Hey Bill, Our Boat Finally Came In!!!
Wherever you are. It only took 5 years from when we last
talked on this thread. Hope you made a boatload of money here.
Congratulations to Martek for their perseverence and
helping to make baby formula a better product.
Peter
Martek's Shares Jump 25 Percent
Two Infant Formula Deals Announced
By Terence Chea / Washington Post Staff Writer
Friday, January 11, 2002; Page E05
Shares of Martek Biosciences Corp. jumped 25 percent yesterday after two major U.S. infant-formula makers announced plans to launch new versions of formula that contain the Columbia company's nutritional supplements.
Mead Johnson Nutritionals, which markets the Enfamil brand, said its new formula has been approved for sale by the Food and Drug Administration and will hit store shelves early next month. Ross Products, maker of Similac, said it is in "final discussions" with the FDA about its new product and hopes to start selling it in "early 2002." The two companies have about 80 percent of the U.S. formula market.
Martek shares yesterday rose $5.66, or 25 percent, to $28.34.
Martek's nutritional oils contain two fatty acids that studies show are important to an infant's mental and visual development. DHA, docosahexaenoic acid, and ARA, arachidonic acid, are naturally present in breast milk but not in regular infant formula. Several recent studies have found that babies who were fed formula supplemented with DHA and ARA performed better on mental and visual tests than infants who were fed unsupplemented formula.
Formula containing the nutrients is sold in more than 60 countries, but it is not yet available in the United States. In addition to licensing the oils to Mead Johnson and Ross Products, Martek has also licensed them to American Home Products Corp. and Royal Numico for use in infant formula. In May, the FDA approved the sale of Martek's oils in this country, granting it "Generally Recognized As Safe" status.
Founded in 1985, Martek makes the nutritional oils from laboratory-grown algae. It manufactures the product at its factory in Winchester, Ky. The product will also be produced at a South Carolina fermentation company Martek agreed to acquire last month.
The U.S. formula market makes up about one-third of the worldwide market for infant formula, which is estimated at $6 billion to $8 billion. Martek usually gets about 5 percent of final product sales, said Peter Buzy, Martek's chief financial officer. Martek previously said it expects its revenue in 2002 to be double the $19 million it generated in 2001.
Scott Van Winkle, an analyst at Adams, Harkness & Hill, the investment bank in Boston, said he expects U.S. sales of supplemented formula to eventually generate $100 million to $125 million in revenue for Martek.
Mead Johnson Nutritionals, a division of Bristol-Myers Squibb Co., said the formula containing the supplement will cost 10 to 15 percent more than the regular formula. The company plans to promote the product by marketing its benefits to health care professionals.
"Breast milk is the gold standard," said Pete Paradossi, a Mead Johnson spokesman. "We're trying to bring our formula as close as possible to breast milk." |
