Portland-based ImmuCell Corp.’s sales declined in 2016 from the previous year, according to preliminary financial results released by the company.
ImmuCell said the re-emergence of a competitor’s previously shelved product was partly to blame.
Sales for the year totaled $9.5 million, compared with $10.2 million during the previous year, a 7 percent decline, the company said. Sales for the fourth quarter of 2016 totaled $2.2 million, compared with $2.7 million during the fourth quarter of 2015, an 18 percent decline.
The company’s net income for 2016 was $508,000, or 12 cents per share, compared with $1.2 million, or 38 cents per share, in 2015. Net income for the fourth quarter of 2016 was $30,000, or less than 1 cent per share, compared with $289,000, or 9 cents per share, a year earlier.
“Financial results for fourth quarter and full year 2016 were impacted by the return to the market of a competitive product that was largely off the market from late 2014 to the middle of 2015,” ImmuCell said in a news release. “Market conditions in the dairy and beef industries, including milk pricing and prices for bull calves, were stronger during 2015 than in 2016. Despite lower 2016 sales, revenue since 2012 has grown at a 15.4 percent compounded annual rate.”
ImmuCell develops all-natural products to prevent and treat diseases among dairy and beef cattle. Its flagship product, First Defense, contains antibody-rich colostrum – milk produced in late pregnancy – in capsule form. It can be fed to newborn calves to help prevent scours, which causes diarrhea and dehydration. First Defense, which costs $6 for a one-time dose, is a natural product made from cow’s milk that is approved for organic farming.
In early 2015, ImmuCell’s sales and profits exploded after harsh environmental conditions faced by cattle ranchers in places like California and Texas significantly increased the value of cattle.
Its sales jumped so dramatically – by more than 60 percent – in the first quarter of 2015 that purchase orders outstripped the company’s production capacity, a problem that took months to resolve through equipment upgrades and expansion. First Defense must be administered within the first 48 hours of a calf’s birth to be effective, so shipment delays forced some customers to cancel their orders.
Company officials said the supply issue has been resolved, and that ImmuCell is now focused on winning back the customers it lost.
“The manufacturing issues that impacted our performance during 2016 are behind us,” said Bobbi Jo Brockmann, vice president of sales and marketing. “We are off to a strong start to the new year. With inventory back to our target level, we are re-engaging customers lost during the period of scarce product supply and acquiring more new customers. This makes us optimistic about the long-term health of our business.”
ImmuCell also continues to build a new production facility in Portland for nisin, the active ingredient in a product it has developed called Mast Out, for which it is seeking U.S. Food and Drug Administration approval. Construction on the $20 million pharmaceutical-grade facility began in fall 2016 with the help of tax increment financing from the city of Portland.
Mast Out is a natural treatment for mastitis, inflammation of breast tissue that can afflict lactating dairy cows. Existing antibiotic treatments render the milk unsalable temporarily, causing a loss of revenue to the farmers. However, with the FDA’s approval, milk from cows treated with Mast Out could be sold immediately, giving the product a competitive edge.
ImmuCell is one of a handful of publicly held companies based in Maine. It trades on the Nasdaq exchange under the symbol ICCC.
J. Craig Anderson can be contacted at 791-6390 or at:
Send questions/comments to the editors.
