Profits dip 11% at Swedish probiotic firm (sans Nestlé deal)

Pre-tax,half-year profits fell 11% to €4.54m at Swedish probiotics player BioGaia as distribution deals were modified or terminated.

But the company remained upbeat with deals blossoming under its new licensing arrangement for some of its probiotic strains with Nestlé.

Net sales for the half fell 3% to €18.63m, excluding the €50.8m Nestlé licensing deal signed in Q1.

“Earlier this year, as previously mentioned, we signed several agreements with Nestlé through which they have among other things obtained exclusive rights to use Lactobacillus reuteri in infant formula throughout the term of patent in order to guarantee their access to our component product in this area,” said president Peter Rothschild.

“One effect of this is that our reported sales of component products have decreased, although this has been offset by license revenue from Nestlé. Within the framework of these agreements, we have also initiated a distribution collaboration with Nestlé for some of our existing finished consumer products and a close partnership in development of new products related to Nestlé’s business.”

A new deal with Nestle-owned Huber in the US would promote the BioGaia brand in the US infant formula market.

In a company presentation, Rothschild said it would continue to invest in scientific studies, even if not all of them delivered the strongest results.