Nutri Pharma announces annual results 2000, in line with business plan and budget

Q4 Results
Pre-tax results for the Q4 2000 reached NOK –17,5 million (NOK –13,8 million in Q4 1999). Revenues reached NOK 1,8 million (NOK 0,7 million). Operating result was NOK –26,0 million, (NOK –12,2 million), and operating expenses were NOK 27,8 million (NOK 12,9 million )

Comments on the annual result
Revenues mainly relate to royalties from licensees, and predominantly the weight reduction/ maintenance product Nutrilett®/ Scan Diet™. This is marketed and manufactured for the Nordic market by Nycomed Pharma, and marketed in the American market by GNC (Numico). Royalties from GNC constitutes NOK 4,5 million of the total revenues while royalties from Nycomed Pharma were NOK 2,1 million.

Out of the total operating expenses, employee salaries amounted to NOK 14,7 million. The increase in operational costs mainly refers to marketing support and preparations for future products. Additionally expenses relate to negotiations with future licensees and partners. An element of the operating expenses refers to the use of consultancy services, which is in line with Nutri Pharma’s business plan and essential to create a “virtual organisation” providing a lean and cost effective administration.

Research and Development
Nutri Pharma has spent NOK 24,6 million on research & development and product development in 2000. The research organisation has been developed to a satisfactory structure during 2000 under the supervision of Dr Jörg Grünwald , Director of Research. The research team is situated in Berlin and Copenhagen, whereas the product development team is situated in Oslo and Lund (Sweden).

Patents
In November Nutri Pharma was, following a five-year process, granted a patent in the US covering Nutri Pharma’s special technique of combining soy proteins, fibres, and lipids that can be used to lower the level of cholesterol. The same patent was granted Nutri Pharma in the European markets by the European Patent Office in December. Both patents implies break-throughs for Nutri Pharma in both the US and European market, and adds significant competitive strength to Nutri Pharma’s product line.

Business development
Business development has mainly evolved in accordance with Nutri Pharma’s business plan. The period from signing strategic agreements to roll-out of actual products has however been longer than expected. Nutri Pharma considers this partly due to less focus on development of new nutritional products in the global food industry, which underwent an extensive number of mergers and acquisitions throughout the last year.

Product development has been ongoing in collaboration with a number of licensees. Among them are Scan Diaries the Swedish based company, which is currently developing a yoghurt containing Abacor, Nutri Pharma’s clinically proven cholesterol lowering ingredient. Similarly Del Monte is developing a cholesterol lowering juice, also containing Abacor.

Negotiations with several other potential strategic partners have been initiated over the last year, and are still in progress.

The cholesterol-lowering product Abacor was introduced at the Swedish Medical Convention in the beginning of December 2000. A broader market introduction will take place in Sweden in the fall of 2001.

Scan Diet has continued to be successful on the American market, and has reached a broad audience. Positive press in relevant media has contributed to the success of Scan Diet.

Organisational development in 2000
Subsidiaries have been established in the Sweden, Great Britain, and Germany and a number of key personnel have been hired during the year, further strengthening Nutri Pharma’s management, R&D and marketing activities.

Share price development
The Nutri Pharma share was listed on the Main List at Oslo Stock Exchange on May 5, 2000. Since its introduction it has, in large, followed the All Share Index, fluctuating between NOK 14-47. At trade ending February 4, the share was quoted at NOK 23,20.

Future prospects
Nutri Pharma is pleased to be in line with its business plan. The business plan forecasts an increase in both revenues and costs for 2001. The result for 2001 will still be negative and is expected to rise due to larger R&D and marketing costs.

Upcoming financial events 2001:
- An annual report will be published first week of April 2001.
- First quarter results will be published April 26, 2001.
- The Annual General Meeting will be held April 25, 2001 in Oslo