Canadian nutraceutical ingredient maker Forbes Medi-Tech has said that it may issue up to 25 per cent of its outstanding shares over the next year in a bid to raise cash for future investments. Shareholders at the company's AGM earlier this week approved the share issue, should the newly re-elected board consider it necessary in the future.
Forbes announced last November that it was seeking financing in order to secure necessary capital to achieve its short-term and long-term objectives. While no agreements have as yet been reached, Forbes said it hoped to raise C$3 million to C$5 million through equity financing.
"Taking into account anticipated revenues from sterol sales, this proposed financing should be sufficient to see the company well into 2003," said Don MacDonald, senior vice president and CFO. "This transaction is consistent with our stated goal of having a financing in place before the end of September. Terms of a financing will be announced once they have been finalised."
Shareholders at the annual meeting were told that Forbes' net revenues for 2001 were C$4.9 million, while sales for 2002 were C$6 million as of 27 June. Some 80 per cent of Forbes' 2001 revenue came from non-branded sterol sales, with the remaining 20 per cent generated from sales of the company's Reducol cholesterol-lowering product marketed by Pharmavite Corporation and Twin Laboratories in their dietary supplement products sold in the US.
Sales of Cholesterol Success, Twin Labs' cholesterol lowering supplement, and Pharmavite's Nature Made Cholest-Off are reportedly going well with both products being supported through national marketing campaigns, Forbes said. Twin Labs, for example, has national print and radio advertising campaigns already underway, with a TV campaign planned in five major markets towards the end of the summer. Pharmavite has also been marketing Cholest-Off aggressively with TV ads currently running on the ABC network in the US.
"We are seeing growing interest in wood sterols, which have the unique benefit of not being genetically modified," said Charles Butt, Forbes president and CEO. "Sterol supply contracts are presently being negotiated with major North American and international food manufacturers and we hope to conclude one or more of these deals in the coming weeks."
Meanwhile, for the dietary supplement market, Forbes has developed a proprietary cholesterol-lowering sterol formulation in a softgel capsule and a combination sterol/omega-3 fatty acids formulation. A clinical trial on these supplement products is currently planned for later this year, and Forbes is currently in discussions with two major pharmaceutical companies on licensing and partnering opportunities for these products.