ChromaDex shares soar 68% after strong earnings report

Ingredient supplier ChromaDex reported a large revenue increase that sent the company’s stock price soaring in trading over the past two sessions.

ChromaDex, which supplies Niagen, a proprietary form of nicotinamide riboside, reported third-quarter earnings on Thursday. The company brought in $25.6 million in the quarter, which represents a 31% year-over-year increase.

The company reported earnings of 2 cents a share. While modest, those earnings beat analysts’ estimates by 100%. Earnings of 1 cent a share had been forecast.

The market responded enthusiastically to the news, sending the stock price up nearly 68% in trading on Friday. The stock held on to most of those gains since then. The stock is trading at $5.97 today, while the share price opened on Friday at $2.37.

Long road for Niagen

ChromaDex has marketed Niagen, which is a form of vitamin B3, via a consumer brand under the name Tru Niagen. Sales of the direct-to-consumer brand accounted for $18.1 million in the quarter. The company also sells the ingredient directly to formulation partners.

The company has also been begun marketing a “pharmaceutical grade” of the ingredient, collectively branded as Niagen +, which also includes forms administered by injection under a prescription.

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“We are proud to report our best quarter to date, achieving $25.6 million in revenue, an impressive 31% increase year over year, supported by a strong gross margin of 63.5%, record-setting net income of $1.9 million, and healthy cash flows that have grown our operating cash to $32.4 million,” said ChromaDex CEO Rob Fried.

The positive earnings mark a milestone for the company, which has followed a long and sometimes winding road to this point.

ChromaDex started as an analytical chemistry company and that is still part of its business.  Along the way the company also started to license IP for ingredient development, which is how Niagen came into the fold. The original patents were held by Dartmouth University.

Niagen hits Elysium snag

The Niagen development story hit a significant snag when ChromaDex got into a protracted legal battle with its erstwhile customer Elysium Health, an anti-aging supplement company founded in 2014 by MIT professor Leonard Guarente, Ph.D., with other partners. 

A jury determined in 2021 that ChromaDex had overcharged Elysium for the Niagen and pterostilbene ingredients used in Elysium’s anti-aging supplement Basis. ChromaDex recovered some of the money and interest it alleged it was owed but fell short on some of its other claims.  The company did not appeal the verdict.

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