Shares of Martek Biosciences Corp. rose nearly 13 percent yesterday after news that the Kellogg Co. plans to fortify food with one of the Columbia biotech's products as early as next year.
Martek announced the deal yesterday morning, but only described the partner as a Fortune 500 consumer-product food company. Kellogg, the Battle Creek, Mich., company that is the nation's top breakfast cereal manufacturer, was revealed as the company in a filing with the Securities and Exchange Commission.
Martek's stock rose $7.50 yesterday, or 12.9 percent, to close at $65.25 on the New York Stock Exchange. The deal would potentially create a large new use for Martek's manufactured DHA, an omega-3 fatty acid found naturally in certain fish and plants.
Martek harvests DHA from algae using a patented technique. It already sells the substance as a nutritional supplement in more than two-thirds of the world's baby formula. Sales have been fueled by research showing that DHA boosts brain and eye development in babies.
"Like the infant formula companies, food companies are recognizing the importance of DHA to human nutrition," said Martek Chairman and Chief Executive Officer Henry "Pete" Linsert Jr.
The 15-year license agreement requires Kellogg to develop products containing Martek's DHA and to display the Martek logo on its packaging.