Norway-based Natural said on Friday that it is looking for a solution to spin-off its sales and marketing activities in the dietary supplements area after two long-term licensing deals, with Cognis for human applications and BASF for animal feed, got underway last year.
It will now concentrate on its activities as a licensing company, focusing on 'special lipids', or those with specific and well-documented effects, CEO Jostein Dalland told NutraIngredients.com.
Natural's sales and marketing apparatus was set up to demonstrate the commercial potential of CLA, or the fatty acid conjugated lineolic acid. Since its launch as an ingredient in 1996, sales have grown by an annual average of almost 50 per cent, according to Natural.
"In 1996 we were the sole company offering CLA and this continued for some years. We built the CLA market before licensing it out but now that we've reached our strategic goal it is time to return to the development activities," said Dalland.
Natural has developed an extensive patent portfolio that covers the main areas of application, product characteristics and production technology for CLA. Rights to many of these were licensed to leading health ingredients firm Cognis in August 2002, and in February 2003 it took over Natural's inventory of CLA and most of its customers to market the ingredient across Europe and the US.
Cognis is predicting strong growth for its Tonalin brand CLA, which launched a major campaign for the product, being marketed as a weight loss ingredient, last year. The weight loss segment in the US is huge and the company is also aiming to introduce the ingredient for food as soon as it gets regulatory approvals.
Cognis could also introduce the ingredient to its cosmetics customers.
The licence agreement, which runs until 2018, is royalty-based, with payments calculated as a percentage of sales of Tonalin. Royalty rates vary from middle single digit to low double-digit figures depending on the particular area of application for CLA, according to Natural.
Dutch firm Loders Croklaan also has rights to the Natural patents but this is limited to the dietary supplements area. Last year it released results of a study supporting the immune-boosting properties of its Safflorin CLA.
Aside from these, there are few other players in the CLA market. A 16-year agreement with BASF, the largest global player in animal feed ingredients, was signed in 2000 and takes care of the applications in the feed sector.
Natural said it has not yet taken any steps towards divestment of its sales arm, which also has exclusive rights to the vitamin K2 product Natto K2, developed by a Japanese company. The product has already been launched in Norway, Sweden, Denmark and Finland, and is now being introduced in the US market, but it will likely go with the sales and marketing activities.
The potential for new applications for lipids continues to grow with research showing almost on a daily basis the importance of fats in human health.