Nutrition 21 shifts Chromax focus towards food

- Last updated on GMT

Related tags: Chromium picolinate, Clinical trial

Nutrition 21 is positioning Chromax as a food and beverage
additive, following the use of its proprietary chromium picolinate
ingredient in niche products marketed by Pepsi and Pharmavite.

Until recently the market for Chromax has concentrated on its use as a key ingredient in chromium supplements for diabetes care, weight loss and sports nutrition, despite having been affirmed as GRAS (generally recognized as safe) and therefore suitable for use in food and beverage products in June 2002.

According to president and CEO Gail Montgomery, the company is in discussions with other major consumer product companies over the use of Chromax in "well-recognized, significant products whose positioning is aligned with [Nutrition 21's] science and strategic goals"​.

Montgomery also said that Nutrition 21​ has secured international regulatory approvals for Chromax, which opens the way for it to work with multinational companies.

The new strategy was announced along with the company's 3Q financial results, which saw sales dip slightly to $2.32 million from $2.57 million in the prior year period. But the combined effect of a 45 percent increase in cost of goods sold, 13 percent increase in R&D expenses, a ten percent rise in administrative expenses, and a 10 percent increase in depreciation and amortization meant that the impact on net loss was more significant: $1,87 million (-0.05 per diluted share) compared to $1,02 million (-0.03 per diluted share) last year.

The balance sheet was given a big boost towards the close of the quarter with the raising of $9.6 million capital. "The size of the financing, the terms of the transaction, and the quality of our new investors validate our strategic direction and the market potential of our chromium technologies,"​ said Montgomery.

More positive results for the two preceding quarters mean that the company has a buffer zone to cushion the impact of a slower 3Q. Sales for the nine months ended March 31 were up 5 percent and net loss deepened $0.1 million.

"Net sales year-to-date were slightly improved despite general softness in the vitamin and supplement industry and a modest decrease in net sales during the quarter,"​ said Montgomery, who maintains that the overall upwards momentum seen in spite of the latest sales figures is attributable to the company's investment in clinical research.

Research collaborations include a four month trial announced last month with the Native American Mandan, Hidatsa and Arikara Nation to assess the health benefits and savings afforded by using Diachrome chromium picolinate and biotin formulation for type-2 diabetes sufferers in clinical practice.

In February the first clinical trial into the effects of chromium supplementation in children with type 1 diabetes, using Chromax chromium picolinate, got underway at the Childrens' Hospital in Los Angeles.

Drawing on trials that indicate daily supplementation of up to 1,000 mcg of chromium can help reduce the risk of type 2 diabetes and other health conditions associated with insulin resistance, Nutrition 21 petitioned the FDA to approve qualified health claims for chromium picolinate in January 2004.

The FDA has yet to approve the claims and has extended the review period several times, citing lack of resources. A decision is now expected on June 17.

While Nutrition 21's revenue growth will no doubt accelerate if the petition is granted, this is not being viewed as a barrier to market expansion. Should it be denied or delayed further, the company will continue to cite its approved structure-function claims.

In the fall it plans to roll out a new consumer outreach program, which will bring awareness of the ingredient's potential benefits to metabolic and mental health directly to end users, as well as to qualified health care practitioners.

Diabetes is the fourth main cause of death in most developed countries. It affects 18.2 million Americans, according to the American Diabetes Association - that is, 6.3 percent of the population. 5.2 million of these are unaware that they have the disease.

Related topics: Suppliers, Blood sugar management, Minerals

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