Bill, I went to the annual stockholders meeting and I was really
impressed. The following is a summary:
1. The new marketing vp, Keller, made a powerful presentation (slide show) that showed a new packaging (called Best Start) of the DHA products for pregnant women, from the 3rd trimester through the first year of the baby's life. This approach is being used to market the heavy retail hitters, here and abroad, to establish marketing relationships.
There are roughly 3.9M pregnant women in the US. 847K (22%) have
family incomes > $45K. This is the target market for infant formula.
2. Keller also talked about Pregnant Physicians, a new organization,
sponsered by Martek, but run by The New York Hospital-Cornell Medical Center. They currently have 1,400 members of which 210 are currently pregnant physicians. This is way beyond their original expectation of 100 or so. This organization of Martek's marketing campaign to break
down the wall of resistance (inertia) with OBGYNs and pediatricians.
3. Efficiency of the Kentucky manufacturing operation continues to
improve. The big problem of leaks that contaminated batches is mostly
fixed. They have identified the parameters that improve fermenting
efficiency, e.g. PH levels, mixer blade speeds, in the lab and are
applying this knowledge to manufacturing.
The Kentucky facility is both R&D and production purposes. Martek
will be licensing out the bulk of their manufacturing. But first
they need to know how it is done in volume.
4. The financial folks continue to work on additional financing but they have not determined yet whether or not they will actually need it.
5. DHA laced infant formula is selling well in Israel and demonstrating that parents will pay 10% more for the product.
6. New science reports, at the rate of one every 2 months, continue to support the benefits of DHA for both the young and the old. Studies show that there is no lethal dose of DHA and therefore no lethal-dose-50 (1/2 lethal dose) which has to be worried about.
7. Competition: Monsanto/Omega Tech. are using another micro organism to produce DHA but it also contains TPA, which tends to replace DHA in brain development. Further they will have to come to Martek for licensing of the RNA mixing technology patents.
Fish Oil, contains impurities, including insecticides and herbicides, as well as being uneven in quality. Martek has spent $1.5M on patents. They feel that they are well protected. They have an additional 5 patents in the works.
8. FDA: Two panels are studying DHA for infant use. Both continue
to postpone presenting their results. Current schedule is for term Term Panel to report in April and the Pre-term Panel to report in the Fall. Adult usage is approved by the FDA.
Adding DHA to infant formula requires that the manufacturer apply to FDA for approval of revised product labels. No applications have been
presented.
The FDA continues to block (stall) attempts by foreign companies to market infant formula in the US. Martek's Israel partner has tried
for 7 years to no avail.
Fred |
