Royalties Working Well for Martek

COLUMBIA, Md.--Martek Biosciences Corp. (NASDAQ:MATK) reported on March 12 revenues were up 70 percent for its first quarter of 2002 (1Q02), ended Jan. 31, compared to the same quarter last year because of increased sales for the company's oil-to-infant-formula licensees. Sales for the quarter were $6.0 million, up from $3.5 million, and gross margin slipped to 29.4 percent of sales from 33 percent logged in the same period last year. Operating expenses stayed relatively level at around $5.0 million. Net loss improved to $2.9 million, or $.15 per share lost, from $3.6 million, or $.20 per share lost.

Martek experienced a high cost of sales associated with DHA and particularly AA production, which is currently manufactured by a third party. AA represents approximately two-thirds of Martek product sales, but the company expects costs to level out during 3Q02 when it plans to increase volume purchases.

In February, Mead Johnson Nutritional launched the baby formula Enfamil LIPIL with Martek's DHA and AA. In April, Ross Products Division of Abbott Laboratories expected to unveil its own infant formula with Martek's oils. The momentum for using the company's fatty acids in infant formulas was also given a boost from a National Institutes of Health study in the March edition of the American Journal of Clinical Nutrition (75, 3:570-580, 2002) indicating that infants weaned onto formulas containing these oils developed better eyesight.

For more information, visit www.martekbio.com or Booth #1300 at SupplySide East.

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