The firm said yesterday that it has decided to write-off capitalized development expenditures relating to the research.
Peter Rothschild, managing director of Biogaia, told NutraIngredients.com that is was more prudent to write off the expenses than to continue with an unrewarding study.
The results will disappoint others in the industry who had believed in the ability of probiotic bacteria to help prevent allergies like eczema and asthma if taken from birth.
BioGaia's clinical study was launched in 2001, with 232 newborn infants being given Biogaia's patented Reuteri bacteria. The incidence of eczema, which is the main allergy for young infants, did not decrease with the probiotic supplement.
"It is of course a disappointment that the study did not show the results we expected," said Rothschild.
However he drew some positives from the study, pointing out that there was reduced wheezing among two-year-old infants. Hay fever and asthma are uncommon in early life and this, says Rothschild, shows "clear tendencies that should be examined in future studies."
"We are optimistic that a possible follow-up of the study at a later stage will show reduced incidences of asthma and hay fever," he added.
The results come just as the small firm approaches profitability. It has written off SEK 10.8 million (€1.15m) in development expenses, and SEK 4.9 million (€0.5m) to reverse provisions for future commitments to pay royalties on future sales of allergy products. Cash flow will not be affected however.
BioGaia said in a statement that it still had a "strong portfolio of innovative products, successful clinical trials and a growing distribution network covering a large share of the key markets".
Known as Reuteri, the lactic acid bacterium Lactobacillus reuteri has previously been shown to improve gastrointestinal, immune and oral health.