Martek to sell baby formula additive to Sandoz Md. firm supplies six major producers

Manufacturing

January 09, 1996|By Timothy J. Mullaney | Timothy J. Mullaney,SUN STAFF

Martek Biosciences Corp. said yesterday that it had reached a licensing deal with Sandoz Nutrition SA that will put the Columbia firm's baby formula additive into the formula the Swiss-based giant sells in Europe.

Martek did not give a value of the deal, but said Sandoz is the sixth big formula manufacturer to agree to use Martek's Formulaid, a complex of fatty acids derived from microalgae that scientists believe speeds up brain development in infants.

Chemical components of Formulaid are present naturally in breast milk but are not part of major commercial baby formulas.

"The goal of infant food companies is to make it as close to mother's milk as possible, and our product helps them do that," said Steve Dubin, Martek's chief financial officer.

Taken together, the deals mean companies that sell 40 percent of the world's baby formula have committed to use Formulaid, Martek's Chief Executive Officer Henry "Pete" Linsert Jr. said.

However, the product is still generating only modest revenue -- and Martek continues to be an unprofitable, development-stage company -- because major U.S. formula makers still are doing the scientific studies needed to demonstrate that Formulaid is safe.

"Infant formula is the most highly regulated food in the U.S. To add an ingredient, you have to do all of the testing," Mr. Dubin said.

Thus far, he said, Formulaid is on the market in Belgium and the Netherlands.

Some licensees are using the product only in formula for premature infants, though Mr. Dubin said it eventually will be marketed for both premature and full-term babies.

The company also announced an important step toward U.S. approval yesterday, as it revealed the findings of an independent committee of scientists that studied Formulaid. It found that the product meets U.S. requirements for safety for infants and adults.

The company also said Formulaid had been recommended for approval in the United Kingdom by a committee of scientists that advises food regulators.

Mr. Dubin said the components of Formulaid have been found in studies by scientists not affiliated with Martek to be important components of neurological tissue throughout the body.

Low levels of one of the acids in Formulaid have been linked to different forms of mental illness and Alzheimer's disease, and the company is test marketing the ingredient as a nutritional supplement for adults.

Martek's stock closed at $24.75 yesterday, up 50 cents.

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