Fourth quarter and preliminary results 2003

04.02.2004 - Nutri Pharma ASA (OSE: NUT) today announced that its loss for 2003 was NOK 10.5 million compared to a loss of NOK 66.6 million in 2002....

Oslo, February 4, 2004

Nutri Pharma ASA (OSE: NUT) today announced that its loss for 2003 was NOK 10.5 million compared to a loss of NOK 66.6 million in 2002.  Mainly as a result of the joint venture with Nycomed being dissolved from Jan 1 2003, total revenues were NOK 11 million, down from NOK 51.3 million in 2002.

All figures in NOK 1000

 

 

 

INCOME STATEMENT

2003

2002

2001

 

Total revenue

10 999

51263

15874

Total operating expenses

31 867

132 155

176 357

Results of operations

-20 868

-80 892

-160 483

Total financial income and expenses

10 348

14 307

27 567

Ordinary profit before taxes

-10 520

-66 586

-132 916

Tax on ordinary results

 

 

-233

Results of the period

-10 520

-66 586

-133 149

EPS (NOK)

-0.15

-0.93

-1.77



 

 

 

BALANCE SHEET

Dec 31 2003

Dec 31 2002

Dec 31 2001

 

Total long term assets

11 569

26 051

31 071

Total current assets

26 635

234 251

308 269

Total assets

38 204

260 301

339 340

Total equity

34 635

242 171

309 959

Total liabilities

3 569

18 130

29 381

Total equity and liabilities

38 204

260 301

339 340

 



 

 

 

ANNUAL ACCOUNTSNutri Pharma ASA and subsidiaries had total revenues of NOK 11.0 million in 2003, down from NOK 51.3 million the previous year. The significant reduction in revenues is mainly due to the joint venture with Nycomed being dissolved as of January 1 2003.  Sales revenues from Nutrition Partners amounted to NOK 38.9 million in 2002.  Royalty revenues declined from NOK 10.8 million in 2002 to NOK 6.4 million in 2003 as a result of declining sales of Scan Diet™ in the US and Nutriplan™ in Australia/New Zealand.Operating expenses were reduced from NOK 132.2 million in 2002 to NOK 31.9 million in 2003. 2003 includes a write-off of NOK 8.6 million in intangible fixed assets. Excluding Nutrition Partners in 2002 and the write-off of intangible fixed assets in 2003, operating expenses declined from comparable NOK 91.6 million in 2002 to NOK 23.3 million in 2003 as a result of the cost reduction programme which was implemented during 2002.The operating result improved from NOK –80.9 million in 2002 to NOK –20.9 million in 2003. Interest income from the investment portfolio resulted in net financial income of NOK 10.3 million in 2003. Net result after financial items was NOK –10.5 million. Net loss improved from NOK –66.6 million in 2002 to NOK –10.5 million in 2003. Operating cash flow was NOK 3.7 million in 2003.Nutri Pharma’s total assets were NOK 38.2 million as of December 31 2003 compared to NOK 260.3 million as of December 31 2002. The decline is mainly due to the repayment of NOK 197.6 million to shareholders in December 2003.  Cash and other liquid assets were NOK 25.2 million as of December 31 2003 - or 66% of the Company’s total assets. The liquid assets are invested in short-term instruments with low risk profile.As of December 31 2003, Nutri Pharma had intangible fixed assets of NOK 11.6 million. The intangible fixed assets represent the cost of the patent rights for Nutrilett® outside the Nordic countries and royalty rights for Nutrilett® in the Nordic countries.  These assets are amortized by about NOK 3.2 million each year. Due to the uncertainty related to the sale of Scan Diet in the US market, the remaining intangible assets related to the cost of entering into the agreement with GNC totalling NOK 8.6 million was written off in 2003.As of December 31 2003 the company’s total equity was NOK 34.6 million or 90% of total assets. Nutri Pharma has no interest bearing debt.


COMMERCIAL UPDATENordic - Nutrilett®
In 2003 Nutri Pharma and Nycomed Pharma AS agreed to dissolve Nutrition Partners, the 50/50 joint venture, effective from January 1 2003.  The parties entered into a new agreement whereby Nycomed is granted an exclusive license to sell Nutrilett in the Nordic countries and the Baltic states. Nutri Pharma will receive royalty on all sales of Nutrilett. Sales of Nutrilett® in the Nordic countries during 2003 amounted to NOK 68.8 million compared to NOK 77.8 million in 2002. The main reasons for this decline were increased competition from other dieting programs and a NOK 3 million inventory reduction in Sweden. In December, Ferd Private Equity acquired the consumer health division of Nycomed where Nutrilett is one of the core brands. Mills
In September the Norwegian consumer goods company Mills DA (part of the Agra Group which is partly owned by Unilever) launched two new pâtés under its Vita brand containing plant oils, one of which also contains Abacor. The Vita brand is positioned as an active part of a cholesterol conscious diet. This was the first launch of a food product containing Abacor. The launch is limited to Norway and will generate limited royalty revenue for Nutri Pharma in the short term.Allied Bakeries
On January 16 2004 Nutri Pharma entered into a 5 year licence agreement with Allied Bakeries, the leading bread manufacturer in the UK, for the use of Abacor® in its Burgen bread brand.  The launch on January 28 included cholesterol-lowering bread based on Nutri Pharma’s patented technology.
The agreement with Allied Bakeries is the result of several years of product development work whereby Allied Bakeries and Nutri Pharma have worked together to solve taste, process and technological issues related to Abacor® in bread. These developments have led to a broadening of the Nutri Pharma patent portfolio.US - Scan Diet™
Sales of Scan Diet™ declined further in 2003 largely due to discontinued product lines, less marketing support and the rapid growth of low carbohydrate diets in this market. Sales amounted to USD 3.1 million in 2003, down from USD 11.2 million in 2002. As royalty revenues are expected to decline further and the prospects for Scan Diet after December 2004 are uncertain, Nutri Pharma has written off all intangible fixed assets related to the license agreement with GNC totalling NOK 8.6 million. Nutri Pharma is exploring alternative strategies in the US market. Australia/New Zealand - Nutriplan™
In 2003 Mayne decided to divest several non-core businesses and brands, one of which was Nutriplan™. Mayne and Nutri Pharma have agreed to terminate the licence agreement and Nutriplan™ will not be available in the Australian and New Zealand markets until a new partner can be found.


R&D AND INTELLECTUAL PROPERTYNutri Pharma has, based on 20 years of research and more than 40 clinical and pre-clinical studies, developed patented products and process technologies for soy based dietary products and functional foods.
While Nutri Pharma’s investment in R&D was limited in 2003 the Company’s scientific and intellectual property position was broadened as a result of finalized studies representing R&D investments from previous years. The results of several clinical studies was presented at scientific meetings in 2003 and submitted for publication, of which the most important are summarised below:At the New Functional Ingredients and Foods Congress in Copenhagen in April 2003, a comparative study, emanating from a recent patent application, documents that Nutri Pharma’s soy composition Abacor®, is more than twice as effective in lowering cholesterol compared to the best commercially available isolated soy protein (ISP). Average reduction of LDL cholesterol and total cholesterol were 9.7% and 8.0% by Abacor and 5.4% and 3.4% by the ISP, respectively. These results are statistically significant. This randomized, double-blind study was conducted in Berlin/Germany in cooperation with the German Institute for Food Research.At the European Congress on Obesity in Helsinki in May 2003, Nutri Pharma’s low energy diet was reported to result in more weight and cholesterol reduction when compared directly to the Slim Fast product.At the 5th International Soy Symposium in Orlando in September 2003, Nutri Pharma announced the results of a study on its newly developed ISP.  This placebo-controlled, double-blind study of 120 hypercholesterolemic individuals demonstrated that Nutri Pharma’s new ISP is approximately twice as effective at lowering serum cholesterol values compared to the best commercially available ISP.  Average reductions of LDL cholesterol and total cholesterol were 9.4% and 10.7% for the new soy protein from Nutri Pharma, compared to 5.4% and 5.8% with the best commercially available ISP.  These results are statistically significant.Also, at the Soy Symposium, a meta-analysis conducted at the University of Kentucky, USA showed that Nutri Pharma’s soy based low and very low energy diets lowered total and LDL cholesterol levels significantly more than other diets. Average reduction of cholesterol with Nutri Pharma’s weight reduction products varied from 20% to 33%.  Literature from 1980-2001 was reviewed. Out of the 207 publications studied 47 met the criteria.Nutri Pharma’s IP position internationally is founded on a broad patent portfolio of patents covering compositions of soy ingredients, improved soy proteins, process technologies and methods of use claims. New composition patents were granted in 2003 both in Europe and in the U.S. covering cholesterol lowering dietary and functional food products. In addition, the patents cover combinations with other cholesterol lowering substances such as sterols and/or stanol esters, in order to prevent or alleviate cardiovascular diseases or disorders associated with the metabolic syndrome. Nutri Pharma is reviewing its patent portfolio in order to optimize the portfolio from a commercial point of view. In November 2001, Protein Technologies International Inc., a subsidiary of DuPont, filed an opposition against one of Nutri Pharma’s patents regarding Nutri Pharma’s proprietary technology of combining soy proteins and fibres granted by The European Patent Office. On 18 September 2002 Nutri Pharma filed a response to the opposition and will continue to defend this patent.


OUTLOOKDuring the last two decades Nutri Pharma has developed a broad intellectual property portfolio within the growing field of speciality soy ingredients.  These patents expire between 2017 and 2023. The focus during 2004 will continue to be on commercialization in two main areas: Functional foods for cholesterol reduction and dietary supplements such as weight management. Nutri Pharma intends to capitalize on the commercial agreements with Allied Bakeries and Mills by actively pursuing additional commercial and strategic opportunities. In addition Nutri Pharma will also explore the possibility of becoming involved in more parts of the value chain by delivering finished goods and pursuing alternative sales channels such as direct marketing.Nutri Pharma’s financial performance improved in 2003 through cost reduction, but the decline in revenues, mainly due to the poor performance of Scan Diet, is likely to result in continued losses for the coming year. Nutri Pharma’s main source of revenue in 2004 will be royalty revenues from Nutrilett as the licensing agreements with Mills and Allied Bakeries will generate limited revenues short term. The quarterly report is based on the same accounting principles as the latest published annual accounts and is in accordance with the Norwegian Accounting Standard for interim financial reporting.Oslo February 4, 2004


DOWNLOADS: The complete Q4 AND PRELIMINARY RESULTS 2003 Word file and PowerPoint presentation can be downloaded from the

INVESTOR

page.

 Upcoming financial events 2004
 
April 27, 2004  Presentation of Q1 2004
  
  
For further information, please contact
Eirik Uboe, CEO  +47 412 92 712