Forbes Medi-Tech's 1Q reflects full year results
recently reported full year 2004 results, with increasing sales of
its nutraceutical offset by deepening operating losses.
Sales for the quarter ended March 31 were up 46 percent over the prior year period, reaching C$4.60 million. Revenues generated by its phytosterols joint venture with Phyto-Source increased by the same percentage to $4.64 million.
But sales, marketing and product development expenses rose 28 percent to C$2.55 million, general and administrative expenses 58 percent to C$1.19 million and R&D expenses 131 percent to C$2 million - all of which contributed to a loss of C$1.95 for the period.
Net loss from operations increased from C$1.74 million in 1Q 2004 to $2.46 million.
The results show a clear dichotomy between the nutraceutical and pharmaceutical sides of the business, with the company thriving on the former but still striving success in the latter arena.
At the start of the quarter Forbes began shipping sterols to an undisclosed multinational ingredient company under a three-year US$24.4 million agreement in conjunction with Phyto-Source.
"Achieving our milestones in phytosterol sales and plant expansion has provided solid growth in our cholesterol-lowering ingredient business", says Charles Butt, president and CEO.
Butt also drew attention the gathering pace of Reducol, which was approved for use in Europe in seven new food categories. In addition to milk-based products, the cholesterol-lowering ingredient can now be added to yellow fat spreads (margarine), fermented milk type products, soy drinks, low-fat cheese type products, yogurt type products, spicy sauces, and salad dressings.
So far, however, only one Reducol-containing product has been launched in Europe: a yogurt marketed in Finland under Kesko's Pirkka brand.
The company's full year 2004 results published last month showed a 23 percent increase in sales over the previous year but heavy operating losses overall, increasing from C$2.15 to C$8.01 million, or from C$0.25 to C$0.09 per share.
Just as in 1Q, these losses were explained by increased R&D spend, particularly in pharmaceuticals. Most of the sales were said to have been generated by the nutraceuticals side of the business.
Forbes Meditech has said that based on the latest results it is maintaining its revenue guidance for 2005 for total revenue of C$21 to 22 million - a 20 percent increase over actual 2004. It expects to update this guidance throughout the year, as new product launches and contract negotiations come to fruition.
