Pheromone company remains in the red
marketing mood-enhancing pheromones to the cosmetics and personal
care industry, has reported end of years sales sharply up on last
year, as the compound proves increasingly popular - but steep
R&D costs mean it remains unprofitable, reports Simon
Pitman.
For the three months ending December 31, 2004, net sales from on-going operations were $432,000, representing a 208 per cent increase from sales of $140,000 in same period in 2003, and resulted in a loss from on-going operations of $76,000 as compared with a loss from on-going operations of $171,000 for the same period of 2003, a performance which cut back the losses by 56 per cent.
For the full year, net sales of $1,140,000, represented a 76 per cent increase the $646,000 in 2003. However, for the year as a whole, the performance losses from continuing operations of $570,000 compared with a loss from continuing operations of $577,000 for the same period of 2003 revealed a weaker bottom line for the company over the first three quarters of the year.
"The growth in revenues for both the quarter and the full year from the 2003 periods reflects significant increases in sales of our mood enhancing compounds to current licensees in both periods and the addition of the Natural Attraction from Demeter Fragrance Library product line sales that were launched in April 2004," a company spokesperson said.
Explaining the lower profit margins for the first three quarters of the year, the spokesperson added: "In both periods, research and development costs increased due to the funding of studies on several new naturally-occurring compounds that the company believes may be incorporated in future products. The increase in selling, marketing and administrative costs were primarily associated with the launch of the Natural Attraction from Demeter line as well as new initiatives implemented to enhance shareholder value."
Pheromones are odourless complex organic compounds - invisible to the five human senses - and are found on the surface of both animal and human skin. Upon release, the chemicals stimulate a system of receptors, which researchers have discovered are detected by an organ found 3 inches inside the nose (formally known as the Vomeronasal organ).
It is in this respect that pheromones create an alluring aura to the opposite sex - literally - a concept which marketers of cosmetics fragrances and personal care products have used for many years, and, it may be added, with a great deal of success.
In an effort to increase its presence in this niche sector, Human Pheromones Sciences has been upping its research capabilities in a bid to further develop the potential of the compound to the cosmetics and personal care industry. In accordance with these aims the company announced in November last year that it was combining with the University of Utah to conduct research and development programmes on a series of compounds already identified and isolated by scientists relating to synthesised human pheromones. The move aims to enhance the efficacy of the substance in fragrances.