Martek Biosciences Corp. offered a glimmer of hope to the cash-starved biotechnology sector yesterday, reporting revenue that tripled and a $375,000 profit. Its earnings thrust the Columbia maker of nutritional oils into the tiny club of biotechnology firms operating in the black.
Martek's revenue surged to $15.1 million for the quarter ended Oct. 31 from $5.8 million in the year-earlier period, reflecting higher sales of infant formulas containing its nutritional oils.
Its profit of 2 cents per share followed a loss of $3.6 million (18 cents) during the same period last year.
The company's fiscal year ended with a loss of $24.2 million ($1.10) on $46.1 million in revenue. The previous year, Martek reported a loss of $13.7 million (73 cents) on $18.8 million in revenue.
Martek's nutritional oils contain omega fatty acids, widely touted for improving mental and visual development in infants. Sales of the oils accounted for 80 percent of fourth-quarter revenue, the company said.
After encountering fierce resistance from formula makers for almost a decade, Martek has persuaded the nation's biggest formula manufacturers -- and their consumers -- to use its nutrients. Mead Johnson & Co., Wyeth and Abbott Laboratories now market formula enriched with Martek's algae-based fatty acids, which resemble those found in breast milk.
"The consumer believes that omega-3 fatty acids have a benefit," said Scott Van Winkle, an analyst at investment bank Adams, Harkness & Hill.
Martek went public in 1993, promising investors big profits on sales of its nutritional oils. But convincing investors was not the problem; selling the concept to everybody else was. Formula makers questioned the product's money-making potential, doctors questioned its health benefits, and government regulators questioned its safety.