Friday 25th March 2011
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Dunedin-based biotechnology company Blis Technologies' hopes for strong sales growth after product releases in the US have been dashed for now.
In November, when it reported half year trading results, the company had expected continued sales growth due to the release in the US through warehouse-style retailer Costco and drugstore chain Rite Aid of a product containing the Blis K12 mouth and through probiotic.
But today Blis said that growth did not eventuate. After initial ingredient orders were filled, there had not been follow up orders for delivery of ingredients into the US for the January to May period.
That reflected consumer buying patterns generally, and a conservative approach by the marketing company to product support in the prevailing economic environment, Blis said.
It now expected trading revenue for the year to March to be similar to that in the March 2010 year.
The trading result for the year to March 2011 was expected to show a "material deterioration", as additional costs had been incurred in support of a GRAS (generally recognised as safe) application, and because of technical support provided to customers with new products under development.
In the year to March 2010, Blis reported a 64% rise in revenue to $1.89 million, including a doubling in product sales to $1.24 million. The loss from trading activities was $99,000. After deducting financing costs the total loss for the financial year was $482,000.
Blis also said today a multi-year research and development programme with Nestle Nutrition focusing on BLIS K12 for use in infant nutrition products was being concluded.
Nestle Nutrition had indicated the clinical validation of the product concept had proven difficult to establish, Blis said.
A new multi-year R&D agreement, which effectively replaced the infant nutrition research programme had started and included a Nestle option for rights over a specific application of the BLIS K12 probiotic.
Details of the research and the option agreement were confidential.
Blis shares were down 0.2c to 7.8c around noon.
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