Chromium supplement supplier Nutrition 21 made bigger losses this year, as it took a hefty charge to pull its Lite Bites nutrition bar range from a planned retail launch after it failed to impress on a test market.
The Purchase, New York-based firm said it was $10.5 million in the red for the fiscal year 2003, a significant increase on last year's net loss of $6.0 million, owing to the $4.4 million charge to write off intangible assets related to the Lite Bites line.
Gail Montgomery, Nutrition 21 president and CEO, said: "The results of our Lite Bites product line have been disappointing. Increased competition in the nutrition bar business and waning sales in the overall weight loss category related to the ephedra controversy resulted in less than expected sales."
Nutrition 21 said it will instead focus on rapid commercialization of Diachrome, its first branded product, marketed as a nutritional therapy for people with diabetes. New data reported at the recent International Diabetes Federation Congress showed that Diachrome supplementation, as part of a patient care program, could help control type 2 diabetes. The firm has also set up a new trial to further confirm the ability of Diachrome to lower HbA1c levels, due to complete by June 2004.
In its ingredients business, the company is hoping to build strong research results to promote the use of chromium and its flagship product Chromax chromium picolinate. Spending on R&D has doubled since last year. However the firm is gaining no return on capital for its current activities and shareholders' equity has dropped considerably since last year.
"The current US chromium market is only a tenth as large as the calcium category, an essential mineral that currently enjoys a strong public health recommendation for daily supplementation. Our chromium research program is yielding exciting, yet to be published results that should substantiate the benefits of chromium supplementation in people who are insulin resistant, a condition estimated to affect as many as one in four Americans," said Montgomery, adding that the chromium market has the potential to rival current calcium sales.
Nutrition 21's revenues for fiscal 2003 were also down to $10.6 million, compared to $14.7 million in the same period a year ago. The company continues to be listed on Nasdaq's SmallCap Market.