Schiff Nutrition International recently purchased Ganeden Biotech's probiotic supplement assets for $40 million, acquiring worldwide exclusive rights to GanedenBC30 in supplements and its over-the-counter brands, Sustenex and Digestive Advantage. The sale reflects Ganeden's current focus on delivering probiotics in the food/beverage market, animal nutrition and medical foods.

Ganeden's probiotic supplement business generated net revenue of approximately $17 million for the year ended Dec. 31, 2010, and is expected to increase Schiff's revenues and generate accretive earnings. Ganeden CEO Andy Lefkowitz said that Ganeden's supplements business, started in 2003, was built to sell. "There are more opportunities to push the ball up court with our science in food than there are in supplements," he said.

According to Nutrition Business Journal, Americans spent $527 million on probiotic supplements in 2009, up 24 percent over 2008 levels.  Of all the specialty supplements tracked by NBJ, probiotics enjoyed the fastest growth rate in 2009, with no signs of a let-up in the years to come. NBJ's initial estimates for 2010 show that U.S. consumer sales of probiotic supplements grew 16 percent to $610 million.

Despite the growth in probiotic supplements, Ganeden said the crystal ball reveals that foods are probiotics' delivery system darling. "If you look at the size of the food market worldwide versus the supplement market worldwide in probiotics, there's a big difference," said Mike Bush, vice president of business development for Ganeden, based in Cleveland. "You have a brand like [Dannon's] Activia that's outselling most of the probiotic supplement products combined."

The deal took six months to close and transition of the existing supplement products will last about 60 days. "We'll continue to be partners," said Lefkowitz. "We're working with them on a number of initiatives," such as adding GanedenBC30 to Schiff's existing products. And Ganeden will retain the intellectual property, but "as our clinical studies show new uses for the probiotics, they [Schiff] will have access to them as they relate to OTC [over-the-counter]," he said.