BioGaia enters Australian market
agreement with leading Australian supplement company Blackmores,
likely to help sustain the large increase in sales for the first
quarter after a similar agreement in Japan.
Swedish firm BioGaia has signed an exclusive distribution agreement with leading Australian supplement company Blackmores.
Blackmores, with sales of around A$80 million, will sell BioGaia's Reuteri tablets, based on the lactic acid bacterium Lactobacillus reuteri, in Australia and New Zealand through pharmacies and health food stores under its own trademark, from the beginning of next year.
The Reuteri tablets are also being sold by BioGaia in Japan, Spain, South Africa, Korea, USA, Sweden and also launched in Norway at the beginning of the month.
"It is encouraging that sales of the tablet is starting to pick up speed in various countries and that we are seeing increased sales of a finished product that we have developed ourselves. Negotiations are also underway for other markets," said Peter Rothschild, president of BioGaia.
The firm also released results for the first quarter, with net sales up 167 per cent to SK 11.2 million over the preceding year excluding the sold operations in Fermentation. This is mainly due to sales of tablets to Erina in Japan ahead of the launch in March, said BioGaia. Including the sold Fermentation operations, there was a decrease of SK 2.3 million compared with the preceding year.
The operating result improved by SK 4.0 million to SK -5.9 million, while net result was SK -2.1 million, an increase of SK 7.6 million compared with the previous year.
In the first quarter, the company's first order from South Korea for Reuteri tablets and Reuteri culture for the manufacture of infant formula marked an important step given the strength of the market for probiotic products in Asia, where there is a high awareness of the importance of the gastrointestinal tract for general health.
There was also an agreement with Nature's Sunshine Products for the sale of Reuteri tablets via multi level marketing in the US. It is hoped that this will boost sales in the US, which have not met company expectations under a marketing agreement with McNeil, primarily via food stores. BioGaia has discontinued tablet sales to McNeil, but will work with the firm and others on a clinical study on patients suffering from IBS (Irritable Bowel Syndrome) during 2003.
Gross profit for the quarter amounted to SK 7.5 million, an improvement of SK 4.0 million compared with the same period of 2002, or excluding the sold operations in Fermentation, gross profit rose by SK 4.8 million.
The operating result was SK -5.9 million, an increase of SK 4.0 million over the corresponding period of 2002. Excluding the sold operations in Fermentation, the operating result improved by SK 2.6 million. This is explained by a higher gross profit. Research and development expenditure was up by SK 1.9 million, mainly due to a decrease in capitalised development expenses. The period's capitalisation of development expenses amounted to SK 1.3 million, compared with SK 4.5 million in the corresponding period of 2002 excluding BioGaia Fermentation.
The net result was SK -2.1 million, which is SK 7.6 million better than in the corresponding period of last year. Financial items include a reversal of guarantee provisions amounting to SK 2.7 million. Excluding the sold operations in Fermentation, the net result improved by SK 6 million.
While human health accounts for 99 per cent of the firm's sales, it is also hoping to receive approval for at least one animal species during 2003.
