Swedish pro-biotic firm BioGaia posts 11% profit slump

Swedish pro-biotics manufacturer BioGaia has recorded an 11% decline in first half pre-tax profits to €4.54 million.

BioGaia said its latest results include costs incurred from the modification or termination of distribution deals following the €50.8 million licensing of some of its pro-biotics to Nestlé. Excluding the Nestlé deal which was signed in the first quarter, net sales were down 3% to €18.63 million.

“Earlier this year, we signed several agreements with Nestlé through which they have among other things obtained exclusive rights to use Lactobacillus reuteri in infant formula throughout the term of patent in order to guarantee their access to our component product in this area,” Peter Rothschild, BioGaia's president told Nutra-Ingredients.com.

“One effect of this is that our reported sales of component products have decreased, although this has been offset by license revenue from Nestlé.

"Within the framework of these agreements, we have also initiated a distribution collaboration with Nestlé for some of our existing finished consumer products and a close partnership in development of new products related to Nestlé’s business.”