The company said the new ingredient demonstrated in animal models a 6-8 times longer half-life as compared to caffeine alone, suggesting that it may provide longer sustained energy and alertness with a more gradual finish, preventing the "crash" typically experienced when ingesting caffeinated products. This could allow formulators to reduce the total amount of caffeine without affecting the consumers' product experience.
"There has been and will continue to be tremendous demand for caffeinated products across many markets including energy, functional beverages, sports nutrition and weight loss. We believe that PURENERGY offers a responsible, next-generation alternative to heavy doses of caffeine. PURENERGY balances the consumer's desire to feel the effects of caffeine with the pressure consumer product companies are under to reduce caffeine levels in finished products," said Frank Jaksch, CEO of ChromaDex.
In addition to the stimulant benefits of caffeine, the company said the new also has additional functional health benefits that include cognitive function, antioxidant activity, heart health and weight management support.
Revenues rise; losses do, too
In its year-end financial report, Chromadex reported a 43% increase in revenue in its fiscal year 2012, with revenue hitting $11.6 million. But shareholder losses increased too; losses went from $7.9 million in 2011 to $11.7 million in 2012.
Some of the losses in FY 2012 were attributable to non-cash compensation-related expenses, the company said. Excluding these would reduce the 2012 loss to $8.9 million, still greater than 2011.
The company met some major benchmarks in 2012, though, which shows that it is on the right track, according to Jaksch.
"Throughout 2012, we continued to execute on our business strategy of identifying novel ingredient technologies, securing intellectual property rights, developing commercially viable production processes, validating with clinical proof and most importantly, executing on a commercialization and licensing strategy,” Jaksch said.
Chief among the major developments for ChromaDex in 2012 was the sale of the company’s consumer dietary supplement line, BluScience, which was bullt around ChromaDex’s pTeroPure ingredient. That brand was sold to Canadian supplement marketing firm NeutriSci in a mixed cash and stock transaction.
"The sale of our BluScience line will allow us to focus our management and capital resources on our ingredient business as well as eliminate expenses associated with managing BluScience. NeutriSci has strong consumer product marketing expertise and the ability to take the BluScience brand to the next level. The structure of the BluScience sale provides ChromaDex with additional cash as well as meaningful participation in the future of BluScience," Jaksch said.
ChromaDex laid out the details of the BluScience transaction as follows:
The total sale transaction value was approximately $6.2 million, which consisted of $250,000 cash upon execution of the LOI; $250,000 cash paid at closing; a $500,000 cash payment due on or before 60 days after closing; a $2.5 million senior secured note payable in six equal quarterly cash payments of $416,667 each, commencing on August 15, 2013; and 669,708 shares of Series I Preferred Shares that are convertible into 2,678,832 Class "A" Common Shares in the capital of NeutriSci (the "NSI Shares"), representing an aggregate of 19 percent of the NSI Shares. The transaction documents contain certain equity blockers which preclude ChromaDex from exceeding 9.99 percent and 19 percent ownership levels without obtaining certain waivers from NeutriSci. ChromaDex will continue to generate revenue related to BluScience through both a 6 percent royalty on future net sales of BluScience products as well as a supply agreement with NeutriSci for its patented pTeroPure pterostilbene, which will continue to be the key active ingredient in the BluScience product line.
ChromaDex retains the rights to its pTeroPure ingredient, Jaksch noted. And Jaksch has said in the past that the company will continue to fund human clinical trial research into the ingredient. The first such study, showing a statistically siginificant blood pressure lowering effect, was publicized in November 2012.
Among other 2012 highlights in the company’s year end report:
- In February, the Company closed an offering of common shares at a price per share of $0.75, resulting in gross proceeds of $11.75 million to the company.
- In February, ChromaDex entered into a strategic distribution alliance with OPKO Health that covers Latin America.
- In April, the company announced the first patent issued for pterostilbene which is licensed exclusively to ChromaDex and includes three key claims which encompass both the nutraceutical market and the pharmaceuticals market.
- In July, ChromaDex concluded a North America distribution agreement with Glanbia Nutritionals for pTeroPure.
- In July, the company licensed from Dartmouth College exclusive rights to several patents related to the recently discovered vitamin found in milk, nicotinamide riboside (NR). The licensed intellectual property includes protection for human uses of NR as well as methods to produce NR. This license, coupled with IP rights for NR acquired from Cornell University and Washington University, helps position ChromaDex as a leader in the commercialization of this "no flush" version of niacin.
- In December, the Company acquired Spherix Consulting, Inc., a leader in scientific and regulatory consulting services.