The sales of branded ingredients - foremost among them Niagen, the company’s branded form of nicotinamide riboside - were a primary driver in that rise, said CEO Frank Jaksch in an earnings call with analysts, the company’s first. Also key to that growth was an increased demand for the company’s core standards and services segment, which generated net sales of $2.3 million, a 32% year-over-year gain. Jaksch attributed some of this to fallout from the NYAG affair.
"Our net sales over the last four quarters clearly illustrate the momentum we have been experiencing in our business model. While the growing interest in Niagen continues to be a key revenue driver, I am thrilled with the strong growth we are also experiencing in our core standards and services sector. As a result of the recent NY attorney general actions regarding supplement labels, we anticipate increased demand for programs and services that address quality concerns in supplements,” Jaksch said.
Niagen provides road map
Jaksch said that Niagen, the company’s biggest seller, up to this point has mostly been applied in supplements sold in the network marketing channel. Retail brands featuring the ingredient will be launching soon. The ingredient’s history with ChromaDex offers a roadmap for the company’s future, Jaksch said. The company licensed the rights to the ingredient from Cornell University in 2011.
“We look for compounds that address very large potential market opportunities. If they don't address large market opportunities, it’s not really going to be much of an interest for us. And the second one is the strength of the intellectual property portfolio underlying the ingredient. It has to have a strong portfolio because we don't want to have a compound even if it has a large market, if it's not defendable intellectual property,” he said.
“The more technology we license the more robust our future pipeline is going to be. We are currently in the process of licensing several new technologies and we are currently tracking at least a dozen other early-stage developments,” Jaksch told analysts.
For the three months ended April 4, 2015 ("Q1 2015"), ChromaDex reported record net sales of $5.3 million, an increase of 71% as compared to $3.1 million for the three months ended March 29, 2014 ("Q1 2014"), and a sequential increase of 24% as compared to Q4 2014. This increase was largely due to increased sales in its ingredients business segment, led by its NIAGEN(R) branded nicotinamide riboside. The ingredients segment generated record net sales of $2.7 million for Q1 2015, an increase of 136%, compared to $1.1 million for Q1 2014, and a sequential increase of 36% as compared to Q4 2014.
The core standards and services segment also posted its largest quarterly increase ever of 32%, as it generated record net sales of $2.3 million for Q1 2015, compared to $1.7 million for Q1 2014. Net sales for the scientific and regulatory consulting segment were $281K, an increase of 39% as compared to $202K for Q1 2014.
The net loss attributable to common stock holders for Q1 2015 was $1.0 million or ($0.01) per share as compared to a net loss of $1.8 million or ($0.02) per share for Q1 2014.