Shares in Australian isoflavone specialist Novogen climbed more than 3 per cent this week on news that the firm had settled a patent dispute with the leading US supplements retailer GNC over its red clover product.
The agreement will allow Novogen to reinforce its position in the competitive US menopause supplement market.
It is also planning to expand in Europe, one of the regions where it is seeing strongest growth.
Novogen claimed that a range of General Nutrition Corporation (GNC) menopause products infringed one of its US patents. The Australian firm said GNC has now agreed to remove the products in question from its shelves, replacing them with Novogen's Promensil, giving the brand a major presence in the US market.
GNC will also pay an undisclosed sum to Novogen in damages.
Novogen has considerable intellectual property on the extraction and other technology for isoflavones. Worldwide rights (other than for Australia and New Zealand) to certain of its soy isoflavone technology has been licensed to US-based Solae.
It therefore makes all of its revenue from its red clover business, which competes with soy products in the booming menopause supplement market.
The firm initially saw some negative impact from the HRT scare as consumer confusion over plant oestrogens turned them away from natural supplements.Its consumer products sales revenue for the 2003/04 financial year fell A$6.9 million to A$12.7 million but CEO Christopher Naughton says the business has now broken even.
The firm is also seeing good growth in Europe, with plans to expand out of its current markets in the Netherlands and the UK. Europe currently only accounts for around 17 per cent of its turnover but is growing faster than other regions, with a forecast for about 20 per cent this year.
Red clover is the third best-selling supplement in the Netherlands' €7 million menopause category after black cohosh and homeopathic remedies. Novogen claims to be the leading supplier of standardised red clover.
"Since the HRT scare, we have seen significant growth in the Netherlands, which is stabilizing now but still showing strong growth," said Wyobo Kortmann, country manager told NutraIngredients.com.
"We have implemented good marketing strategies and are aiming to be present on other European markets."