Medical channel issues BioGaia healthy profit diagnosis

By Shane Starling

- Last updated on GMT

Related tags: European union, Medicine

Medical channel issues BioGaia healthy profit diagnosis
Profits have surged 60% at Swedish probiotics player BioGaia as its focus on the medical channel sees its business growing in all markets, with Italy and Japan gaining special mention.

President Peter Rothschild told NutraIngredients this morning that the company was “extremely happy” ​with the results that come at a time when probiotics are encountering a challenging period regulation-wise in the European Union, with claims under the microscope like never before.

But with half year pre-tax profits of €6.3m – 60% up on the first half of 2010 – on sales of €17.4m (up 39% excluding foreign exchange fluctuations), the company’s predominate strategy to develop products and probiotic formulations for the medical profession was paying dividends.

“We have done particularly well in Italy where the market is very competitive but that suits us because of the clinical data backing our products and strains,” ​Rothschild said. “Italy is an old established market for probiotics in the medical field so in a way we don’t have to sell the product concepts, we just show the medical professionals the clinical data and usually that is enough for them to support the products.”

While BioGaia sells its strains to Italian brands, it also has its own brand in other markets like Japan, where a product marketed with oral health benefits has been performing strongly for around 18 months.

It has also benefitted from long-term contracts with the likes of Nestlé and other infant food makers.

EFSA effect

Like almost every probiotics player, the company has had claims rejected by the European Food Safety Authority (EFSA), but it said the rejections had, “not affected us in the slightest”​ as the company, “did not do consumer data”.

“We can show the clinical data to the doctors and they can decide for themselves. But we continue to invest in new science and may submit other claims to EFSA at a later date.”

The company was encouraged by growth in emerging markets with latin America and the Middle East performing well, and a new deal just inked in Morocco, although it was being held back in China by an elongated regulatory approval process.

“It’s a 1.5-2 year process typically,” ​Rothschild said.

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