Strong figures marked by a surge in sales helped cholesterol-reducing ingredient company Forbes Medi-Tech report a leap in revenues for the first six months of 2003.
During this period revenues rose 29 per cent from $5.1 million in the previous year to $6.9 million for the six months ended June 30, 2003.
The Canadian company - that develops cholesterol-lowering agents from plant sterols - reported that demand for its Reducol and Phyto-S Sterols (non-branded sterols) products exceeded the 2003 initial target as a result of increased orders from existing customers in both the food manufacturing and dietary supplement businesses.
As a result, Forbes increased its projected revenue guidance for fiscal 2003 from $9 million to $11 million.
"The increase in revenue and progress in our pharmaceutical research program to date reflects the company's ability to achieve the targeted milestones," said Charles Butt, president and CEO of Forbes Medi-Tech.
Turning to profit, the company reported $2.2 million ($0.10 per share) for the first six months, a considerable rise from $0.9 million ($0.04 per share) for the six months ended June 30, 2002. This steep increase in net income for the six months ended June 30, 2003 was due to a variety of factors, including the company's share of sales by the Phyto-Source joint venture, cost containment measures in the areas of administrative and non-core R&D expenditures, and the receipt of Quebec provincial investment tax credits in the first quarter that totalled $0.6 million.
Subsequent to quarter-end, Forbes announced that it would receive a $3.0 million advance payment from Phyto-Source LP, its manufacturing joint venture with Chusei (USA) Inc. The payment is made towards a $4.0 million loan made by Forbes Medi-Tech during the formation of the joint venture.
Looking ahead to the rest of the year, Forbes predicts that, based on existing sales contracts and assuming that forecasted supply requirements will be ordered and shipped, it should maintain its revenue guidance for 2003 of $11 million.
The Canadian company added that it is also in discussions with several other companies regarding possible new major sterol contracts. As such it will review its revenue guidance throughout the year 'if significant supply agreements are signed'.
Looking ahead, the company made it clear in a statement this week that it is confident that it will have 'sufficient capital to operate and fund its core development projects through the end of 2004'. In addition, Forbes will continue 'to look at various financing opportunities' to further develop its pipeline of products.
Last month the Canadian biotech firm said it had reached a deal to supply its cholesterol-lowering Reducol, for use in supplements and functional foods, to the South Korean market.