the public good, improve the quality of life and generate revenue to support the University's research and education goals.

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