Cardax announces first synthetic astaxanthin revenue as red ink rises

29-May-2017 - Last updated on 30-May-2017 at 15:36 GMT

Synthetic astaxanthin maker Cardax announced significant initial sales of its finished goods brand as the company struggles to stay afloat financially.

Cardax has been developing its synthetic ingredient for a number of years and last year announced a major pivot toward offering a finished product called ZanthoSyn on the market in Hawaii, where the company is located. In its most recent earnings release, the company, which is publicly traded though it hovers in the penny-stock realm, announced that ZanthoSyn sales have ramped up quickly since the product was first marketed in August of last year. In the most recent statement, for the three months ended March 31, 2017, the company recorded $107,000 in revenue, which is the first appreciable revenue attributable to the synthetic astaxanthin program.

On the ropes

But this welcome news must be weighed against the company’s grave financial position. According the company’s latest financial filing, it lost $450,836 in the first quarter, and has incurred a deficit of $56.4 million since its inception. In late March of this year the company was forced to lay off all of its employees and independent contractors and to have CEO David Watumull and two other executives continue on for minimal financial compensation and to forego equity compensation.

The filing said the company successfully raised $289,000 in the first quarter and an additional $190,000 in April and May. More money will be needed for the company to survive. “Obtaining additional financing, the successful development of the Company’s contemplated plan of operations, and its transition, ultimately, to profitable operations are necessary for the Company to continue operations,” the company said in the filing.

Cardax says it is selling ZanthoSyn at GNC stores in Hawaii and also through physicians offices.

“We were very pleased to see accelerating sales this quarter driven by the ZanthoSyn product launch at GNC and strong physician acceptance,” Watumull said .“With the added momentum of our strong anti-aging study results, we are building a strong foundational business model for our future growth, not only in Hawaii but across the U.S. as well.”

The anti-aging data Watumull referred to was an unpublished study that the company said showed an almost 90% increase in FOX03 gene expression in mice. The gene has been linked with longevity in humans by the same University of Hawaii researchers who conducted the astaxanthin study.

Inflammation message

Watumull said the company’s approach to health care professionals has been based on the fundamental role inflammation plays in many disease processes in the body.

“We talk to them about the role of inflammation in health. Having a product that address inflammatory health so effectively is really helpful,” Watumull said. The fact that inflammation is so ubiquitous means the product can potentially play in a lot of different categories, such as sports nutrition and anti-aging, Watumull said.

“Inflammation stress and oxidative stress play a role in so many areas. it plays a role in the aging process, so there are some intriguing possibilities for astaxanthin in that space. But they are all related. They all stem from the some molecular problems,” he said.