ChromaDex sells analytical lab to Covance
In the $8.5 million deal, Irvine, CA-based ChromaDex will sell its analytical testing lab in Boulder, CO to LabCorp, which will operate the facility under its Covance division. ChromaDex will retain its newly constructed lab in Longmont, CO and will also retain its reference standards business. Spherix, the consulting firm that ChromaDex acquired in 2012 and which had been group with the testing lab and the standards business units, will also remain part of ChromaDex.
For founder and CEO Frank Jaksch, the move reflected the ongoing evolution of the business. Leaving that part of the industry behind was a difficult decision, but a necessary one, he said.
Longmont lab to support ingredient development
“The lab business was an important part of our DNA. It has been since I started the company 17 years ago,” Jaksch told NutraIngredients-USA.
“We are now moving the business in a different direction. When we set up the facility in Longmont we were planning for the eventual sale of the lab business. The ingredient business is now the primary focus and I think we are really good at it,” he said.
ChromaDex started in the ingredient development game with pTeroPure, a nature identical, synthesized form of pterostilbene, a molecule similar to resveratrol that can be found in blueberries and other botanical sources. The company also developed PurEnergy, a pTeroPure-caffeine co-crystalline ingredient; Immulina, a spirulina extract with immune boosting potential; and AnthOrigin, an anthocyanin-rich extract of purple corn husks.
But the basket containing the most eggs by far is Niagen, the company’s patented form of nicotinamide riboside. The molecule has been shown to boost the NAD+ pathway, which has implications in anti-aging products. The company has developed a finished product brand called TruNiagen based on the ingredient and has garnered cash infusion from Hong Kong investor Li Ka-shing that could potentially reach $25 million to help develop the business.
“The reference standards and the regulatory businesses are still important parts of the company. Those are still important parts of our ingredient development platform,” Jaksch said.
Lab business had lower growth potential
Though the analytical testing business was the foundation of the company, Jaksch said as the head of a public company he had to think about where investment capital could best be put to use. Analytical labs, as a business sector, have an inherently lower growth potential than some other opportunities.
“At some point you have to make the decision that where you were yesterday is not where you are today. The lab business requires a lot of resources and a high degree of expertise for what is essentially a niche business. To grow that kind of business requires a lot of capital, and there are more efficient ways to use capital,” Jaksch said.
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