Pigment producing Exiguobacterium sp. GM010 demonstrates utilization of prawn carapace hydrolysate. Accordingly, our investigation was focused to produce cost effective bioactive pigment in 15L semi-commercial scale. Further acute and subacute toxicities were evaluated as per OECD guidelines for application as nutraceutical. The biomass and pigment extract yield were 28.76±1.78 and 0.82±0.04g/L, respectively, at 1.5L of aeration. The UV-visible spectrum of pigment showed absorption peaks at 357, 466, and 491nm indicating carotenoid like pigment. This was correlated with colour distribution in yellowish-orange region of CIE Lab spectrum. The qualitatively and quantitatively characteristics of pigment were similar between lab-scale and bioreactor production. The acute toxic dose (2000mg/kg bw) exhibited the toxicity as determined by haematological analysis. While subacute toxic dose (250, 500, 1000mg/kg bw) demonstrated no adverse effects on parameters such as food intake, body weight gain, vital organ weight, haematological and histopathological examination. Serum biochemistry results showed significant increase in HDL and decrease in SGPT values in treated groups compared to control. The results revealed that, Exiguobacterium sp. GM010 has efficiently utilised prawn waste to produce bioactive pigment. The dose of Exiguobacterium sp. GM010 pigment lower than 1000mg/kg bw can be regarded as safe.