A Hawaii company gained ground in the first quarter selling what it promotes as a new synthetic remedy for inflammation after years of research and development that has consumed $56 million of investment capital.
Honolulu-based Cardax Inc. said sales of its product ZanthoSyn more than tripled in the first three months of this year compared with the prior five months, which included the start of sales over the internet in August.
First-quarter sales totaled $107,990 and compared with $35,258 in the last five months of 2016. The combined $143,248 represents all the revenue for Cardax since it was established in 2006.
FIRST-QUARTER LOSS
$450,836
YEAR-EARLIER LOSS
$677,746
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In January, Cardax rolled out its product, a synthetic version of the naturally occurring marine compound astaxanthin, in 29 Hawaii GNC stores as a dietary supplement and has devoted much effort to educating store managers about ZanthoSyn and providing them with incentives to sell it, according to Cardax.
“Our in-depth interactions, including multiple store visits and educational seminars, provide the GNC store managers with a thorough understanding of the broad role ZanthoSyn can play at GNC and in the lives of their customers,” David M. Watumull, a Cardax vice president heading operations, said in a statement.
CARDAX added that the outreach and incentive program aligns with a new GNC business model that focuses on “solutions-based selling” that combines products into bundles targeting customer health needs.
“Given that ZanthoSyn can be utilized as a safe anti-inflammatory for joint, heart, liver, metabolic, brain, and athletic health, it can be a foundational product for virtually all GNC bundles,” Watumull said.
Cardax advertises its bottles of ZanthoSyn containing 60 capsules for $39.99 to $49.99 each.
Cardax also is trying to convince physicians to recommend ZanthoSyn to patients, and has held educational meetings with more than 100 physicians primarily in Hawaii.
Company CEO David G. Watumull said in a statement announcing the recent sales that Cardax is building a strong foundational business model for future growth in Hawaii and on the mainland.
The company has done clinical studies on its product, which it says is purer and more easily absorbed than natural astaxanthin, but cannot sell it as a medicine. Under Food and Drug Administration regulations, Cardax can say its product is generally regarded as safe but also indicates on packaging that stated health claims have not been evaluated by the FDA. A disclaimer also states, “This product is not intended to diagnose, treat, cure, or prevent any disease.”
Cardax said it expects to continue its initial marketing efforts focused on outreach to physicians, health care professionals and consumers.
In the first quarter, the company said it had $80,041 in sales and marketing expenses. After other expenses the company’s net loss was $450,836. However, that was an improvement from a $677,746 loss in the first quarter of last year.
To help maintain operations, Cardax raised $289,000 from investors in the first quarter and another $190,000 from April to May 8. Since the company’s inception it has raised $56 million.
Cardax released its financial report for the quarter Monday. Shares of Cardax stock closed Tuesday at 16 cents, down a penny from 17 cents on Monday. Cardax shares over the last 52 weeks have closed between a low of 4 cents on Oct. 13 and a high of 23 cents on April 10.