Laws prove sticky for Comvita

Regulatory hurdles are delaying the global release of Comvita's anti-bacterial honey wound dressings.

"We underestimated some of the time delays in getting some of these products to market. It's had a higher threshold in terms of getting the approvals through," chief executive Graeme Boyd said yesterday.

The target now is the second quarter of this year - a year later than originally planned.

Boyd said the launch process had been typical of new-product releases the bee products group regularly undertook - except it had learned things took longer in the medical arena.

"The good news is Comvita has met all of [the] requirements, even the stringent controls of the UK's NHS drug tariff system," he said.

The company launched its first generation wound dressing in the UK last March and had hoped to follow up on this last June.

"But we're only just about to do that now [in the next few months]," Boyd said.

As signalled in November, the delay has hit the bottom line with the year to December annual after-tax profit now seen at $1.1 million. This was down from an original forecast of $1.58 million and would be similar to the 2003 result.

"[The] delay had a direct impact on our bottom line result for the year [as signalled in November] but in effect it is not lost revenue, it is delayed revenue," Boyd said.

Fisher Funds, which is one of the NZAX-listed company's major shareholders, was unperturbed by the downgrade.

Managing director Carmel Fisher said then although the news was disappointing, it would not change her view of the business.

"We don't think it's next year's success story. We think it's a two- to three-year success story. We can live with some earnings variability," she said.

Comvita shares closed unchanged yesterday at $2.10 in light trading.

Boyd said the wait would be worthwhile as the international market was worth $6 billion. He was realistic about Comvita's impact saying a 0.1 per cent market share would be "marvellous".

Comvita's medical honey dressings now has approval to be sold in all European markets.

"We are working to a clear plan for growth and we have the stamina to stay focused even when things don't go as quickly as we would have liked," Boyd said.

Comvita's dressings are infused with an antibacterial property in manuka honey called UMF or unique manuka factor. This is found in some, but not all, manuka honey.

The company has a manufacturing agreement with British-based medical device manufacturer Brightwake.