Earnings call transcript: Chromadex’s Q4 2024 earnings beat forecasts, stock rises

ChromaDex Corporation reported a robust fourth quarter for 2024, surpassing earnings expectations with an EPS of $0.09 compared to the forecasted $0.02. The company also exceeded revenue forecasts, posting $29.1 million against the anticipated $26.78 million. Following the earnings release, ChromaDex’s stock saw a 2.86% rise in aftermarket trading, reaching $5.76 per share. According to InvestingPro data, the company maintains an impressive overall financial health score of 3.12, labeled as "GREAT," with particularly strong growth and profit metrics.

Key Takeaways

• ChromaDex’s Q4 2024 EPS of $0.09 significantly surpassed the $0.02 forecast.
• Revenue reached $29.1 million, outperforming expectations by over $2 million.
• The company’s stock climbed 2.86% in aftermarket trading.
• Strong performance driven by product innovation and operational efficiency.
• Projected 18% revenue growth for 2025.

Company Performance

ChromaDex’s Q4 2024 results reflect a strong performance, with record revenues of $29.1 million, marking a 37% increase year-over-year. The full-year net revenues reached $99.6 million, a 19% growth compared to 2023. The company reported a net income of $7.2 million for the fourth quarter and $8.6 million for the entire year. ChromaDex ended the year with $44.7 million in cash and no debt, demonstrating significant financial strength and operational efficiency. InvestingPro analysis reveals a strong current ratio of 2.95, indicating excellent liquidity, while the company’s Altman Z-Score of 9.08 suggests minimal bankruptcy risk.

Financial Highlights

• Revenue: $29.1 million in Q4 2024 (+37% YoY)
• Earnings per share: $0.09 in Q4 2024
• Gross margins improved to 62.5% in Q4
• Positive cash flow from operations: $12.1 million

Earnings vs. Forecast

ChromaDex’s Q4 2024 earnings per share of $0.09 exceeded the forecast of $0.02 by 350%. The revenue of $29.1 million also surpassed the expected $26.78 million, representing a 9% surprise. This performance indicates significant operational improvements and market demand for the company’s products.

Market Reaction

Following the earnings announcement, ChromaDex’s stock rose by 2.86% in aftermarket trading, closing at $5.76. This positive market reaction reflects investor confidence in the company’s strong financial performance and future growth prospects. The stock’s current price remains below its 52-week high of $7.974 but significantly above the 52-week low of $1.57. Based on InvestingPro Fair Value analysis, the stock appears to be trading above its intrinsic value, with a beta of 2.21 indicating higher volatility than the broader market. Investors can access detailed valuation metrics and 13 additional ProTips with an InvestingPro subscription.

Outlook & Guidance

Looking ahead, ChromaDex projects an 18% revenue growth for 2025, with expectations of modest improvements in gross margins. The company plans to continue investing in research and development, particularly in new product formulations and potential pharmaceutical applications. A corporate rebranding is also on the horizon, alongside a potential spin-off for drug development. InvestingPro data shows that three analysts have revised their earnings estimates upward for the upcoming period, with analyst price targets ranging from $5 to $12 per share. Get access to the comprehensive Pro Research Report covering ChromaDex and 1,400+ other US stocks for deeper insights into the company’s potential.

Executive Commentary

CEO Rob Fried stated, "2024 was a defining year for ChromaDex, driving profitable growth through operational excellence and fiscal discipline." He expressed confidence in the FDA’s regulation of NMN products and downplayed the potential impact of tariffs on international business. CFO Ozan Pamir highlighted the company’s focus on operational excellence and fiscal discipline as key drivers of their success.

Risks and Challenges

• Supply chain issues, particularly with NIAGEN IV, could affect product availability.
• Market saturation in NAD and NR supplements may limit growth.
• Macroeconomic pressures, such as tariffs, could impact international sales.
• The company faces challenges in combating market fraudsters and patent infringers.
• Regulatory changes could influence product offerings and market access.

Q&A

During the earnings call, analysts inquired about the potential market for Parkinson’s disease treatment and the challenges of NAD testing and measurement. Executives addressed concerns over tariffs and international business operations, emphasizing their limited impact on the company’s overall performance.

Full transcript - Chromadex Corp (NASDAQ:CDXC) Q4 2024:

Conference Operator: Ladies and gentlemen, thank you for standing by and welcome to ChromaDex Corporation’s Fourth Quarter of twenty twenty four Earnings Conference Call.

Frilla, Conference Operator, ChromaDex: My name is Frilla, and I will be your conference operator today. At this time, all participants are in a listen only mode. And as a reminder, this conference call is being recorded. This afternoon ChromaDex issued a news release announcing the company’s financial results for the fourth quarter of twenty twenty four. If you have not reviewed this information, both are available within the Investor Relations section of ChromaDex’s website at www.chromadex.com.

I would now like to turn the conference over to Ben Shumshan, Vice President of LATAM Partners. Please go ahead, Mr. Shumshan.

Ben Shumshan, Vice President of LATAM Partners, ChromaDex: Thank you. Good afternoon, and welcome to ChromaDex Corporation’s fourth quarter of twenty twenty four results conference call. With us today are ChromaDex’s Chief Executive Officer, Rob Fried, Chief Financial Officer, Ozan Pamir and Senior Vice President of Scientific and Regulatory Affairs, Doctor. Andrew Shapp, who will join the call for Q and A. Today’s conference call may include forward looking statements, including statements related to ChromaDex’s research and development and clinical trial plans and the timing and results of such trials, the timing of future regulatory filings, the expansion of the sale of Niagen products and ingredients in new markets, business development opportunities, future financial results, cash needs, operating performance, investor interest and business prospects and opportunities, as well as anticipated results of operations.

Forward looking statements represent only the company’s estimates on the date of this conference call and are not intended to give any assurance as to actual future results. Because forward looking statements relate to matters that have not yet occurred, these statements are inherently subject to risks and uncertainties. Many factors could cause ChromaDex’s actual activities or results to differ materially from the activities and results anticipated in forward looking statements. These risk factors include those contained in ChromaDex’s quarterly reports and Form 10 ks most recently filed with the SEC, including results of operations, financial condition, cash flows, as well as impact of global markets and economic conditions on our business. Please note that the company assumes no obligation to update any forward looking statements after the date of this conference call to conform with forward looking statements, actual results or to changes in its expectations.

In addition, certain financial information presented in this call reference non GAAP financial measures. The company’s earnings presentation and earnings press release, which were issued this afternoon, are available on the company’s website, present reconciliations to the appropriate measures. Finally, this conference call is being recorded via webcast. The webcast will be available at the Investor Relations section of our website at www.chromadex.com. With that, it’s now my pleasure to turn the call over to our Chief Executive Officer, Rob Fried.

Rob Fried, Chief Executive Officer, ChromaDex: Thank you, Ben, and welcome, everybody. In the fourth quarter, we delivered record revenues of $29,100,000 a 37% increase year over year and net income of $7,200,000 For the full year, we delivered net revenues of $99,600,000 a 19% growth year over year and net income of $8,600,000 We generated $12,100,000 in positive cash flow from operations in 2024 and we ended the year with $44,700,000 in cash and no debt. It appears that the world is finally catching on to the importance of NAD and the fact that nitrogen is the safest and most effective way to increase NAD levels, particularly in damaged cells. In the fourth quarter, our e commerce channel experienced robust organic growth with net sales of $17,300,000 a 30% increase year over year. Our food grade and pharmaceutical grade NIAGEN ingredient business had net sales of $5,300,000 a 96% increase year over year.

True NIAGEN distribution through our strategic partners, partners like Watson’s, remained consistently

Unidentified Speaker, ChromaDex: solid.

Rob Fried, Chief Executive Officer, ChromaDex: As the demand for NAD boosting products continues to grow, We’re seeing a proliferation of companies entering the arena that pursue misleading and dangerous practices. There are companies that knowingly infringe on the hard earned patents of others. There are companies that make false label claims, companies whose sloppy manufacturing processes introduce dangerous endotoxins, companies that claim to be science based but have never conducted a single study. We’re encouraged to see that Amazon (NASDAQ:AMZN) and other marketplaces have taken some steps to police this activity. We do hope to see more.

We need to see more action taken by the FDA and the FTC to prevent companies from deceiving consumers. And we’d also like to see the experts give advice on podcasts and newsletters to be more vigilant in screening brands. We plan to use our position as a leader in the industry to drive awareness to consumer safety and product excellence. To be candid, I personally would not take a supplement that did not say ChromaDex or NIAGEN on the label. Last August, we launched our NIAGEN plus product line and introduced NIAGEN IV and injections at clinics through a compound pharmacy network.

The launch started off very strong with pharmaceutical grade ingredient quickly selling out. But due to issues in the supply chain, we were delayed two to three months in pharmaceutical grade availability. We have now since resolved these issues. Today, NIAGEN I. V.

Is available in about 500 clinics nationwide. NIAGEN I. V. And NIAGEN injections

Conference Operator: are

Rob Fried, Chief Executive Officer, ChromaDex: on pace for great growth in the second half of this year. Last year, ChromaDex initiated communication with the FDA as part of the company’s effort to pursue an investigational new drug application for the use of NR in the treatment of ataxia telangiectasia AT. We continue to work with the agency to address its comments and its feedback. With regard to the NOPARC study for the use of NR in the treatment of Parkinson’s disease, the last participant was enrolled last June. So we expect that the study will be completed by June of this year.

We will not be able to see results for some time thereafter, but we very much look forward to sharing more updates on this and other pharmaceutical plans in the near future. In the coming weeks, we will be making an announcement that we are changing the company’s name to better represent the evolution of the company and the strategic direction of the company. This has been a major undertaking internally and we’re excited to finally share the company name. I believe this past year marks an inflection point for this company and that it is the right time to change our name to better align with our mission. In summary, your company is healthy, your company is growing and your company is very well positioned for the future.

Let’s now turn it over to Ozan. Ozan?

Ozan Pamir, Chief Financial Officer, ChromaDex: Thank you, Rob. It is a pleasure to speak to our investors, partners and employees who are here with us today. Having joined ChromaDex just a few months ago, I’ve been deeply impressed by the team’s dedication and the clear vision driving this company forward. It’s a privilege to be part of a team that is so committed to innovation and excellence. 2024 was a strong year for ChromaDex as the company exceeded all targets on its financial outlook.

As Rob mentioned, this past year was pivotal in building momentum for even greater success. In both the fourth quarter and full year of 2024, we delivered outstanding financial performance while advancing key strategic initiatives. Before diving into the details of the quarter, I want to take a moment to highlight our full year performance. For the full year, we delivered total net sales of $99,600,000 a 19% year over year increase, gross margins of 61.8% reflecting continued operational efficiency selling and marketing expenses down approximately 200 basis points as a percentage of net sales an increase in R and D investments of $1,100,000 and a decrease in general and administrative expenses of $6,600,000 year over year, better than our outlook of down $1,500,000 And we achieved net income of $8,600,000 a sharp turnaround from a net loss of $4,900,000 for the fiscal year ’20 ’20 ’3 and generated $12,100,000 in operating cash flows. Our results are a testament to the company’s strong financial discipline and focused execution.

Through diligent cost management and strategic resource allocation, we have driven growth, improved profitability and enhanced operational efficiency, all while continuing to invest in innovation and the future of our business. Now, let’s review the fourth quarter financial performance. Promadex achieved total net sales of $29,100,000 up 37% compared to the fourth quarter of twenty twenty three. Our TRU NIAGEN related sales increased by 29% driven by a 30% growth in e commerce and a 26% increase in combined Watsons and other B2B sales. Our total NIAGEN ingredient sales, including food grade and pharmaceutical grade, increased by 96%.

Gross margins improved by 150 basis points to 62.5% compared to 61% in the fourth quarter of twenty twenty three. This improvement is attributable to changes in our product and business mix, driven by higher e commerce sales and additional sales of pharmaceutical grade NIAGEN to support the NIAGEN Plus expansion and driven by efficiencies in supply chain due to scale, improvements in operational fixed costs and other savings initiatives. Selling and marketing expense as a percentage of net sales improved 90 basis points to 29.9% compared to 30.8% in the fourth quarter of twenty twenty three as we continue to make measured investments to grow our sales channels efficiently. Research and development expenses were largely stable year over year as we steadily advanced development of new NAD precursors. As reported, general and administrative expenses decreased by $4,400,000 driven by a $3,500,000 reversal of royalties and fees related to our agreement with Dartmouth.

In December 2024, we announced a supplemental agreement with Dartmouth that waived these obligations and a $1,300,000 recovery of credit losses following the initial payment from the legal settlement with Elysium recovering bad debt written off in 2019. The second and final payment is expected in the first quarter of this year. In the fourth quarter of twenty twenty four, we delivered operating income of $7,100,000 versus a $200,000 operating loss in the fourth quarter of twenty twenty three. Total (EPA:TTEF) net income in the fourth quarter was $7,200,000 or $0.09 earnings per share, a substantial increase from $100,000 or approximately breakeven earnings per share in the prior year period. Moving to the balance sheet and cash flow.

Our balance sheet is stronger than ever. As a result of this year’s growth, our balance sheet reflects a higher cash balance of $44,700,000 with no debt, lower liabilities and higher equity, reinforcing the financial stability and resilience of our business. For the full year 2024, our net cash provided by operations was $12,100,000 up from $7,100,000 in the prior year. The increase was primarily driven by a $13,500,000 improvement in net income, partially offset by $3,500,000 reversal of accrued royalties and $2,200,000 in lower provisions for credit losses, reflecting the recovery of losses from the legal settlement rather than provisions as in the prior year. Additionally, various changes in working capital contributed to the overall improvement in net cash provided by operations.

Finally, I would like to share our 2025 full year outlook. Detailed information on key financial metrics can be found in our earnings press release along with the slide presentation. As it relates to our full year 2025 net sales, we expect to maintain the momentum we built last year, projecting approximately 18% growth year over year. This outlook reflects continued expansion in our e commerce business, growth in established partnerships and further progress in our pharmaceutical grade ingredient business. We anticipate a modest improvement in gross margins as we continue to execute on supply chain optimizations and ongoing cost saving initiatives.

Selling and marketing expenses are expected to increase year over year in absolute dollars, but will remain stable as a percentage of net sales, which was 29.6% in 2024. As Rob mentioned, we will be announcing our company name change in the coming weeks with targeted marketing investments to support the rebrand. At the same time, we will continue investing in resources to drive sales growth while maintaining operational efficiency. R and D expenses are also expected to increase year over year in absolute dollars, while remaining stable as a percentage of net sales at 6% as we continue to invest in NAD precursor development to support our innovation pipeline. General and administrative expenses are increase by approximately $5,000,000 to $6,000,000 primarily due to investments in business growth and the absence of the reversal of royalties and fees related to Dartmouth that I mentioned earlier.

In summary, 2024 was a defining year for ChromaDex, driving profitable growth through operational excellence and fiscal discipline. The company’s financial position is stronger than it has ever been, and I’m confident that we can continue to carry the momentum into 2025 and beyond. As Rob mentioned earlier, we will soon be changing the name of Promadex to better align with the company’s mission and strategic direction. And I look forward to joining him and the rest of the leaders here to share the exciting announcement in the coming weeks. Operator, we are now ready to take questions.

Frilla, Conference Operator, ChromaDex: Thank you. We will now begin the question and answer session. And your first question comes from the line of Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.

Conference Operator: Hello, Rob and Ozan, thanks for taking our questions. Hey, Jeff. Hey, Jeff. Hey, Rob. So firstly, can you talk about the STICK PACS a little bit as far as, give us a sense of pull through on Amazon or your website and a sense of what’s the milligram size and any comments as far as pricing?

Unidentified Speaker, ChromaDex: It’s three hundred milligrams per stick pack. It also has inulin in it, so it actually has other fiber benefits. We haven’t really emphasized the stick pack. It’s interesting, it’s very rare that people ask us about stick packs, but sales of stick packs have over the last couple of quarters, begun to increase. So we expect in 2025 to initiate more of a campaign behind it.

We’ve noticed that the consumers for stick packs tend to be younger and they also tend to be more in the exercise workout cohort

Conference Operator: group. Okay. Got it. That’s helpful. Jose, a quick one for you.

The 1.3 adjustment on the royalties for the fourth quarter, you expect you said the second and final in the first quarter, that will also be 1.3 as well?

Ozan Pamir, Chief Financial Officer, ChromaDex: So just to clarify, that’s not a royalty adjustment. That’s the Elysium settlement. The royalty adjustment relates to Dartmouth. We reversed $3,500,000 in Q4 with regards to Dartmouth. That’s not going to reoccur.

However, the $1,300,000 received from Elysium, the second payment of that is we are expecting by the March. That’s going to be again $1,300,000

Conference Operator: Okay, perfect. That’s helpful. Rob, on the no park study, we would should we expect a readout or some commentary from the company in

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: the third quarter or the fourth quarter?

Unidentified Speaker, ChromaDex: We really don’t know. It’s a double blinded study. We expect them to share it with us, but we don’t know for sure that they will once they have the data compiled. So if I gave you a rough estimate, it would probably be end of the third quarter, fourth quarter, beginning of fourth quarter. But that doesn’t necessarily mean we’d go public with it.

You know, there are factors like they may be submitting for publication and they may feel that it would impact their chances of getting published. So I don’t want to really create expectations around when you will hear. The only thing we feel comfortable saying right now is the last participant will be completed in June of this year.

Conference Operator: Got it. And then lastly for us, could you talk about the Food Grade Nitrogen segment sticking out because it’s been extremely strong in the back half of 2024. So anything to call out there? Any sense of how that looks for 2025 as a segment?

Unidentified Speaker, ChromaDex: Yes, we expect it to continue to grow. We’ve added a couple of other partners. As you know, we’re extremely selective about to whom we supply NIAGEN as an ingredient. There are a handful of very good companies to whom we supply, including Nestle (NSE:NEST), H and H, Life Extension, Qualia. We’ll add one or two more and those companies themselves are growing.

We’re seeing an increased awareness level of certainly of NAD, but of NIAGEN in particular. So we expect the ingredient business, the food grade ingredient business to grow nicely in 2025.

Conference Operator: Perfect. That does it for us. Thanks for taking the questions.

Unidentified Speaker, ChromaDex: Thanks, Jeff.

Frilla, Conference Operator, ChromaDex: Your next question comes from the line of Mitchell Tignaro with Sturdivant. Please go ahead.

Unidentified Speaker, ChromaDex: Yes. Hey, good afternoon.

Rob Fried, Chief Executive Officer, ChromaDex: Hi, Mitch.

Mitchell Tignaro, Analyst, Sturdivant: Hey, could you just expand a little bit on the drivers of your strong e commerce performance in the fourth quarter?

Unidentified Speaker, ChromaDex: Well, as you know, we’ve always done extremely well on Amazon, but we’ve also now seen a nice improvement in our Shopify (NYSE:SHOP) performance. And for several orders, we’ve been talking about it as an underperformer. But you can’t really flip a switch and improve your website e commerce performance. It’s a function of many variables that take time to add up, SEO, search engine optimization, ads, localizing the ads. So it’s a combination of us improving our performance on Shopify.

General increased awareness of NAD in general, which is in large part because of the launch of our NIAGEN IV business, and then a tremendous amount of publicity that ChromaDex and TRU NIAGEN have received over the last several months.

Mitchell Tignaro, Analyst, Sturdivant: Okay. And then, I always ask this, but was the growth driven by strong new customers, recurring? How would you characterize that?

Unidentified Speaker, ChromaDex: There is a slight increase in recurring customers, but it’s mostly new to brand.

Mitchell Tignaro, Analyst, Sturdivant: Okay. And then obviously, the NIAGEN IV, the injectables, I’d love to learn a little more about maybe what you learned on your initial ramp, maybe where the pace of clinic additions throughout 2025, perhaps where you would expect to end roughly in the number of clinics? And then and finally, how confident are you in your supply chain ability to keep up with demand? I know it had a little bit of a slower start. I’m just curious where are we up to speed or are there always going to be risks related to supply chain supply?

Unidentified Speaker, ChromaDex: I think there will always be risks. But you have to recognize that the pharma grade supply chain is completely different than the food grade supply chain. It’s a group of companies. Process is somewhat different. Everything has to be FDA approved and tested and sterilized and retested.

So, it’s a new area for us and we’ve now been working on it for actually several years. And we had a couple of hiccups. The hiccups that we had had nothing to do with the quality. We always reach the absolute tip top highest level of purity and quality whenever we do the test. It has to do with things like having the appropriate license to warehouse the product before you ship it to a pharmacy or ship it to a clinic.

These are technical things. Or filling out the right paperwork when you’re transferring it from one place to another. And these are the kinds of things that have been a learning experience for us and have been frustrating for us because the demand is there. But we think we’ve resolved it. And so we expect in the second quarter, certainly by the third quarter, that we’ll really get back going in terms of sales.

I don’t think that we will have a problem with supply. Right now our manufacturing partners, in this case it’s Doctor. Reddy’s. And we have a nice rhythm going. And of course, we still have the relationship with W.

R. Grace, who is also capable of doing pharma grade if needed. We think we smoothed out the difficulties and look at we’ve been at it for a couple of years here. And we’ve ordered an ample amount for certainly for the next year or probably two years. So we think we’re in pretty good shape in terms of supply.

But yes, anything could happen. There could be problems. We try to anticipate as much as we can. We beefed up our staff and internal staff in that area, putting much more focus on it. We expect that to be an important growth area for the company in the coming years.

Mitchell Tignaro, Analyst, Sturdivant: And what have you learned with the just as from the clinics, the customers at the IV clinics and what if any learnings there? I mean, is it an easy switch for people that were doing the NAD plus IV? Are people aware of your new product, are they selling it in the clinics where you’re presently have product. And like I’m just curious what the learnings might be or do you need to step up marketing? If you could talk about that, I’d appreciate it.

Unidentified Speaker, ChromaDex: Yes. It’s like a whole smorgasbord of questions loaded into one. I think you’re supposed to ask one question, Mitch.

Sean McGowan, Analyst, Roth Capital: Okay.

Unidentified Speaker, ChromaDex: No, we have learned quite a bit. Yes, it is an easy transfer from NAD IV consumers to NIAGEN. In fact, I can tell you with confidence that anybody who has experienced NAD IV that then tries NIAGEN IV is hooked. They’re used to taking hours to get the NAD IV ingested and they’re used to experiencing these terrible side effects, nausea, sweats. They take NIAGEN IV, it takes a few minutes with none of those side effects and much higher NAD levels.

So over the next day or two, they experience the much greater level of benefits than they might with just pure There are we had announced back in November, I think, 300 clinics. I think this morning we announced that we’re up to around 500. Our expectation is we’ll be at least double that by the end of the year. There are plenty of clinics that are interested in this. One of the issues is what they call the BUD, the expiration date.

And that just takes time to make sure that when the pharmacy ships it to the clinic that the clinic has enough time to sell it. And that’s just time. So I think sometime in the second quarter that there will be ample time for the clinics to sell out. And so right now, they’re somewhat reluctant to order. They generally will order once a consumer comes in, a patient comes in and requests it.

But they don’t want to inventory it because the expiration date is fairly short. But that will correct itself in the next month or two. And many of them are already quite aggressively marketing it to their consumers. We work with these clinics. Our marketing department coordinates with some of these clinics like Restore is one clinic, one franchisee that has franchisor that has numerous clinics.

We work with them to create some consumer marketing campaigns and we expect to do more of that coming into the future. You may also have heard many people who have experienced NAD IV just on their own talking about it on podcasts or on social media. There’s Whitney Cummings and Kathy Hilton. We’ve heard them speak about it. There is a fertility clinic, a well known podcaster has got one called The Egg Whisperer who has written quite a bit about it saying that her patients have benefited by taking TRU NIAGEN.

So it’s sort of picking up a little bit of organic awareness on its own even without us doing much marketing. But yes, we plan to market the NIAGEN IV and the NIAGEN shots. In the coming months, we will be able to release an at home version where people can inject a NIAGEN shot, a smaller dose of a NIAGEN shot to themselves sub Q at home. And we are very hopeful that that will hit a nice market. We know that the GLP-one agonists are doing quite well.

We think that most of these people that want to stay thin also want to stay young. So we think that there’s space for NIOGEN IV as well.

Mitchell Tignaro, Analyst, Sturdivant: Thanks for the answers. Much appreciated.

Unidentified Speaker, ChromaDex: Thank you, Mitch.

Frilla, Conference Operator, ChromaDex: Your next question comes from the line of Susan Anderson with Canaccord Genuity. Please go ahead.

Alec Leg, Analyst, Canaccord Genuity: Hi, good afternoon. Alec Leg on for Susan. A question on every day there’s a new headline on tariffs. Any thoughts on how it might potentially impact sourcing or even parts of your international business like the Watsons and Hong Kong? And if so, do you have any plans or what actions could you take to mitigate that?

Unidentified Speaker, ChromaDex: It’s possible that tariffs and I’ll let Fozon if you want to answer this as well. It’s possible that tariffs will have a small impact on the Watson business and on the food grade the pharma grade nitrogen business. But we think we’re talking about very small amount, won’t have a meaningful impact on our business overall. The bulk of our material, the food grade nitrogen material is made all here in The United States and the vast majority of our sales are also here in The United States. And just to add to that, with

Ozan Pamir, Chief Financial Officer, ChromaDex: regards to Canadian tariffs that were just passed today, if you look at the list of products that are posted that are having tariffs on from the Canada side, supplements are not part of that list. So we don’t expect any impact on our sales to Canada as well.

Unidentified Speaker, ChromaDex: Got it. And then just

Alec Leg, Analyst, Canaccord Genuity: to follow-up on innovation, you mentioned the future subcutaneous injection. I guess any other innovations that you’re able to talk about planned for the year? Thanks.

Unidentified Speaker, ChromaDex: We do plan to either introduce one or two new formulations of supplements that are complementary to TRU NIAGEN or reformulate a couple of the formulations that we have, such as the TRU NIAGEN Immune product. And we do have a product that we refer to as TRU NIAGEN beauty that we sell in Asia. So we are and then there was one question about stick packs. So these are three other product innovations that we’re working on expect to have some update developments later in the year.

Alec Leg, Analyst, Canaccord Genuity: That’s very helpful. Best of luck for us, Sabir.

Unidentified Speaker, ChromaDex: Thank you.

Frilla, Conference Operator, ChromaDex: Your next Your next question comes from the line of Phil Dezellem with Tieton Capital Management.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Congratulations on a terrific quarter. A group of questions, let’s start with the food grade ingredient, if we could, being up over 60%, along with your e commerce sales being very strong. Is this just another data point indicating that you’re hitting that tipping point with awareness? Or were there some initial orders or non orders that don’t happen every quarter maybe that just popped into the fourth quarter that led to a larger that larger 60% plus sort of growth on that line item?

Unidentified Speaker, ChromaDex: Well, certainly, it’s more difficult to predict the ingredient business because it’s a B2B business. The order comes in, you fill the order. But this has been steadily going on now for several quarters. Our partners to whom we’re supplying NIAGEN are doing quite well and they extend their forecast for the year pretty aggressive too. So, we expect this NIAGEN ingredient business to continue to grow.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Thank you. Then, I want

Frilla, Conference Operator, ChromaDex0: to talk a bit

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: about the IV business for a moment. Has the shortage of the IV product accelerated interest at all? And where I’m going with this question is sometimes scarcity is the single best selling point. And have you seen any of that take place?

Unidentified Speaker, ChromaDex: Initially, we saw a little bit of that, of people ordering it and clamoring for it and emailing about it and saying they want it and they want it. But the thing is, this problem we’ve experienced has been going on for

Rob Fried, Chief Executive Officer, ChromaDex: a few months. So,

Unidentified Speaker, ChromaDex: yes at first, but no after a while. We need to just what we did. We solved the supply chain problem and get back to marketing and selling a great product.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Great. And as for the supply chain problem, Rob, I apologize. My schedule did not allow me to come to this properly prepared. But what was the impact, in the fourth quarter and what you would anticipate in the first quarter from the supply chain issues with the IV?

Unidentified Speaker, ChromaDex: Well, the pharma ingredient business is part of the overall ingredient business, but we do break it out. And you can see that in the third quarter and the fourth quarter, it was in the area of about $1,000,000 a quarter, maybe even a little less. Then my expectation is we’ll probably be in that neighborhood in the first quarter too. But then I think starting in the second quarter, maybe as late as the third quarter, you’re going to start seeing a more dramatic rise in sales of NIAGEN pharma NIAGEN ingredient to the IV space. So I think that if we’re right and that growth happens, let’s say, in the third quarter, it’s growth that would have been experienced in the first quarter.

It was just about a several month delay.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: And I did hear you say that that is now completely behind you at this point?

Unidentified Speaker, ChromaDex: With exception of this thing called BUD, the expiration date, which just takes time. It has nothing to do with the supply chain manufacturing process. But we haven’t experienced any supply chain issues in several weeks and we have plenty of material now. So I think it’s all behind us.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Great. Thank you and congratulations again on a great quarter.

Ozan Pamir, Chief Financial Officer, ChromaDex: Thank you, Bill.

Frilla, Conference Operator, ChromaDex: Your next question comes from the line of Ram Selvaraju with H. C. Wainwright. Please go ahead.

Frilla, Conference Operator, ChromaDex0: Thank you so much for taking my questions and congrats on all the progress. Really impressive operational performance. Thank you, Rob. I was wondering if you could comment on potential tailwinds in 2025 from two areas in particular. One is NIAID and IV uptake and the other is potential accession of NR adoption to what was previously the segment of the market that was being served by nicotinamide mononucleotide or NMN?

Unidentified Speaker, ChromaDex: We still do see some NMN in the market, but much, much less than we did. And as you know, the FDA has been very consistent about upholding its ruling that there’s a drug preclusion application in NMN and not a legal dietary supplement and is reserved only for drug use. There is a group that was selling NMN that has funded a lawsuit against the FDA and the FDA has said that they will issue a final ruling on this in July. But you could see both ChromaDex and the drug company that was the reason for the drug preclusion called Metro Biotech have published statements to the FDA against the claims made by this group. We are confident that the FDA will show the integrity and continue to keep NMN out of the market.

We’re not seeing NMN as a major force in the marketplace presently. There are though, as I alluded before, dozens of companies jumping on the NAD bandwagon these days. Some are just blatantly infringing on patents, blatantly missing label claims and just selling the ingredient. There are companies out of Asia that claim to be selling some NAD precursor of some sort at cheap prices. So we are and we’re seeing some really egregious, fraudulent acts in the marketplace of people trying to get a piece of what is really an exciting and growing market.

That’s an issue for us. And we’re working very hard to identify these bad actors and notifying companies inside the industry, regulatory authorities and the retailers like Amazon, to limit that. And some of them are taking action. We’d love to see TikTok shop pay attention to this. There are many of these infringers and fraudulent players selling on TikTok Shop.

TikTok Shop doesn’t seem to care. I would think that they would, given the state of their company right now and the scrutiny they’re getting from the government. And anybody who’s listening to this call who feels like writing a letter or an email to TikTok app informing them that they are not policing and they are creating real risk to consumers in America for allowing these fraudulent companies to sell their products on TikTok shop. That would be one way that you guys could help your company. But NMN isn’t a big deal with these others.

There’s another thing we’re seeing is a lot of companies selling NAD. Yes, NAD itself, the molecule NAD is not bioavailable. So there are exactly zero studies that show that swallowing NAD increases NAD levels. It doesn’t. It’s just simply too large a molecule and has a similar problem to NMN in that it’s a nucleotide, meaning there’s a phosphate group on the perimeter blocking entry into the cell.

So people who are hearing about NAD, going out and buying a supplement that says NAD, it’s not even just that you’re taking a product that doesn’t do anything. You probably are doing some harm. Why do I say that? Well, these people who get NADIV and it takes three hours and they have these cramps and stomachaches and sweats and fevers, there’s a reason why. Because NAD endeavoring to get into the cell creates friction.

It creates this friction that leads to inflammation. Taking NAD, the one study we did where we compared NAD IV to nitrogen IV showed all the biomarkers of inflammation in NAD. So it not only doesn’t do much, it also creates inflammation. But that doesn’t stop dozens of companies from jumping on the NAD bandwagon and selling NAD. The fact of the matter is there’s really only one good, safe, trustworthy company in the NAD space that does the studies, that meets label claims, that has a top shelf quality department, that gets regulatory approvals, that gets intellectual property and that you can trust, and it’s a company.

And to the extent that you guys can help us spread that word, I think you’d be very helpful to the general consumer base that’s now growing of growing interest in the NAD space.

Frilla, Conference Operator, ChromaDex0: Thank you very much for that. Just two related things, if I may. Firstly, I was wondering if you could comment on the potential market opportunity, the size of the total addressable market and what you expect to be possible upside scenarios if the Parkinson’s disease study that’s currently ongoing were to report positive data and what implications that might have for ChromaDex? And also if you could maybe talk about future potential avenues to positioning NR as an Rx product, if that might include a possible spin out, a pharmaceutical initiative of some kind or indeed broader corporate rebranding? Thank you.

Unidentified Speaker, ChromaDex: Yes. Well, as you know, we are planning to do a corporate rebrand and we expect in the next few weeks to announce the new name. Stay tuned for that. And thank you for asking about Rx. The Parkinson’s study, as we said, will be completed in the protocol in June.

We won’t know the data for quite a while, but there are ten million people globally diagnosed with Parkinson’s disease. And I ask you this question, Ram, if you were somebody diagnosed with Parkinson’s disease or a family or related to somebody with Parkinson’s disease and you read that there was a Phase three clinical study completed from a very reputable Parkinson’s researcher. And you read it in a very reputable journal, Parkinson’s Journal, or you read it in maybe one of the foundation websites or you read it in the news media of a dietary supplement that had statistically significant therapeutic value for Parkinson’s that was completely safe and was on the market, what percentage of those ten million do you think would go out or whose doctors would recommend them to go out and seek that dietary supplement? Seek the one that actually did the study, seek the one that has the intellectual property, seek the one that is safe and that approved by all of the regulatory bodies. If it was just five percent, you’re talking about very, very dramatic significant numbers.

You could do the math. I’m sure you have. It’s a very significant math. Now that obviously there’s an assumption there that the study is going to come back positive, but we have no knowledge of it. It’s a double blinded study.

We don’t know the results at all nor do the researchers. But the earlier studies, the Phase one studies that were published and even the preclinical studies and the mechanisms of action suggest that there’s a pretty good chance. So we think that that’s one area with great upside potential for TRU NIAGEN. But as you said, in terms of RX, in terms of drug approval, as you know, Rom, Bromidex has a large portfolio of precursors for NAD, not just nicotinamide riboside or nicotinamide riboside chloride. We have other precursors, some of which are bioequivalent or even bio superior, that we think might be better candidates for drug approval.

So ChromaDex could conceivably use one of those other molecules that we have many, many years of patents on for actual drug approval separate from sales of dietary supplement for Parkinson’s disease or the other diseases. Remember, ataxiaotil onjectasia, which is another one that we’ve already published a Phase II clinical on that orphan disease. These are two diseases which are high profile for us. Now so then you ask the question, will there be a spin off? So we have said in the past that we don’t intend to dilute our investors further by raising money to pursue drug approval.

So if it turns out that the capital that we have is insufficient to get there because we didn’t get a licensing deal from a pharma company or the cost of the study is too much. If we were in that place, yes, we would do a spin out and perhaps just simply raise money for the spin out if needed. I don’t expect that to happen, but it is a possibility. The other reason for considering a spin out would be that certain pharma companies are not as interested in the supplement business as they are in the pharmaceutical business and are very interested in both ataxi and Parkinson’s and our molecule or our molecules for that pursuit. And they might be interested in doing business with us just for those businesses and those molecules.

So that’s another reason potentially to do a spin out. But I appreciate you bringing it up because between Parkinson’s and ataxia and the RX strategy and the NIAGEN injection strategy and the NIAGEN IV strategy as well as just increased awareness and brand awareness for NIAGEN and TRU NIAGEN, we think we have several possible shots on goal for this company ChromaDex to really realize its potential, all the while while we are focused on operating a good healthy business that’s cash flow positive and growth.

Frilla, Conference Operator, ChromaDex: Thank you. And your next question comes from the line of Sean McGowan with Roth Capital. Please go ahead.

Sean McGowan, Analyst, Roth Capital: Thank you. Hi guys. Couple of questions. One, Omar, could you just clarify I think I know the answer, but could you clarify on the G and A expectation for the year? Do you mean $5,000,000 to $6,000,000 higher than the reported GAAP number for full year 2024?

Ozan Pamir, Chief Financial Officer, ChromaDex: Yes, I do. And let me clarify that. So we reported $18,400,000 in G and A expenses. That includes the reversal of that $3,500,000 of Dartmouth royalties and the receipt of $1,300,000 from Elysium. So if you adjust for those, for normal operations, from that it would be about $1,000,000 to $2,000,000 increase.

Sean McGowan, Analyst, Roth Capital: Right.

Ozan Pamir, Chief Financial Officer, ChromaDex: Okay. But based on reported numbers, it’s $5,000,000 to $6,000,000

Sean McGowan, Analyst, Roth Capital: Right. So it turns out to be a lower full year number for $25,000,000 than I had expected, so I’m pleased. On that Elysian, not the Elysian, on the Dartmouth royalty thing, is there going to be any effort to get back any prior paid and booked royalties on that? Or is that one order to bridge at this point?

Ozan Pamir, Chief Financial Officer, ChromaDex: The Dartmouth royalties, all of the previously accrued ones have been reversed and we’re no longer accruing any royalties. So there’s really nothing left there.

Sean McGowan, Analyst, Roth Capital: Right. But those were accrued but unpaid, right? As my understanding, if you go back, I’m talking about back to the point where you were not only recruiting them, but you were paying them. You’re not going to go back and try to get previously paid.

Unidentified Speaker, ChromaDex: No, we’re not going to go after them for that.

Ozan Pamir, Chief Financial Officer, ChromaDex: No, that’s not our goal. Right. Got it. I just

Sean McGowan, Analyst, Roth Capital: want to be clear on that. Yes. In terms of relative margin contribution, I believe we’ve talked about this before that, NIAGEN IV is higher margin than the overall average. That’s right?

Unidentified Speaker, ChromaDex: Yes.

Sean McGowan, Analyst, Roth Capital: And is when the NIAGEN injectable at home injectable, would that be comparable to NIAGEN IV?

Unidentified Speaker, ChromaDex: It will probably be lower.

Sean McGowan, Analyst, Roth Capital: Probably lower? Okay. That’s helpful. And did you offer any specifics on the timing of when that home injection kit would be available?

Unidentified Speaker, ChromaDex: We didn’t, but we’re circling third quarter.

Frilla, Conference Operator, ChromaDex1: Okay.

Conference Operator: All right.

Sean McGowan, Analyst, Roth Capital: Helpful. And last question, can you comment on the frequency of people doing NIAGEN IV? Like what portion of them are coming back? Are they coming back once a month? Or any kind of update on that would be helpful.

Unidentified Speaker, ChromaDex: So we were able to make a small amount of pharma grade material for NIAGEN and we went out into the marketplace in September and we sold really well for the first two, two point five months, but then we ran out of material. So we really don’t know about repeat users because we didn’t have material to supply to the clinics. So we really can’t answer that question right now.

Sean McGowan, Analyst, Roth Capital: Okay. All right. Fair enough. All right. That’s it for me.

Talk to you guys later. Thanks.

Ozan Pamir, Chief Financial Officer, ChromaDex: Thanks. Thank you.

Frilla, Conference Operator, ChromaDex: And your next question comes from the line of JP Margwith, Farmhouse Equity Research. Please go ahead.

Frilla, Conference Operator, ChromaDex1: Robin, I was on. Thanks very much for taking my question and congratulations on a great quarter.

Unidentified Speaker, ChromaDex: Thank you.

Frilla, Conference Operator, ChromaDex1: So quickly, I’m wondering about the possibility of a partnership with a clinical lab for NAD plus testing. And my thought was that maybe there’s no financial necessarily financial benefit or upside, but if you had more data from lots and lots of patients who were taking NAD plus or doing infusions, would that be helpful? Have you looked into partnerships with clinical labs for doing blood testing and checking and that sort of thing? Is that something on your agenda or not?

Unidentified Speaker, ChromaDex: Are you talking about NAD or you’re talking about NIAGEN?

Frilla, Conference Operator, ChromaDex1: Well, I guess NAD plus products, so NAD plus levels, blood levels?

Unidentified Speaker, ChromaDex: It’s very important for people to understand that NAD itself is not bioavailable. So these people that are I’m sorry. Go ahead. No, go ahead.

Frilla, Conference Operator, ChromaDex1: No, no, please.

Unidentified Speaker, ChromaDex: Yeah. So people who are getting NADIV or even taking NAD, There is a increase, a small increase in their NAD levels. But the reason for that is because the NAD molecule is breaking down in the bloodstream into smaller molecules. And one of the smaller molecules it breaks down into is NR. And then the NR will be take a small amount of NR will then get taken up into the cell.

But they have to go through quite a process to get it there, which creates a lot of agony and inflammation and other issues. The other issue about you see a lot of companies emerging talking about NAD levels in the blood. And we do in fact have a kit that we sell to some people who are constantly asking what my NAD levels. The problem with measuring your NAD levels in the blood is it really isn’t a great indicator of much. You really want to measure your NAD levels in the cells, in the tissue cells.

But even then, you really want to measure them in the damaged tissue cells, which is very difficult to do in humans. It’s kind of easy to do in rats and mice. But unless you’re going to do a biopsy, it’s quite difficult to do in a human. You can do it in the brain with an MRI. You can measure NAD levels in the brain with MRIs and we’ve done that.

It’s one of the reasons we’re so aggressive with these neurodegenerative diseases like ataxia and Parkinson’s and Alzheimer’s because they’re all neurodegenerative diseases and we can measure NAD levels as well as the therapeutic benefits of taking TRU NIAGEN. So we could conceivably partner with some of these clinics that are out there in the NAD business or selling NAD or doing NADIV, but we’re not very confident in the quality of the data that it would deliver. So it might be more of a marketing exercise than a science exercise. Andrew, is there anything you want to add to that? I think you covered it, Rob.

Okay, great. Thanks.

Frilla, Conference Operator, ChromaDex1: So just to see if I can summarize, so if you actually had an MRI, that could actually give you some useful information then, and that’s obviously going to be super expensive, but is there a point in doing that for people who are really, really interested in knowing?

Unidentified Speaker, ChromaDex: Andrew, you want to take that?

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Well, I think one of the challenges there is the availability of that technology. So it’s non invasive, but today it’s quite expensive to do that. So it would be the availability and the affordability, but certainly would be preferred from an invasiveness standpoint because it doesn’t require a biopsy.

Frilla, Conference Operator, ChromaDex1: Right. So someone has a real keen interest and money is not an object here, right? That’s an avenue that they could theoretically pursue, is that right?

Unidentified Speaker, ChromaDex: Yes.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: The group in Norway that Rob referred to earlier that’s doing the Parkinson’s disease research has routinely implemented this technology in measuring brain NAD levels. I don’t know that it’s a good large portion of the NoPark study, but they have done it in smaller studies and they continue to implement it in smaller studies.

Frilla, Conference Operator, ChromaDex1: Right. So I wasn’t thinking about like research or clinical settings. I’m talking about individuals who, and as Rob alluded to, there are people who are really keen to know their levels, right? So in theory, if you have the money and you want to do this, you can do it. And there might be some benefit, obviously, to getting the data from ChromaDex’s point of view that you can actually prove things or show things or market things or whatever.

Is that right? Or am I just missing the boat?

Unidentified Speaker, ChromaDex: No, I guess that’s theoretically an idea. It’s expensive, but there are people out there that are so committed to anti aging research and their body that they might actually do that. So let’s we’ll think about that. Okay. Great.

Thank you

Frilla, Conference Operator, ChromaDex1: so much. I appreciate you taking my long winded call here.

Unidentified Speaker, ChromaDex: Thanks for the questions.

Frilla, Conference Operator, ChromaDex: And that concludes our question and answer session. I will now turn the conference back over to Ben Shamshan for closing remarks.

Dr. Andrew Shapp, Senior Vice President of Scientific and Regulatory Affairs, ChromaDex: Thank you, operator. There will be a replay of this call beginning at 07:30PM Eastern Time today. The replay number is 30 and the replay ID is 8584242. Thank you everyone for joining us today and for your continued support of ChromaDex.

Frilla, Conference Operator, ChromaDex: And this concludes today’s conference call. You may now disconnect.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.