Synlait Milk says US approval for 'grass-fed' infant formula delayed by up to a year
Synlait Milk, the NZX-listed milk processor, said regulatory approval for its 'grass-fed' infant formula in the US is taking longer than expected.
Rakaia-based Synlait is seeking approval from the US Food and Drug Administration for its 'grass-fed' infant formula to be sold in the world's largest economy ahead of a launch of the product with US partner Munchkin Inc. The companies said in a statement today that the FDA process, which had been expected to be completed this year, is now expected to take a further four to 12 months. The stringent process, known as a New Infant Formula Notification (NIFN), includes a range of trials, audits and documentation.
"The FDA's NIFN process is thorough and requires time for comprehensive review," said Synlait managing director John Penno. "We remain confident Munchkin's Grass Fed infant formula will be launched in the near future, however, the timing of the launch will be slightly later than we've initially signalled."
He said the new timing will not have a material impact on Synlait's forecast volumes for the 2018 financial year. The company has previously said that significant manufactured volumes for the US market weren't expected until the 2018 financial year.
Synlait is expanding in the US, the world's second-largest infant formula market, to diversify its earnings away from China, the world's largest market. The company has worked for two years with Munchkin on the new 'grass-fed' formula which aims to meet demand for natural products in a market where much of the milk comes from intensive, factory-style dairy farms. The product is poised to become only the second imported infant formula brand with US FDA registration.
The company said today that the delay in the US launch has no impact on the strength of Munchkin's Grass Fed infant formula, which continues to steadily gain increased distribution in Australia and New Zealand.
Synlait's shares last traded at $4.65 and have gained 25 percent in the past 12 months.