(PRWEB) August 31, 2012
As the authority source for photochemical reference materials, ChromaDex has the benefit of understanding market demand for ingredients far before many of its end markets do. The legacy lab business was able to sense, for example, growing demand for stevia sweetener many years prior to commercialization based on the spike in stevia extract orders. It was able to leverage the same intellectual capital advantage to develop nictoinamide riboside (NR), a vitamin precursor of coenzyme NAD. Gould Partners believes that this vitamin will result in even greater positive awareness of the legacy business and make the firm an established consultant for the pharmaceutical, beverage & food, and dietary supplement industries.
NR: THE "NO FLUSH" NIACIN ALTERNATIVE
Research has shown that NR can be converted to NAD in a process that extends the lifespan of yeast cells via increasing NAD-dependent Sir2 enzyme activity and NAD levels. ChromaDex recently licensed exclusive patent rights to the technology behind engineered yeast fermentation of NR. NAD has already shown to yield positive metabolic effects; improve cardiovascular health, cognitive function, glucose levels and insulin activity; and protect against neurodegeneration, the effects of aging, and weight gain on a high-lipid diet. The product is thus diversified across a variety of high-growth unmet needs. Moreover, ChromaDex offers several other products, like pTeroPure, that target similar markets and provide multiple cross-selling opportunities.
NAD precursor vitamins nicotinamide and nicotinic acid, collectively called "niacin or vitamin B3" are widely applied in energy drinks, milk, and meat, among other household goods. Abbott Labs' NIASPAN is the FDA-aproved leader in niacin, which has shown to boost HDL ("good") cholesterol, lower bad cholesterol, and slow the buildup of clogging plaque. But the product has also commonly resulted in a flushing so severe that Abbott dedicates an entire page of its NIASPAN website to helping consumers deal with the side effect. The issue has been further compounded by a recent study that found it failed to prevent heart attacks.
ChromaDex's NR has shown no "flushing" side effects with similar positive effects at lower dosing. Since the company has additional manufacturing patents from Cornell University, the path to commercialization will be relatively short. This will likely pronounce stock reactions to data announcements.
WHY BILLIONAIRE PHILLIP FROST, HONIG ARE BUYING
In light of the impressive product portfolio, it should be of no surprise that the firm's largest shareholder is Billionaire healthcare investor Phillip Frost. He now owns roughly one-fifth of the business and has leveraged his position at Opko Health to extend the firm's distribution network to Latin America and emerging markets. Frost is also the Chairman of the world's largest generic producer and Israel's largest public company Teva Pharmaceutical. The speculation over the firm's largest shareholder further extending products across top patient populations will protect investors from any downside momentum in the stock price. At the same time, should any connections materialize, the stock has more room to appreciate - making for favorable risk/reward.
Phillip Frost is not the only wealthy investor backing ChromaDex. Corporate finance specialist Barry Honig has parlayed large sums of money into small-cap stocks and generated strong returns time and time again. Growing revenues form $3M to north of $125M, he actively led InterCLICK as Chairman to its $270M buyout from Yahoo! He is now actively accumulating shares of ChromaDex with the most recent purchase being 8/15/12. Honig actually shares an office with Frost who has also been adding to his leading stake. The product line - from NR to pTeroPure and CG3 - and lab testing businesses have already established sustainable competitive advantages to drive the growth story going forward. If these investors (1) continue to not only put their money where their mouths are while (2) adding to the underlying fundamentals, ChromaDex will have even more impressive days ahead. Investors are encouraged to buy shares before the major data announcement on pTeroPure, so as to maximize upside potential.
Disclaimer: The distributor of this research report, Gould Partners, is not a licensed investment adviser or broker dealer. We are a consultant to a third-party representing ChromaDex and have received three thousand five hundred dollars for independent research. Investors are cautioned to perform their own due diligence as information contained within this report has been derived from public sources and cannot be guaranteed by us to be fully accurate. Always discuss investments with a licensed professional before making any financial decision. Statements made herein are often "forward-looking statements" as defined under Section 27A of the Securities Act of 1933, Section 21E of the Securities Act of 1934, and the Private Securities Litigation Reform Act of 1995. Since these statements are uncertain, actual results may be materially different from those expected.