COLUMBIA, Md., June 21 /PRNewswire-FirstCall/ -- Martek
Biosciences Corporation (Nasdaq: MATK) announced today that it has
extended its sole-source supply agreement with Mead Johnson &
Company, LLC, for DHA (docosahexaenoic acid) and ARA (arachidonic
acid) for infant formula products. Under the terms of the
amendment, Martek will remain Mead Johnson's global sole-source
supplier of DHA and ARA for all of its infant formula products
through December 31, 2015, an
extension of four years beyond the earliest possible termination
date of the current agreement.
"This agreement solidifies a significant additional portion of
Martek's base infant formula business and continues Martek's strong
relationship with Mead Johnson, a global leader in pediatric
nutrition that has been a leading innovator and proponent of the
clinical importance and demonstrated benefits of DHA and ARA in
infant development," said Steve
Dubin, Martek CEO. "This agreement is further evidence that
Martek's trusted, high quality nutritional products, patent
position, production capacity, strong research and science base,
and long history of experience in DHA and ARA manufacturing and
technology will continue to provide us a meaningful competitive
advantage in the marketplace."
Martek has been supplying DHA and ARA to Mead Johnson for use in
infant formula under a global 25-year license agreement executed in
1992. In May 2006, Martek and Mead
Johnson entered into a supply agreement that established Martek as
Mead Johnson's global sole-source supplier of DHA and ARA for use
in its infant formula products. Mead Johnson first launched infant
formulas containing Martek's DHA and ARA in international markets
in 2000. Mead Johnson launched Enfamil LIPIL®, the first infant
formula in the U.S. to feature DHA and ARA, in 2002.
Under the terms of the amendment, Martek will continue to be
Mead Johnson's global sole-source supplier of DHA and ARA for all
of its infant formula products through December 31, 2015, an incremental four years
beyond the terms of the prior agreement. In addition, Mead Johnson
has the option to further extend the term of the agreement for an
additional four years beyond 2015. The amendment also provides
graduated price reductions to Mead Johnson over the term of the
extension, beginning in 2010. The financial terms of this
amendment were factored into the company's recent financial
guidance provided during its second quarter conference call on
June 3, 2010. Martek's strategy
is to offset a significant portion of price reductions that result
from its infant formula contract extensions by implementing
manufacturing cost savings and product innovation initiatives, and
by growing its non-infant formula business.
Naturally present in human breast milk, DHA and ARA are fatty
acids important to infant development and growth. Clinical studies
have demonstrated numerous benefits for infants receiving DHA and
ARA supplemented formula, including improved mental and visual
development. Martek's blend of DHA and ARA, life'sDHA™
& life'sARA™, is the only source of these nutrients
currently used in U.S. infant formula, and is present in more than
99 percent of infant formula sold in the U.S. Additionally, Martek
is a leading global supplier of DHA and ARA, and infant formulas
containing Martek's nutritional oils are available in more than 75
countries worldwide.
Martek Biosciences Corporation is a leader in the innovation and
development of DHA and ARA and has developed patented technology
for the production and use of these ingredients. DHA omega-3
products promote health and wellness through every stage of life
and ARA omega-6 products support growth and development in infants
and children. The company produces life'sDHA™, a
sustainable, vegetarian source of DHA omega-3, for use in foods,
beverages, infant formula and supplements, and life'sARA™, a
sustainable vegetarian source of ARA omega-6, for use in infant
formula and growing-up milks. For more information on Martek
Biosciences, visit http://www.martek.com/. For more
information on products containing life'sDHA and
life'sARA, visit http://www.lifesdha.com/.
Sections of this release contain forward-looking statements.
These statements are based upon numerous assumptions which Martek
cannot control and involve risks and uncertainties that could cause
actual results to differ. These statements should be understood in
light of the risk factors set forth in the company's filings with
the Securities and Exchange Commission, including, but not limited
to, the company's Form 10-K for the fiscal year ended October 31, 2009 and other filed reports on Form
10-K, Form 10-K/A, Form 10-Q and Form 8-K.
Contact:
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Kyle Stults
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Investor Relations
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(410) 740-0081
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investors@martek.com
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SOURCE Martek Biosciences Corporation