Forbes Medi-Tech expects Reducol revenue leap
shows an anticipated increase in sales of its Reducol
cholesterol-lowering ingredient of up to 67 percent.
Based on contracted and forecast amounts of Reducol for sale in the dietary supplements and functional foods markets, between C$6 and C$6.4 m in revenue is expected for 2006 - plus an additional $1 m from licensing and interest.
Approximate revenue for 2005 (excluding licensing and interest) was $3.9 million.
The impressive growth spurt for the ingredient is as sign of the times where dietary measures are taking center stage in cholesterol management.
"International demand for Reducol has continued to build while initial product launches in Europe containing the cholesterol-lowering ingredient have been well received by consumers," said Charles Butt, present and CEO.
It also shows the Vancouver-based company has reached a stage where it can rely on its value-added ingredients over other operations. The guidance comes on the heels of the sale of its 50 per cent share in its unbranded phytosterols joint venture, Phyto-Source.
Forbes Medi-Tech's full year results are due out by the end of March.
Phyto-Source contributed around $17 m of the $21 m revenue for 2005. Even though Reductol is performing exceptionally, the sale of Phyto-Source is bound to make a dent in the short term.
A bold move, then, but the company is looking to its long-term future. When announcing the completion of the sale to former joint venture partner Chusei (USA), Butt said: "We believe that owning an interest in a sterol manufacturing facility is no longer critical to Forbes' business strategy of developing and marketing a continuum of products for the prevention and treatment of cardiovascular disease.">
"The completion of this transaction represents a significant step in strengthening our balance sheet and solidifying our position as a life sciences company dedicated to the prevention and treatment of cardiovascular disease.
"Moving forward, we will continue to build revenue from our value-added ingredient business with cholesterol-lowering Reducol at the forefront."
The US$25 m received for the sale will be devoted to the development of more branded nutraceutical ingredients, but details have not been released at this time.
The cholesterol-lowering drug code-named FMVP4 is currently in phase II trials, which are expected to complete in Q3.
