The recently upgraded production line in Japan has finally realized the long-held plan of reducing the production cost of AndoSan to acceptable levels. However, having realized that the process towards developing sales of AndoSan in the professional medical market is an ongoing long-term project, the board wants to create revenues on the consumer health version of Andosan. This will produce profit and enable dividend.
The revised strategy calls for an initial focus on the consumer health market. Throughout the years, ImmunoPharma has repeatedly turned down proposals from interested parties to launch such a product. Main reasons have been unrealistic production costs combined with the need to protect the status and viability of AndoSan in the professional health market. With the new production line, all this has changed dramatically. We now see great potential in developing a derivative product, clearly differentiated from AndoSan that could be sold at a price point viable in the consumer health market.
Throughout 2016 and 2017, ImmunoPharma spent considerable time and resources trying to develop our own sales and distribution system to end consumers or, alternatively, identify suitable distributors for an AndoSan based mass market product.
Establishing our own sales system would have the clear advantage of giving ImmunPharma control and profit throughout the full value chain. However, this solution proved to entail an unacceptable combination of risk and financial investment. The option of selling through a distributor proved feasible but far less lucrative as ImmunoPharma would, in reality, be reduced to a raw material supplier with relatively low-income potential.
It is therefore with great pleasure that we now can announce a solution combining the best of both worlds.
Nordic Healthy Living (NHL) Early 2018, the group behind NHL approached ImmunoPharma with a proposal for cooperation. NHL recognized the value inherent in the AndoSan origin story and extensive documentation and was willing to commit deeply to close cooperation with ImmunoPharma. Early 2019 such a cooperation was agreed. Under this agreement, the NHL will have worldwide exclusive rights to market and sell AndoSan based products aimed at the consumer health market while at the same time ImmunoPharma will retain all rights to AndoSan in the professional health market. The next step was to secure a controlling interest in NHL for ImmunoPharma.
We are now happy to announce that a transaction has gone through, and ImmunoPharma now is the majority owner of NHL with 100 %. NHL has access to a strong sales system covering 25+ European markets. With this cooperation, ImmunoPharma will have both a professional partner to handle sales and marketing as well as securing the highest possible share of the profits through direct ownership. NHL is the majority owner of the Norwegian based direct sales company, Eqology. Eqology is a fast-growing company with 2018-revenues of EUR 19 mill. and EUR 2 mill. in profit. With 40.000+ subscription customers throughout Europe, Eqology is the perfect vehicle to quickly introduce the consumer health version of Andosan. In addition, NHL will develop its own online sales system in 2020 based on previous sales successes in the last 10 years. The working name of the consumer health version of Andosan is Immuno Booster
Dividends With this transaction in place, both NHL and ImmunoPharma plan to start paying a dividend to its shareholders in 2020, after the 2019 accounts are closed and approved spring 2020. Further information on the company structure and dividend policy will be provided in a separate fact sheet currently under preparation.