Mon, Oct 20, 2014, 10:54 PM EDT - U.S. Markets closed

Recent

% | $
Quotes you view appear here for quick access.

ChromaDex Corporation Message Board

  • clintonhasalwaysbeentheman clintonhasalwaysbeentheman Nov 26, 2012 11:44 PM Flag

    CDXC IS AN $11/SHARE STOCK ACCORDING TO THIS ARTICLE DATED 11/26/2012.....

    Most investors do not understand ChromaDex (CDXC) and are severely misinterpreting its progression as a company. Looking at the last decade of the ChromaDex’s existence as a laboratory services provider, investors hastily glance at its income statement and assume that its slow revenue growth rate is representative of the company’s growth rate and therefore indicative of the company’s future potential. What investors fail to understand is that ChromaDex is essentially Martek in its early years (before its $1.1 billion acquisition), and past revenue has very little to do with ChromaDex’s true value.

    In this essay, I will explain why ChromaDex will likely replicate the success of Martek that most notably produced omega-3 and omega-6 additives to infant formula and was acquired for $1.1 billion in December 2010 by Royal DSM NV, the world’s largest vitamins maker. This article is intended to neither encourage nor discourage investment, but solely to compare the business models, products, and prospects of ChromaDex and Martek. I believe most investors will be shocked at the similarities, which will have implications for the way they evaluate ChromaDex going forward.

    The Only Reason You Know “Omega-3 Fatty Acids” Is Because of Martek

    Do you recognize the term “omega-3 fatty acids”? It may surprise you to learn that the only reason you recognize this term is because Martek marketed the term to you.

    Martek spent millions of dollars aggressively advertising omega fatty acids so that these terms would have top-of-mind name recognition. Martek succeeded in convincing people that although the human body needs billions of chemical compounds (which everyone needs yet no one recognizes by name), “omega fatty acids” should be one of the few compounds they do recognize by name. Most importantly, it should be a compound they demand by name.

    After two decades of work, Martek succeeded. Today, despite the billions of chemical compounds in nature that are good for our bodies, we specifically ask for “omega fatty acids” by name. Unsurprisingly, Martek has benefited over a billion dollars from this orchestrated (albeit healthy) trend.

    Why ChromaDex Will Become the Next Martek

    Like Martek, ChromaDex understands that there are billion-dollar opportunities in the market for natural compounds. Similar to Martek, ChromaDex sells nature-identical compounds with irrefutable, self-evident health benfits. Essentially, both ChromaDex and Martek sell what already exists in nature: natural ingredients.

    Money-making opportunities exists for companies like Martek and ChromaDex because large vitamin, food and beverage, pharmaceutical, and cosmetic companies do not dedicate many resources to research and development, preferring simply to focus on increasing sales of existing products. Consequently, most companies in these industries have a small pipeline of upcoming products. Like Royal DSM, large companies are happy to pay a premimum for other companies that have done identified new products that will actually sell in the marketplace.

    Prior to its acquisition, Martek grew as a business by developing, marketing and selling nature-identical ingredients. Martek gained (and paid for) recognition of its omega-3 and omega-6 products in numerous scientific studies and even gained the recommendation of the World Health Organization. As more people became aware of omega fatty acids, sales grew.

    ChromaDex is already replicating Martek’s early success by obtaining scientific recognition for its products to promote greater market acceptance. Similar to Martek’s omega fatty acids, ChromaDex’s nature-identical pterostilbene (pTeroPure) is simply a natural antioxidant found in blueberries. pTeroPure is self-evidently good for the human body across a range of health areas, including blood pressure. Like omega-3 and omega-6 fatty acids in their early years, pTeroPure is beginning to receive broadening acclaim, increasing demand, and heightening scientific interest.

    * The USDA verifies several health claims for pTeroPure, including benefits for the human heart and nervous system
    * The American Heart Association hosted clinical results for pTeroPure
    * Cornell University and other Ivy League colleges are pTeroPure research partners
    * Frost & Sullivan named pTeroPure the 2010 North American Most Promising Ingredient of the Year
    * The University of Mississippi sponsored a phase 2/3 trial demonstrating that pTeroPure significantly reduces blood pressure in adults

    ChromaDex’s Differences With Martek Are Strengths

    Martek and ChromaDex do have some dissimilarities, but most of them simply reflect the older age of Martek. First, the companies are far different in size: Martek has over 500 employees and annual revenues over $450 million, while ChromaDex has under 60 employees and annual revenues over $10 million. Second, Martek’s omega-3 and omega-6 product lines are mature, while many of ChromaDex’s products are still under development. Third, ChromaDex’s lean advertising budget pales in comparison to the hundreds of millions of dollars that Martek dedicated to advertising. Fourth, Martek was able to position its omega-3 and 6 products as critical supplements to infant formula, whereas ChromaDex has USDA health claims and scientific evidence but no “celebrity” endorsements so far. Finally, pTeroPure has broad health benefits for all adults, whereas Martek advertised the health benefits of its infant formula for only a niche age population.

    Many of these differences, however, are strengths. ChromaDex has multiple products in its pipeline, most of which are well beyond the “proof of concept” stage and generating revenue. pTeroPure, for example, generated over $4 million in sales this year. Additionally, ChromaDex also has a legacy business of laboratory services that allows ChromaDex to gain foreknowledge of new trends in the natural products space. Because of its order flow from nearly all research laboratories, ChromaDex knows future demand and has proven this forecasting ability with its pTeroPure and ProC3G product lines, both of which were acquired for nominal amounts of money and generate millions in combined revenue.

    ChromaDex is also similar to Martek in that ChromaDex recognizes its need to be more than a one trick pony. Martek rode the success of its omega-3 and omega-6 supplements to branch out into additional lines of nutritional supplements by acquiring Amerifit Brands and its line of for consumer health and wellness products. Likewise, ChromaDex is developing additional products in addition to PteroPure, including nicotinamide riboside, a B-vitamin for energy and weight loss that is more effective than another B-vitamin called niacin, as well as anthocynin products with antioxidant and anticarcinogenic health benefits.

    Conclusion

    At its core, ChromaDex’s business model is identical to Martek’s business model.

    * Both companies offer healthy, nature-identical, no-side-effect alternatives to common drugs.
    * Both companies license intellectual property and manufacturing rights for natural ingredients and then advertise them to the vitamin, food and beverage, pharmaceutical, and cosmetic industries.
    * Both companies accurately predicted future demand of natural ingredients (pterostilbene/pTeroPure by ChromaDex and omega-3/-6 acids by Martek) and now generate substantial revenue from the demand.
    * Both companies completed additional human clinical studies to validate health benefits of their respective ingredients.
    * Both companies require years of lead time to advertise their ingredients to the world. (Top-of-mind name recognition does not happen overnight.)

    Although Martek (founded 1985) is an older company and therefore has achieved more milestones and revenue than ChromaDex (founded 1999), ChromaDex is nearly identical in its progression toward Martek’s billion-dollar status. Moreover, by having multiple products in its pipeline and constantly sensing industry order flow through its laboratory, ChromaDex compares favorably with Martek. With millions of dollars in pTeroPure sales over just two years, ChromaDex appears to have massive potential over the next two decades that correspondingly empowered Martek’s billion-dollar acquisition.

    Sentiment: Strong Buy

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • The elaborate and cleverly written comparison between CDXC and Martek is more fantasy than honest analysis of the respective histories and future prospects for the two very different companies, operating in vastly different market environments, and economic paradigms.

      The first deception is in this PR company written article is the claim that the term "Omega 3 fatty acids" was popularized by Martek. It is rather astonishing and easily disprovable statement. The term was in popular use for more then 20 years before Martex was founded.

      In fact, the term Omega 3 fatty acids is almost synonmous with fish oil, not the algae-based additive that Martek introduced.

      The omega 3 - DHA market is massive, easily many tens of thousands of times that of Pterostilbene and related compounds. In fact fish oil supplements have been the first or second largest selling nutritional product in both the US and Europe for the past ten or more years. The Martek product offered a vegetable-based alternative to the marine sources of this compound. It tapped into an existing market of massive proportions. There is basically no market for pteroblue.

      In fact the market for pterostilbene did not exist until about a year ago, and has failed to grow in any significant way. The compound has not been able to gain traction amongst consumers, and has virtually zero name recognition.

      The comparison between the products being sold by CDXC and Martek (now DSM), is fictional, misleading, and deceptive. They actually represent opposite ends of the market and economic spectrums.

      The fictional analysis posits that the two companies share histories and therefore the future of CDXC will mirror that of Martek. This is a bit preposterous. Martek developed a proprietary and highly sophisticated technology for the extraction of Omega 3 DHA from a genetically engineered algae. This is serious and valuable intellectual property. They also utilized their own technology to produce and sell a product profitiably.

      CDXC has not developed any technology of value. It simply purchased a license from the USDA, of debatable value, to be able to claim that its pterostilbene had anti-cholesterol properties. They then commissioned a study at a single university, which failed to confirm this benefit. This is a far cry from the Martek situation.

      Martek produced their own Omega 3 additive for the functional food, primarily baby food, market and their product was accepted with great success by manufacturers. At the time Martek introduced its green omega 3 product, the health benefits of these fatty acids had been well documented by thousands of clinical trials, and the FDA accepted them as a basis for making health claims. The products of CDXC, both current and prospective ones, have no such validation, nor does the FDA permit claims of any type to be make for them.

      CDXC buys their pterostilbene from India and simply brands and resells it, at a large and continuing loss, into a minuscule market, less than 0.01% of the size of the Market which Martek sold their product into. It is not a growing market either, as is the Omega 3 market. So where is the comparison between these two companies? If you fail to see it, it is because it does not exist.

      Contrary to the conflated representations of the company comparison, the products that CDXC has in their pipeline are even less interesting than pterostilbene. Like pterostilbene, these products are serving a non existent market.

      It would appear that the comment was written as an attempt to convince investors that the company will pull itself out of near bankruptcy and become a billion dollar acquisition target. Unfortunately, the facts say something entirely different.

    • and da stuff works

      Sentiment: Strong Buy

      • 2 Replies to A Yahoo! User
      • Very very good post clinton.

        Sentiment: Strong Buy

      • The elaborate and cleverly written comparison between CDXC and Martek is more fantasy than honest analysis of the respective histories and future prospects for the two very different companies, operating in vastly different market environments, and economic paradigms.

        The first deception is the claim in the article that the term Omega 3 fatty acids was coined or popularized by Martek. Nothing could be further from the truth. It is rather astonishing and easily disprovable statement.

        In fact, the term Omega 3 fatty acids is, and always has been, closely associated with fish oil, not the algae-based additive that Martek introduced. The omega 3 - DHA market is massive, roughly many tens of thousands of times that of Pterostilbene. In fact fish oil supplements have been the first or second largest selling nutritional product in both the US and Europe for the past ten or more years. The Martek product offered a vegetable-based alternative to the marine sources of this compound. It tapped into an existing market of massive proportions.

        The market for pterostilbene, conversely, did not exist until about a year ago, and has not materialized in any significant way. The compound has failed to gain traction amongst consumers, and has virtually zero name recognition.

        The comparison between the products being sold by CDXC and Martek (now DSM), is fictional, misleading, and deceptive. They actually represent opposite ends of the market and economic spectrum.

        The fictional analysis posits that the two companies share histories and therefore the future of CDXC will mirror that of Martek. This is a bit preposterous. Martek developed a proprietary and highly sophisticated technology for the extraction of Omega 3 DHA from a genetically engineered algae. This is serious and valuable intellectual property. They also utilized their own technology to produce and sell a product profitiably.

        CDXC has not developed any technology of value. It simply purchased a license from the USDA, of debatable value, to be able to claim that its pterostilbene had anti-cholesterol properties. They then commissioned a study at a single university, which failed to confirm this benefit. This is a far cry from the Martek situation.

        Martek produced their own Omega 3 additive for the functional food, primarily baby food, market and their product was accepted with great success by manufacturers. At the time Martek introduced its green omega 3 product, the health benefits of these fatty acids had been well documented by thousands of clinical trials, and the FDA accepted them as a basis for making health claims. The products of CDXC, both current and prospective ones, have no such validation, nor does the FDA permit claims of any type to be make for them.

        CDXC buys their pterostilbene from India and simply brands and resells it, at a large and continuing loss, into a minuscule market, less than 0.01% of the size of the Market which Martek sold their product into. It is not a growing market either, as is the Omega 3 market. So where is the comparison between these two companies? If you fail to see it, it is because it does not exist.

        Contrary to the conflated representations of the company comparison, the products that CDXC has in their pipeline are even less interesting than pterostilbene. Like pterostilbene, these products are serving a non existent market.

        It would appear that the comment was written by a public relations company as an attempt to convince investors that the company will pull itself out of near bankruptcy and become a billion dollar acquisition target. Unfortunately, the facts say something entirely different.

        There are many other fallacies in the elaborate but simply wrong analysis, which I will not waste your time on, unless I am called upon to do so.

        Sentiment: Sell

    • The elaborate and cleverly written comparison between CDXC and Martek is more fantasy than honest analysis of the respective histories and future prospects for the two very different companies, operating in vastly different market environments, and economic paradigms.

      The first deception is the claim in the article that the term Omega 3 fatty acids was coined or popularized by Martek. Nothing could be further from the truth. It is rather astonishing and easily disprovable statement.

      In fact, the term Omega 3 fatty acids is, and always has been, closely associated with fish oil, not the algae-based additive that Martek introduced. The omega 3 - DHA market is massive, roughly many tens of thousands of times that of Pterostilbene. In fact fish oil supplements have been the first or second largest selling nutritional product in both the US and Europe for the past ten or more years. The Martek product offered a vegetable-based alternative to the marine sources of this compound. It tapped into an existing market of massive proportions.

      The market for pterostilbene, conversely, did not exist until about a year ago, and has not materialized in any significant way. The compound has failed to gain traction amongst consumers, and has virtually zero name recognition.

      The comparison between the products being sold by CDXC and Martek (now DSM), is fictional, misleading, and deceptive. They actually represent opposite ends of the market and economic spectrum.

      The fictional analysis posits that the two companies share histories and therefore the future of CDXC will mirror that of Martek. This is a bit preposterous. Martek developed a proprietary and highly sophisticated technology for the extraction of Omega 3 DHA from a genetically engineered algae. This is serious and valuable intellectual property. They also utilized their own technology to produce and sell a product profitiably.

      CDXC has not developed any technology of value. It simply purchased a license from the USDA, of debatable value, to be able to claim that its pterostilbene had anti-cholesterol properties. They then commissioned a study at a single university, which failed to confirm this benefit. This is a far cry from the Martek situation.

      Martek produced their own Omega 3 additive for the functional food, primarily baby food, market and their product was accepted with great success by manufacturers. At the time Martek introduced its green omega 3 product, the health benefits of these fatty acids had been well documented by thousands of clinical trials, and the FDA accepted them as a basis for making health claims. The products of CDXC, both current and prospective ones, have no such validation, nor does the FDA permit claims of any type to be make for them.

      CDXC buys their pterostilbene from India and simply brands and resells it, at a large and continuing loss, into a minuscule market, less than 0.01% of the size of the Market which Martek sold their product into. It is not a growing market either, as is the Omega 3 market. So where is the comparison between these two companies? If you fail to see it, it is because it does not exist.

      Contrary to the conflated representations of the company comparison, the products that CDXC has in their pipeline are even less interesting than pterostilbene. Like pterostilbene, these products are serving a non existent market.

      It would appear that the comment was written by a public relations company as an attempt to convince investors that the company will pull itself out of near bankruptcy and become a billion dollar acquisition target. Unfortunately, the facts say something entirely different.

      There are many other fallacies in the elaborate but simply wrong analysis, which I will not waste your time on, unless I am called upon to do so.

    • The elaborate comparison between CDXC and Martek is more fantasy than it is a cogent analysis of the respective histories and prospects for the two very different companies, operating in vastly different market environments, and economic paradigms.

      The first deception is the claim in the article that the term Omega 3 fatty acids was coined or popularized by Martek. Nothing could be further from the truth.

      In fact, the term Omega 3 fatty acids is, and always has been, closely associated with fish oil, not the algae-based additive that Martek introduced. The omega 3 - DHA market is massive, roughly many tens of thousands of times that of Pterostilbene. In fact fish oil supplements have been the first or second largest selling nutritional product in both the US and Europe for the past ten or more years. The Martek product offered a vegetable-based alternative to the marine sources of this compound. It tapped into an existing market of massive proportions.

      The market for pterostilbene, conversely, did not exist until about a year ago, and has not materialized in any significant way. The compound has failed to gain traction amongst consumers, and has virtually zero name recognition.

      The comparison between the products being sold by CDXC and Martek (now DSM), is fictional, misleading, and deceptive. They actually represent opposite ends of the market and economic spectrum.

      The fictional analysis posits that the two companies share histories and therefore the future of CDXC will mirror that of Martek. This is a bit preposterous. Martek developed a proprietary and highly sophisticated technology for the extraction of Omega 3 DHA from a genetically engineered algae. This is serious and valuable intellectual property. They also utilized their own technology to produce and sell a product profitiably.

      CDXC has not developed any technology of value. It simply purchased a license from the USDA, of debatable value, to be able to claim that its pterostilbene had anti-cholesterol properties. They then commissioned a study at a single university, which failed to confirm this benefit. This is a far cry from the Martek situation.

      Martek produced their own Omega 3 additive for the functional food, primarily baby food, market and their product was accepted with great success by manufacturers.

      CDXC buys their pterostilbene from India and simply brands and resells it, at a large and continuing loss, into a minuscule market, less than 0.01% of the size of the Market which Martek sold their product into. It is not a growing market either, as is the Omega 3 market. So where is the comparison between these two companies? If you fail to see it, it is because it does not exist.

      There are many other fallacies in the elaborate but simply wrong analysis, which I will not waste time on, unless I am called upon to do so.

 
CDXC
1.020.00(0.00%)Oct 20 2:52 PMEDT

Trending Tickers

i
Trending Tickers features significant U.S. stocks showing the most dramatic increase in user interest in Yahoo Finance in the previous hour over historic norms. The list is limited to those equities which trade at least 100,000 shares on an average day and have a market cap of more than $300 million.