A natural fit for natural products?

IRVINE, Calif.—Charging forward to pull itself ahead of the pack of other dietary supplement providers and expand its pipeline into South America, ChromaDex Corp., a natural products company that also sells its chemistry ingredients to the cosmetics and pharmaceutical industries, has signed a joint agreement with Brazilian Biosciences National Laboratory (LNBio) to evaluate ChromaDex’ natural product libraries for new commercial opportunities and possible patents.

The business venture, announced April 7, aims to screen natural product libraries against certain molecular targets and phenotypic assays in order to identify high-value candidates, according to ChromaDex.

Under the terms of the agreement, ChromaDex will be responsible for providing the natural product libraries for screening, as well as the natural product chemistry expertise to continue the development of any identified candidates into commercial opportunities.

LNBio, known for its cutting-edge research and innovation in biotechnology and drug development, will perform assays in enzymes, cells and organisms related to the discovery of chemical entities, which is the object of this collaboration.

“ChromaDex’s expertise in developing natural product libraries and natural products chemistry, as well as its success in commercializing novel, branded ingredients, makes ChromaDex the ideal partner for this type of high-throughput screening collaboration,” Kleber Gomes Franchini, director of LNBio, stated in a news release. “If successful, this collaboration could lead to rapid commercialization of novel natural products for food, beverage, cosmetic or pharmaceutical applications.”

Frank Jaksch Jr., founder and CEO of ChromaDex, says the company catalog offers “thousands of very unique phytochemical compounds primarily isolated from botanicals.

“We are very excited to start this collaboration with LNBio, as this program will allow ChromaDex to extract value from the natural products library we have been developing over the past 15 years,” Jaksch explains.

“The agreement came out of mutual interest by both parties,” he adds. “But additional details can’t be disclosed at this time, and the financial terms are confidential. We are looking forward to the potential commercialization of these materials as new dietary supplement ingredients.”

“This is ChromaDex’s first such agreement with a South American group,” Jaksch notes. “We are always open to unique collaborations such as this with worldwide partners. For instance, we also have an ongoing partnership with a South African group called AAMPS.”

The agreement with the African contingent was signed in August 2011, setting the stage for ChromaDex to sell and market the AAMPS African botanical standards and the African Herbal Pharmacopoeia, which provides comprehensive botanical, commercial and phytochemical informational monographs on over 50 of the most important African medicinal plants.

In other news, ChromaDex also announced financial results for the first quarter ending March 29, 2014. The company reported net sales of $3 million in the first quarter for an increase of approximately 32 percent compared to $2.3 million net sales in the first quarter ending in March 2013. The increase over the past year has been attributed to increased sales in the proprietary ingredient segment, which grew to $1.1 million after Q1 2014, an increase of 97 percent, compared to ingredient sales of $577,953 in the first quarter of 2013.

As of March 29, 2014, ChromaDex’ cash, cash equivalents and marketable securities totaled approximately $1.9 million.

“Over the past three years, we have spent considerable capital and resources to commercialize what we believe are valuable, patented ingredient technologies, such as our NIAGEN nicotinamide riboside and PURENERGY caffeine alternative,” according to Jaksch. “The 97-percent increase in ingredient sales was largely a result of the first order we received from 5LINX for NIAGEN and PURENERGY.

“Based on visibility of sales activity from both our existing customers and our business development pipeline, we anticipate steady growth in our ingredient segment to continue for the foreseeable future,” he said.

“Media outlets are starting to highlight peer-reviewed research studies from esteemed institutions on the potential health benefits of NAD+ precursors, such as nicotinamide riboside (NR),” Jaksch says. “We expect new research will continue to be published which will further validate the health benefits of NR. We plan to add to that research by beginning our first clinical study on NIAGEN in the second quarter.”

Further enhancing its business pipeline, in January 2014, ChromaDex entered into a four-year ingredient supply and brand licensing agreement, valued at approximately $62 million, with 5LINX, one of the largest and fastest-growing direct marketing companies in the world.

5LINX was granted marketing rights for ChromaDex’s patented NIAGEN nicotinamide riboside ingredient for use in dietary supplements exclusively in the network marketing sales channel in the United States, Canada and Philippines. Under the terms of the agreement, 5LINX must purchase from ChromaDex $2.1 million of NIAGEN in 2014 and an aggregate of $46 million of NIAGEN from 2015 through 2017.

5LINX was also granted marketing rights for ChromaDex’s recently launched patented PURENERGY for use in dietary supplements, with select exclusivity in the network marketing sales channel in the U.S., Canada and Philippines.

ChromaDex also announced the appointment of former Nestle executive Steve Allen as an independent director. Allen retired from Nestle in December 2009 after a 30-year career in sales, marketing and general management.

Also in the first quarter, the company entered into separate material transfer agreements with Groningen Biomolecular Sciences and Biotechnology Institute and the University of Copenhagen, whereby ChromaDex will provide each with quantities of its NIAGEN nicotinamide riboside for research purposes.