Fourth quarter and preliminary results 2002
05.02.2003 - Nutri Pharma ASA (OSE: NUT) today announced that as a result of its JV with Nycomed Pharma revenues grew by 223% from NOK 15.9 million in 2001 to NOK 51.3 million in 2002 while the operating result has improved from NOK –160.5 million to NOK –80.9 million....
Oslo/Amersham, February 5, 2003
FINANCIAL SUMMARY – FOURTH QUARTER RESULTS 2002
Nutri Pharma ASA and subsidiaries had total revenues of NOK 51.3 million in 2002, up from NOK 15.9 million the previous year. Net sales revenues are generated from the joint venture with Nycomed, Nutrition Partners AS, which is pro rata consolidated on a 50% basis from January 1 2002. Nutri Pharma’s share of revenues from Nutrition Partners in 2002 was NOK 38.9 mill. Nutrition Partners had revenues of NOK 77.8 million in 2002 on a 100% basis. In 2001 the sale of Nutrilett® in the Nordic countries amounted to approximately NOK 43 million. Excluding Nutri Pharma’s share of revenues from Nutrition Partners, revenues declined from NOK 15.9 million in 2001 to NOK 12.5 million in 2002.Royalty revenues were mostly generated from the license agreement with GNC in the North American market. The decline in royalty revenue from NOK 14.3 million in 2001 to NOK 10.8 million in 2002 is mainly a result of lower sales for Scan Diet™ in the US and strengthening of the NOK vs the USD. The sale of Scan Diet™ in the US market declined from USD 13.7 million in 2001 to USD 11.2 million in 2002 (18% decline) and royalty revenues declined from NOK 12.2 million in 2001 to NOK 8.9 million in 2002 (27% decline).Operating expenses declined from NOK 176.3 million in 2001 to NOK 132.2 million in 2002. Excluding Nutrition Partners, operating expenses declined from NOK 176.3 million in 2001 to NOK 89.6 million in 2002, or by 49% as a result of the cost reduction programme, which was implemented during 2002.The operating result improved from NOK -160.5 million in 2001 to NOK -80.9 million in 2002. The operating result for 2002 is below target, as the commercial development has taken longer than planned. Interest income from the investment portfolio resulted in net financial income of NOK 14.3 million in 2002. Net result after financial items was NOK -66.6 million. Net income improved from NOK -133.1 million in 2001 to NOK -66.6 million in 2002.Operating cash flow was NOK -55.2 million in 2002. The negative operating cash flow from operations was mainly financed through sale of certificates.Nutri Pharma’s total assets were NOK 260.3 million as of December 31 2002 compared to NOK 339.3 million as of December 31 2001. Cash and other liquid assets were NOK 221 million – or 85% of the company’s total assets. The liquid assets are invested in short-term money market instruments with low risk profile.As of December 31 2002 the company’s total equity was NOK 242.2 million or 93% of total assets. Nutri Pharma has no interest bearing debt.Unrestricted equity in the parent company Nutri Pharma ASA was NOK 0 million as of December 31 2002. The Board of Directors’ intend to propose to the Annual General Meeting that remaining share premium reserve of NOK 252.8 million is transferred from restricted equity to unrestricted equity.COMMERCIAL UPDATE
The 50/50 joint venture with Nycomed Pharma A/S, the distributor of Nutrilett® in the Nordic region became operational on January 1 2002. The combination of Nutri Pharma’s scientific expertise and Nycomed Pharma’s strong sales, distribution and marketing network in the jointly owned company, Nutrition Partners AS, succeeded in increasing sales both through growth in existing products and markets and through geographic expansion to Denmark. However, the cost of expansion resulted in a loss of NOK 7.9 million for Nutrition Partners in 2002. The negative financial result for Nutrition Partners is not satisfactory.In 1999 Nutri Pharma entered into a royalty based sales and distribution agreement with General Nutrition Centers, Inc. (GNC) leading to the launch of Scan Diet™ in the North American market in May 2000. GNC markets and sells a full range of Scan Diet™ products including powder, ready-to-drink and bars. While Scan Diet™ is a well-established brand, sales have not developed as expected. During 2002 GNC went through restructurings, and internal marketing restrictions within GNC have reduced the brand’s exposure to the consumer.In July 2001 Nutri Pharma signed an agreement with Mayne Health (formerly Faulding Healthcare Pty Ltd), a leading Australian health care group with corresponding strong presence in New Zealand, and in January 2002 Mayne Health launched its first line of Nutri Pharma weight reduction products under the brand of Nutriplan™. In October Nutriplan™ was also launched in New Zealand and the product range was extended to include bars and tubs in both countries. Mayne has invested in the brand with significant TV campaigns. The co-operation with Mayne Health is royalty based.R&D AND INTELLECTUAL PROPERTYNutri Pharma, an international leader in patented soy technologies, has the best documented natural products for weight management and cholesterol reduction based on its proprietary technology combining soy proteins, phospholipids, and fibers. The Company represents the most profound knowledge and clinical documentation of soy in humans – more than 40 clinical and pre-clinical trials have been performed, many to the same high GCP standards as the pharmaceutical industry.In 2002 Nutri Pharma invested NOK 16.4 million in R&D, intellectual property and product development, down from NOK 41.6 in 2001. These figures only relate to direct external costs and do not include indirect costs such as personnel. These investments are expensed when incurred. The company’s scientific and intellectual property position was considerably strengthened during 2002 and research conducted during the year has resulted in several important breakthroughs that will further strengthen Nutri Pharma’s IP platform going forward. With the strong IP platform and know-how now developed, future investment in R&D will be more focused.A number of clinical trials were performed during 2002 to demonstrate the efficacy of Nutri Pharma’s weight-management and cholesterol lowering products as well as their superiority compared to the competition. These results will be presented at scientific meetings in 2003 and submitted for publication.Nutri Pharma has also specifically investigated the superiority of Abacor versus the best commercially available soy protein, the long-term effects of Abacor, and the synergistic effects of Abacor combined with statins. These results documented further strong evidence that Abacor is the most effective natural cholesterol lowering product/ingredient on the market.Nutri Pharma’s IP position internationally is founded on 12 patent families with approximately 1000 patent claims. The patents protect and reinforce the USPs of Abacor® and the Nutrilett®, ScanDiet™ and Nutri Plan product ranges in all major international markets. These cover Nutri Pharma’s patented soy technologies combining soy proteins, phospholipids, and fibers in order to treat and prevent diseases associated with the metabolic syndrome, as well as composition and process patent applications of newly developed isolated soy proteins. The value of these patents was confirmed through the filing of an opposition by Protein Technologies International Inc., a subsidiary of DuPont, in November 2001 against one of Nutri Pharma’s patents granted by The European Patent Office. On 18 September 2002 Nutri Pharma filed a response to the opposition and will continue to vigorously defend this patent. The timing of a final decision on this opposition is uncertain.Abacor® has been documented as being the most effective soy composition to lower cholesterol and Nutri Pharma is evaluating to expand its Abacor® brand into areas where soy has other proven health benefits, e.g. for female health, heart health, type 2 diabetes and sports nutrition. During 2002 Nutri Pharma’s continued product development activities have resulted in prototype savoury, bar and ready to drink products incorporating the Abacor® blend. These prototypes, developed in collaboration with companies such as Tetra Pak, will be used to demonstrate the potential for the Abacor® formula with both existing and potential partners.OUTLOOK
With the unique scientific and intellectual property position Nutri Pharma has developed and secured over the last two decades, the Company is today an international leader within the growing field of soy and is in a better position to commercialise its strong IP platform.Nutri Pharma will continue to pursue the current business model of generating revenue through license agreements with a focus on both strengthening and expanding the business potential for the Company’s dietary products based on the technology within the Nutrilett®, Scan Diet™ and Nutriplan™ brands. At the same time more resources will be directed towards the commercial development of Abacor®, both into dietary supplements and functional foods. In light of the unsatisfactory commercial performance the Board is currently also evaluating other business models including strategic partnerships related to the intellectual property.Measures to reduce costs to be largely in line with revenue expectations have been implemented and the effect of these measures will be seen in 2003. It is however unlikely that the Company will be able to achieve its previously targeted cash break even in 2003. This is mainly due to the uncertainty related to Scan Diet™ sales in the US.Under the Norwegian Securities Trading Act, the Board of Directors' of Nutri Pharma is required to make a statement regarding Lars Høie's mandatory offer for all the outstanding shares in Nutri Pharma within one week of the expiry of the offer. The Board will make such statement within the allowed timeframe.Oslo Feb 4, 2003
Nutri Pharma ASA (OSE: NUT) today announced that as a result of its JV with Nycomed Pharma revenues grew by 223% from NOK 15.9 million in 2001 to NOK 51.3 million in 2002 while the operating result has improved from NOK –160.5 million to NOK –80.9 million. Fourth quarter revenues grew from NOK 3.5 million fourth quarter 2001 to NOK 10.8 million in fourth quarter 2002.
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All figures in NOK 1000 |
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INCOME STATEMENT |
Q4 2002 |
Q4 2001 |
2002 |
2001 |
|
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||||
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Total revenue |
10 757 |
3461 |
51263 |
15874 |
|
Total operating expenses |
33 204 |
65 767 |
132 155 |
176 357 |
|
Results of operations |
-22 448 |
-62 306 |
-80 892 |
-160 483 |
|
Total financial income and expenses |
3 276 |
5 899 |
14 307 |
27 567 |
|
Ordinary profit before taxes |
-19 171 |
-56 407 |
-66 586 |
-132 916 |
|
Tax on ordinary results |
|
233 |
|
233 |
| Results of the year |
-19 171 |
-56 640 |
-66 586 |
-133 149 |
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BALANCE SHEET |
30.9.2002 |
30.12.2002 |
31.12.2001 |
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Total long term assets |
29 170 |
26 051 |
31 071 |
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Total current assets |
242 663 |
234 251 |
308 269 |
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Total assets |
271 833 |
260 301 |
339 340 |
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Total equity |
261 289 |
242 171 |
309 959 |
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Total liabilities |
10 544 |
18 130 |
29 381 |
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Total equity and liabilities |
271 833 |
260 301 |
339 340 |
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- 211% growth in fourth quarter revenues compared to fourth quarter 2001
- Operating expenses declined 49% in fourth quarter compared to fourth quarter 2001
- Operating result has improved from NOK –62.3 million to NOK –22.5 million
- 223% growth in preliminary 2002 total revenues compared to 2001
- Operating expenses declined from NOK 176.4 million in 2001 to NOK 132.2 million in 2002
- Operating result has improved from NOK –160.5 million to NOK –80.9 million
- Total assets were down to NOK 260.3 million as of December 31 2002 compared to NOK 339.3 million as of December 31 2001
- Cash and other liquid assets were NOK 221 million – or 85% of the company’s total assets
- Investments in R&D, intellectual property and product development was down to NOK 16.4 million in 2002 compared to NOK 41.6 in 2001
Nutri Pharma ASA and subsidiaries had total revenues of NOK 51.3 million in 2002, up from NOK 15.9 million the previous year. Net sales revenues are generated from the joint venture with Nycomed, Nutrition Partners AS, which is pro rata consolidated on a 50% basis from January 1 2002. Nutri Pharma’s share of revenues from Nutrition Partners in 2002 was NOK 38.9 mill. Nutrition Partners had revenues of NOK 77.8 million in 2002 on a 100% basis. In 2001 the sale of Nutrilett® in the Nordic countries amounted to approximately NOK 43 million. Excluding Nutri Pharma’s share of revenues from Nutrition Partners, revenues declined from NOK 15.9 million in 2001 to NOK 12.5 million in 2002.Royalty revenues were mostly generated from the license agreement with GNC in the North American market. The decline in royalty revenue from NOK 14.3 million in 2001 to NOK 10.8 million in 2002 is mainly a result of lower sales for Scan Diet™ in the US and strengthening of the NOK vs the USD. The sale of Scan Diet™ in the US market declined from USD 13.7 million in 2001 to USD 11.2 million in 2002 (18% decline) and royalty revenues declined from NOK 12.2 million in 2001 to NOK 8.9 million in 2002 (27% decline).Operating expenses declined from NOK 176.3 million in 2001 to NOK 132.2 million in 2002. Excluding Nutrition Partners, operating expenses declined from NOK 176.3 million in 2001 to NOK 89.6 million in 2002, or by 49% as a result of the cost reduction programme, which was implemented during 2002.The operating result improved from NOK -160.5 million in 2001 to NOK -80.9 million in 2002. The operating result for 2002 is below target, as the commercial development has taken longer than planned. Interest income from the investment portfolio resulted in net financial income of NOK 14.3 million in 2002. Net result after financial items was NOK -66.6 million. Net income improved from NOK -133.1 million in 2001 to NOK -66.6 million in 2002.Operating cash flow was NOK -55.2 million in 2002. The negative operating cash flow from operations was mainly financed through sale of certificates.Nutri Pharma’s total assets were NOK 260.3 million as of December 31 2002 compared to NOK 339.3 million as of December 31 2001. Cash and other liquid assets were NOK 221 million – or 85% of the company’s total assets. The liquid assets are invested in short-term money market instruments with low risk profile.As of December 31 2002 the company’s total equity was NOK 242.2 million or 93% of total assets. Nutri Pharma has no interest bearing debt.Unrestricted equity in the parent company Nutri Pharma ASA was NOK 0 million as of December 31 2002. The Board of Directors’ intend to propose to the Annual General Meeting that remaining share premium reserve of NOK 252.8 million is transferred from restricted equity to unrestricted equity.COMMERCIAL UPDATE
The 50/50 joint venture with Nycomed Pharma A/S, the distributor of Nutrilett® in the Nordic region became operational on January 1 2002. The combination of Nutri Pharma’s scientific expertise and Nycomed Pharma’s strong sales, distribution and marketing network in the jointly owned company, Nutrition Partners AS, succeeded in increasing sales both through growth in existing products and markets and through geographic expansion to Denmark. However, the cost of expansion resulted in a loss of NOK 7.9 million for Nutrition Partners in 2002. The negative financial result for Nutrition Partners is not satisfactory.In 1999 Nutri Pharma entered into a royalty based sales and distribution agreement with General Nutrition Centers, Inc. (GNC) leading to the launch of Scan Diet™ in the North American market in May 2000. GNC markets and sells a full range of Scan Diet™ products including powder, ready-to-drink and bars. While Scan Diet™ is a well-established brand, sales have not developed as expected. During 2002 GNC went through restructurings, and internal marketing restrictions within GNC have reduced the brand’s exposure to the consumer.In July 2001 Nutri Pharma signed an agreement with Mayne Health (formerly Faulding Healthcare Pty Ltd), a leading Australian health care group with corresponding strong presence in New Zealand, and in January 2002 Mayne Health launched its first line of Nutri Pharma weight reduction products under the brand of Nutriplan™. In October Nutriplan™ was also launched in New Zealand and the product range was extended to include bars and tubs in both countries. Mayne has invested in the brand with significant TV campaigns. The co-operation with Mayne Health is royalty based.R&D AND INTELLECTUAL PROPERTYNutri Pharma, an international leader in patented soy technologies, has the best documented natural products for weight management and cholesterol reduction based on its proprietary technology combining soy proteins, phospholipids, and fibers. The Company represents the most profound knowledge and clinical documentation of soy in humans – more than 40 clinical and pre-clinical trials have been performed, many to the same high GCP standards as the pharmaceutical industry.In 2002 Nutri Pharma invested NOK 16.4 million in R&D, intellectual property and product development, down from NOK 41.6 in 2001. These figures only relate to direct external costs and do not include indirect costs such as personnel. These investments are expensed when incurred. The company’s scientific and intellectual property position was considerably strengthened during 2002 and research conducted during the year has resulted in several important breakthroughs that will further strengthen Nutri Pharma’s IP platform going forward. With the strong IP platform and know-how now developed, future investment in R&D will be more focused.A number of clinical trials were performed during 2002 to demonstrate the efficacy of Nutri Pharma’s weight-management and cholesterol lowering products as well as their superiority compared to the competition. These results will be presented at scientific meetings in 2003 and submitted for publication.Nutri Pharma has also specifically investigated the superiority of Abacor versus the best commercially available soy protein, the long-term effects of Abacor, and the synergistic effects of Abacor combined with statins. These results documented further strong evidence that Abacor is the most effective natural cholesterol lowering product/ingredient on the market.Nutri Pharma’s IP position internationally is founded on 12 patent families with approximately 1000 patent claims. The patents protect and reinforce the USPs of Abacor® and the Nutrilett®, ScanDiet™ and Nutri Plan product ranges in all major international markets. These cover Nutri Pharma’s patented soy technologies combining soy proteins, phospholipids, and fibers in order to treat and prevent diseases associated with the metabolic syndrome, as well as composition and process patent applications of newly developed isolated soy proteins. The value of these patents was confirmed through the filing of an opposition by Protein Technologies International Inc., a subsidiary of DuPont, in November 2001 against one of Nutri Pharma’s patents granted by The European Patent Office. On 18 September 2002 Nutri Pharma filed a response to the opposition and will continue to vigorously defend this patent. The timing of a final decision on this opposition is uncertain.Abacor® has been documented as being the most effective soy composition to lower cholesterol and Nutri Pharma is evaluating to expand its Abacor® brand into areas where soy has other proven health benefits, e.g. for female health, heart health, type 2 diabetes and sports nutrition. During 2002 Nutri Pharma’s continued product development activities have resulted in prototype savoury, bar and ready to drink products incorporating the Abacor® blend. These prototypes, developed in collaboration with companies such as Tetra Pak, will be used to demonstrate the potential for the Abacor® formula with both existing and potential partners.OUTLOOK
With the unique scientific and intellectual property position Nutri Pharma has developed and secured over the last two decades, the Company is today an international leader within the growing field of soy and is in a better position to commercialise its strong IP platform.Nutri Pharma will continue to pursue the current business model of generating revenue through license agreements with a focus on both strengthening and expanding the business potential for the Company’s dietary products based on the technology within the Nutrilett®, Scan Diet™ and Nutriplan™ brands. At the same time more resources will be directed towards the commercial development of Abacor®, both into dietary supplements and functional foods. In light of the unsatisfactory commercial performance the Board is currently also evaluating other business models including strategic partnerships related to the intellectual property.Measures to reduce costs to be largely in line with revenue expectations have been implemented and the effect of these measures will be seen in 2003. It is however unlikely that the Company will be able to achieve its previously targeted cash break even in 2003. This is mainly due to the uncertainty related to Scan Diet™ sales in the US.Under the Norwegian Securities Trading Act, the Board of Directors' of Nutri Pharma is required to make a statement regarding Lars Høie's mandatory offer for all the outstanding shares in Nutri Pharma within one week of the expiry of the offer. The Board will make such statement within the allowed timeframe.Oslo Feb 4, 2003
Upcoming financial events 2003
March 12, 2003 Annual General Meeting 2002
April 25, 2003 Q1 2003
For further information, please contact
Eirik Uboe, CFO +44 7766 051466