Forbes Medi-Tech's income improves
authorisation to sell its Reducol ingredients in the EU underlined
the continued growth of its nutraceutical business.
Last week Forbes gained authorisation to sell its Reducol ingredient for use in milk-based drinks in the European Union, with further food categories expected to follow shortly. Charles Butt, the company's CEO, said this was proof of the company's growing success in the third quarter.
"A major contract, notable increase in revenue and the recent EuropeanUnion approval underlie the continued growth of the company'snutraceutical business," said Butt. "This improvement in the company's fundamentals have provided a sound platform from which to further develop our pharmaceutical compounds, FM-VP4, FM-VA12 and FM-VP24".
The contract to which Butt was referring was the sterol sales agreement for $24.4 million for a three year period beginning in January 2005 between Forbes and a leading multinational ingredient company.
In terms of revenue, the company this week reported an increase from C$3.4 million for Q3 last year to C$5.4 million. This still translates into a net loss per share, albeit less than the year before at C$0.05 per share compared to C$0.07 for the same period last year.
The approval to sell Reducol in Europe will give Forbes significant opportunity to drive revenue growth, with plant sterol sales in Europe predicted by Frost & Sullivan analysts to grow at a rate of 15 per cent annually until 2010.
The European market approval represents a significant milestone for the small company, which is expecting the ingredient, extracted from by-products of the forestry industry, to sell well in the region owing to its non-GM status. Most other plant sterols are made from soy.
Last year Forbes began work to increase the capacity of its manufacturing joint venture, Texas-based Phyto-Source, by 50 percent, in anticipation of increased demand when it gained a positive opinion from Europe.
The company is planning to file a substantial equivalence notification letter with the EU commission to clear use of the ingredient in other food groups. It did not elaborate on which foods these would be. Without the requirement for scientific evaluation on use in additional food groups, notifications are expected to be cleared in a relatively short time.
The European market for products that fight cholesterol has seen rapid growth this year, following clearance from Europe's novel foods regulators for the use of plant sterols in a number of food categories.
Major yogurt maker Danone has also entered the scene, with marketing campaigns to support its Danacol yogurts and fermented drink set to significantly boost consumer awareness of the benefits of such products.
