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18th Annual Natural Products Expo East Coming to Washington Convention Center October 3-6

, Over 20,000 Retailers and Manufacturers to Gather at Natural Products Industry’s Premier Trade Show

The 18th annual Natural Products Expo East will be held at the Washington Convention Center in Washington, D.C. on October 3-6, 2002. Over 20,000 retailers and manufacturers are expected to attend to learn about the latest news and products from the natural products industry, which includes organic foods, dietary supplements, alternative medicine and even natural pet food. In 2001, sales of natural products topped $34 billion – an all-time industry high.

As the natural products industry’s premier trade show, Natural Products Expo East features more than 1,700 exhibit booths showcasing the latest products in categories including organic foods, vegetarian foods and specialty foods; supplements, including vitamins, minerals, herbs and specialty supplements; personal care products; natural living products; international products; pet products; and raw materials. An on-site educational conference for retailers and manufacturers offers more than 45 workshops and seminars.

“Exhibit sales have been incredibly strong this year, with particular growth in the personal care and natural living categories,” says Brian Henderson, senior vice president of trade shows for New Hope Natural Media. “With 69% of consumers now purchasing natural products, the number of mainstream buyers and retailers attending the show is increasing significantly as well. It’s exciting to see the momentum building in this industry, especially given the current economic climate.”

[email protected] and Organic [email protected], designed for buyers and sellers of raw materials, ingredients, store supplies, and services, will kick off Expo East on Thursday morning. Also on Thursday, herb expert Brigitte Mars leads a tour of the U.S. National Arboretum and explains the varied medicinal uses of herbs (reservations required). In recognition of the National Organics Program, “The Spirit of Organic Awards Dinner” will be held on Thursday night at the United States Botanic Garden. Co-hosted by New Hope Natural Media and Organic Farming Research Foundation, this special evening will celebrate the significant achievement of legendary organic farmers dedicated to the development, growth and preservation of integrity in the organic industry (reservations required).

On Friday, Keynote Speaker Jeremy Rifkin, founder and president of The Foundation on Economic Trends, will speak on “Natural Products in the Biotech Century.” He will address the benefits and perils of “the ultimate technology frontier” and how it’s affecting the future of our civilization.

On Saturday, organic produce and education consultant Mark Mulcahy will lead a tour of a local organic farm explaining how the new national Organic Program will affect the future of farming and retailing and how organic certification works (reservations required).

Expo East’s exhibit floor is conveniently organized into nine different areas making it easy for attendees to find the products they want in one place:

  • Natural Living (featuring organic clothing, textiles, fibers, yarns and fabrics, and environmentally safe products);
  • Organics (organic products, from fresh produce and dairy products to breads, cereals, meat and organic cotton products are featured and all exhibitors must provide organic certification);
  • Personal Care (the entire range of natural, cruelty-free personal care products, including cosmetics, body and hair care products, massage oils, aromatherapy, and even dental care products);
  • Pet Products (from supplements and medicinals to toys and food, the products and companies in the growing natural pet product industry);
  • Raw Materials (designed for suppliers of raw materials and bulk ingredients to be used in vitamins, supplements, medicinals, personal care products, herbs/medicinals);
  • Specialty Foods (featuring food companies with natural gourmet or specialty food items);
  • Supplements (featuring vitamins, minerals, herbal products, green foods and sports nutrition products)
  • Vegetarian Foods (featuring A full range of vegetarian foods, including soy products and the growing meatless entrée market), and the
  • International (featuring a variety of natural products from outside the U.S.),/ul>

    The following are a few examples of more than 45 seminars and workshops offered on a wide range of subjects:

    • “What Retailers Want: Marketing Tips, Ideas, Guaranteed Results” - presented by Martin Baird, Founder of Nutritional Marketing
    • ” Coffee, Chocolate . . . and Why They’re Good for You” – a “guilt-free” discussion led by Chris Kilman, Founder of Medicine Hunter, Inc.;
    • “The Connection Between The Immune System And The Mind” presented by health journalist Lorna R. Vanderhaeghe, examining what researchers have learned about how the immune system plays a role in initiating disease.
    • “Strategies to Position Your Store: Sports Nutrition” an analysis of this hot sector and how to capitalize on it, presented by Patrick Rea, Research Director, Nutrition Business Journal and Anthony Almada, mSc,Founder/CSO
    • “A Taste of Expo” attendees will be able to sample a different product daily and cast their vote for the best - from assorted brands of Soymilks on Friday, to Chips on Saturday and Energy Bars on Sunday.

    For a complete listing of seminars and workshops, visit New Hope’s Web site at and select the Natural Products Expo East icon.

    Manufacturers and retailers who are interested in participating in Natural Products Expo East should contact the Expo Registration Department at 866.458.4935 (toll-free) or 303 390-1776 (local) or via e-mail to [email protected]

    The show is open only to members of the trade and to the media. If you would like to attend, you can download an Expo registration form by visiting the web site at Journalists wishing to cover the show should contact Jen Monan at Freeman Public Relations, 212 489-8585 or via e-mail to [email protected]

    New Hope Natural Media is a division of Penton Media, Inc. (NYSE: PME), a leading diversified business media company that produces market-focused magazines, Web sites, trade shows, and conferences. Penton serves the Internet/IT; natural products/food/retail; manufacturing; electronics; design/engineering; management; supply chain/aviation; government/compliance; mechanical systems/construction; and leisure/hospitality markets. For more information, visit

Natural Health Trends Corp. Posts Largest Monthly Revenues in Company's History; CEO Interviewed on CEOCAST States "Company Posted Solid Net Income; Continues to Grow Solidly" as Company Posts Record Revenues in Excess of $4 Million for the Month of August DALLAS, TEXAS - September 12, 2002 - Natural Health Trends Corp. (OTCBB: NHTC) CEO and President, Mark Woodburn, was recently interviewed by Michael Wax of Natural Health Trends Corp., which recently reported approximately a 17% increase in net sales for the six months ended June 30, 2002, up from approximately $13,010,000 to approximately $15,270,000 from the same time last year. The Company had one of its largest revenue- generating months in the history of the company, reporting revenues in excess of $4,000,000 for the month of August.

When asked, in a very competitive market, how he differentiates NHTC from other companies, Mr. Woodburn said that NHTC likes to concentrate on quality-of-life products that show effects in thirty minutes or less. Mr. Woodburn pointed out that the Company's two most successful products are Alura (TM), a quality-of-life product that contains ingredients that may help promote clitoral sensitivity and may help improve the opportunity for women to achieve greater sexual satisfaction, and Skindulgence(TM), a 30-minute non-surgical facelift product designed to help create a more youthful, radiant appearance by diminishing the appearance of fine lines and wrinkles, improving skin tone and color, and developing the feel of firm facial and neck muscles.

When asked what the marketing strategy was for the Company's product line, Mr. Woodburn replied that the Company's distribution model was network marketing (person-to-person selling). The marketing strategy has proven to be effective as the Company has seen an increase in sales over the last two and a half years, noting the Company's net revenues in 2000 were approximately $8 million increasing to approximately $25 million in 2001.

The complete interview may be heard by logging on to the Company's investor relations website at or contacting [email protected]

About Natural Health Trends Corp.
Natural Health Trends Corporation is a holding company for two operating subsidiaries,, Inc., which sells nutritional supplements and vitamins and Lexxus International, Inc. Lexxus, started in January 2001, markets and sells quality-of-life products.

Investors looking for information pertaining to Natural Health Trends Corp., or any of its subsidiaries, are encouraged to look up on the Internet or by contacting Investor Relations Services, Inc. at 386.409.0200 or on the Internet at Shareholders are encouraged to register for updated information on the corporation via e-mail at the website.

10th International AHCC(R) & GCP (TM) Symposium Proves Valuable Sharing of Worldwide Research

U.S. Association Presented Prestigious NutrAward to Host Country

SAPPORO, Japan — Over 350 medical doctors from around the world shared their latest discoveries and research studies at the 10th International Symposium of the AHCC(R) (Active Hexose Correlated Compound) and GCP(TM) (Genistein Combined Polysaccharide) Research Associations meeting.

The Symposium was co-sponsored by The Foundation for Basic Research of Oncology (the association authorized by the Japanese Ministry of Health and Welfare as an official foundation to execute and support basic research projects on cancer) and Amino Up Chemical Co., Ltd., headquartered in Sapporo, Japan.

Attending nations included China, Finland, Japan, Korea, New Zealand, Thailand, United Kingdom and the United States. The AHCC Research Association,, and the GCP Research Association,, were established in the U.S. to promote clinical research of nutritional supplements, as well as physician and patient education.

Discussions of new AHCC and GCP clinical research studies and developments were the focus of the Symposium. The agenda consisted of four basic studies and ten clinical studies on AHCC, two basic studies and three clinical studies on GCP and one basic study and one clinical study on the combined usage of AHCC and GCP. The keynote lecturer, Dr. Noriaki Tanaka (Okayama Univ., Japan) spoke on The Current Tumor Therapy.

"This year, one of the most significant AHCC studies presented was titled ‘Improved Prognosis of Postoperative Hepatocellular Carcinoma Patients When Treated with Functional Foods: A Prospective Cohort Study’ conducted by Dr. Yasuo Kamiyama, Professor of Kansai Medical University in Osaka, Japan," stated Fred Pescatore, M.D., M.P.H., of the Centers For Integrative and Complementary Medicine, and medical director for the U.S. AHCC Research Association. "This study measured the effects of AHCC on post-operative liver cancer patients over a nine-year period based on ten different parameters and really reinforces the efficacy of AHCC. A synopsis of the study was also published in the Journal of Hepatology -- The Official Journal of the European Association for the Study of Liver.”

Dr. Fred Pescatore, M.D., concluded the two-day Symposium with a presentation on new case studies and follow-up reports on AHCC. Other presenters from the U.S. included: Dan Kenner, N.D., who presented various studies of AHCC completed in the U.S.; Thomas Walshe, M.D., Harvard Medical School and Faulkner Hospital, Boston, Massachusetts, who presented a pilot study on the effects of AHCC with Hepatitis C patients; and Dennis O’Hara, M.D., who presented a combined abstract on a GCP and AHCC Testimonial Trial.

During an exclusive reception at the Symposium, members of the U.S. AHCC Association, presented a copy of the esteemed NutrAward they received at the Nutracon Conference, to the founding company and Symposium sponsor, Amino Up Chemical Co., Ltd. In March, Quality of Life Labs received the NutrAward, Best New Product of 2002, for their ingredient AHCC, at the Nutracon Conference. Nutracon is the leading educational and networking event for top-level executives in the cosmeceutical, dietary supplement, nutraceutical and functional/medical foods industries in the United States. Executives at the Nutracon Conference awarded AHCC this honor on behalf of its scientific merit, efficacy, safety, innovation, market potential and credibility to advance industry.

If you are interested in receiving further details, meeting notes or abstracts from the 10th International Symposium of AHCC(R) and GCP(TM) Research Associations, please contact Tiia Sumera at [email protected] Details will also be added to the Web sites, and , as soon as they are available.

Vitamins C and E support breathing following an operation

Patients who have recently undergone an operation experience less breathing problems after being given a cocktail of vitamins C and E. This is the conclusion reached by researchers from the Leiden University Medical Center following experiments with patients and healthy volunteers.

During the first two to three days after a major abdominal operation, most patients have frequent episodes of airway obstruction and hypoxaemia. This can lead to an increase in the heart rate and blood pressure, which can eventually result in heart muscle damage. An apparently restful patient where nothing seems to be wrong can then suddenly experience an unexpected heart attack.

The breathing problems are a side effect of the necessary sedatives and painkillers which recovering patients receive. The researchers from Leiden discovered that the medicines enhance each other's undesirable side effects.

In searching for the mechanism behind the breathing problems, it transpired that the administration of vitamins C and E prevents many of the problems. After an encouraging experiment with vitamins C and E on an experimental animal, the researchers subjected 34 healthy men to a test. The volunteers received less oxygen than normal for a period of three minutes. Prior to this some of the men had to take sedatives and vitamins C and E. Another group were not allowed vitamins.

The group who had taken vitamins experienced fewer disruptions to the breathing than the control group who had not taken vitamins. The researchers suspect that stress and pain after an invasive operation bring about a positive effect. Stress and pain keep the body, and thereby the breathing, relatively alert.

In follow-on studies the researchers want to determine whether vitamin C has to be given in combination with vitamin E. They will also study other sorts of sedatives and painkillers. In addition to this they will further examine the role of stress and pain after an operation. Particular attention will be given to the carotid body, a special organ in the carotid artery. This organ seems to function poorly in recovering patients.


Further information can be obtained from Dr Diederik Nieuwenhuijs (Department of Anaesthesiology, Leiden University Medical Center), tel. 31-71-526-2301 (secretariat), fax 31-71-524-8230 (secretariat), e-mail [email protected] The defence of the doctoral thesis took place on 4 September 2002. Dr Nieuwenhuijs' supervisor was Prof. J.W. van Kleef.

The research was funded by the Netherlands Organisation for Scientific Research (NWO).

BI Nutraceuticals Appoints Katie Ferren as Director of Botanical Products

LONG BEACH, Calif., Sept. 10, 2002 -- BI Nutraceuticals (BI) today announced the appointment of Katie Ferren as director of its botanical products division. As director of botanical products, Ferren will be responsible for strategic direction of the company's Herbal Extracts and Herbal Powders and Teas divisions.

BI Nutraceuticals is a leading supplier of nutritional ingredients servicing the dietary supplement, pharmaceutical and food industries, manufactures, markets and distributes a diverse product offering, including whole herb powders and teas, unique fruit and vegetable ingredients, herbal extracts and other nutritional supplements.

Ferren joins BI Nutraceuticals, with more than seven years of experience in the natural products industry. Prior to joining BI, she served as marketing director for OptiPure/Soft Gel Technologies. While at OptiPure, Ferren headed a team that successfully launched over ten new products into the natural products marketplace, one of which proved to be that company's most profitable raw material ingredient. She also participated in operational procedures such as hiring, cross training and budgeting for departments outside of marketing. Earlier, Ferren held the position of executive vice president of sales and marketing for Optio Health Products and held a similar position with American Nutraceutical Products.

"We welcome the seasoned expertise of Katie Ferren, and are confident that her focused leadership will complement our ongoing efforts to maintain the quality of our ingredients, enhance customer service and increase the diversity of products that BI offers in the herbal powder and extract product lines," said Peter Hafermann, vice president, sales and marketing, BI Nutraceuticals.

BI, founded in 1977 and headquartered in Long Beach, California, is a full service supplier of dietary supplements. BI manufactured products undergo quality testing under the Identilok(r) species identification process. BI's products include whole herb powders and teas, standardized and drug ratio extracts, custom blends designed for specific indications, vitamins, minerals and other dietary supplements.

For more information call (310) 669-2158, email [email protected] or visit

Cargill Health & Food Technologies Presents AdvantaSoy™ Isoflavone Prototypes at HiE 2002

Cargill’s line of health-promoting ingredients spans several categories

MINNEAPOLIS – September 9, 2002 – Cargill Health & Food Technologies (H&FT) will present functional food prototypes focusing on women’s health at the Health Ingredients Europe (HiE) 2002 Conference Sept. 17-19th. Prototype products on display will include chocolates and chai tea made with AdvantaSoy™ Clear™ soy isoflavones. H&FT will be in Hall 1 booth D-19 at the HiE Conference.

H&FT has raised the bar on chai by adding soy isoflavones in the form of AdvantaSoy™ Clear™. Preliminary data suggests that soy isoflavones may benefit women by relieving some menopausal symptoms and may help maintain bone health. What is unique about both the chocolates and AdvantaSoy™ chai tea is that the products retain their traditional flavor, color and consistency.

"Cargill’s ability to enhance these popular food products is made possible by the unique processing of AdvantaSoy™ Clear™, which reduces the unpleasant odor and flavor typically associated with soy isoflavones," said H&FT President Ted Ziemann. "The products to be showcased in our booth prove that AdvantaSoy™ Clear™ meets the challenge of creating new functional foods that promote health and retain the delicious flavor and aroma which made them popular in the first place."

H&FT provides proprietary science and technology for food applications, new product development and regulatory support.

Cargill Health & Food Technologies, based in Minneapolis, is a leading developer, processor and marketer of science-based, healthy ingredients for food and dietary supplements worldwide. It is a business unit of Cargill Incorporated, an international marketer, processor and distributor of agricultural, food, financial and industrial products and services with 97,000 employees in 59 countries. The company provides distinctive customer solutions in supply chain management, food applications, and health and nutrition.

Flaxseed May Cut Cholesterol Slightly in Women

NEW YORK (Reuters Health) - Flaxseed may help to reduce levels of cholesterol in the blood of postmenopausal women, researchers report.

Overall, total cholesterol fell in the women by an average of 6%, according to the report in the Journal of Clinical Endocrinology and Metabolism. While LDL cholesterol fell, so did HDL ("good") cholesterol, resulting in only a minor reduction in the ratio of "bad" to "good" cholesterol.

Flaxseed is a whole grain that can be found in health food stores and some supermarkets. It can be sprinkled on food, or is sometimes used in baked goods, such as muffins or bread. Flaxseed is rich in lignans, a group of phytoestrogens. These plant-based estrogen-like compounds are associated with lower levels of total cholesterol and LDL ("bad") cholesterol, possibly due to their fiber and omega-3 fatty acid content.

In the study, volunteers consumed 40 grams of either ground flaxseed or wheat daily for 3 months. All 36 women who completed the study took a supplement containing 1,000 milligrams of calcium and 400 international units of vitamin D, which helps the body to absorb calcium.

Apolipoprotein B (apo B), a cholesterol-carrying molecule that may be a more sensitive indicator of heart disease risk than cholesterol alone, fell by nearly 8% among women who consumed flaxseed.

There was no reduction in cholesterol among women who took the wheat supplement, report researchers, and neither the flaxseed nor the wheat had any affect on bone metabolism.

"The findings of the present study suggest that flaxseed consumption by postmenopausal women is effective in reducing...known risk factors of coronary heart disease," Dr. Bahram H. Arjmandi from Oklahoma State University in Stillwater and colleagues conclude.

But more research is needed into the mechanisms, they add.

SOURCE: The Journal of Clinical Endocrinology and Metabolism 2002;87:1527-1532.

Unigen(TM) Pharmaceuticals, Inc. And Doctors’ Preferred, Inc. Sign Exclusive Agreement

Univestin(TM) Marketed Through One of the Nation’s Largest Direct Mail Supplement Distributors

BROOMFIELD, CO,-- Unigen (TM) Pharmaceuticals, Inc. , a leading natural products research and development facility and proprietary ingredients supplier, signed an exclusive multi-year agreement with Doctors’ Preferred, Inc.(DPI), a division of Phillips Health, LLC. , one of the nation’s largest direct mail supplement distributors. The agreement entails marketing Unigen’s Univestin product through the DPI catalog and direct mail based marketing channels in the USA and Canada.

"It is strategically important for Unigen to be involved with such a high profile distributor,” stated Regan Miles, vice president of sales and marketing for Unigen Pharmaceuticals, Inc. “Distributing Univestin through Doctors’ Preferred direct mail outlets adds significant exposure to our new product as well as educates our largest market.”

Univestin is Unigen’s proprietary, patent pending dietary supplement ingredient that has been in development for over four years. It is a botanical compound that is compromised of all natural plant sources. Univestin is scientifically proven fast, efficacious, and safe in helping to promote increased mobility and healthy joint function. Univestin is currently involved in a major, double blind human clinical trial.

“We are delighted to work with Unigen in obtaining a key joint health component for future use in our DPI brands,” said Phillips Health Executive Vice President Edward Hauck. “DPI has earned a solid reputation for offering supplements of the highest quality, and Unigen’s new Univestin will be an excellent addition to our health advisors’ formulations.”


Unigen(TM) Pharmaceuticals, Inc.
Unigen is dedicated to the discovery of botanically derived therapeutic compounds that address consumer health needs and help improve the quality of human life. Unigen ( ), and sister company Aloecorp, are subsidiaries of the Unigen Group of companies. Each company focuses on identifying and studying the unique ingredients of medicinal botanicals and then formulating proprietary raw materials for use in cosmeceutical, nutraceutical, and pharmaceutical products.

Doctors’ Preferred, Inc.
Doctors' Preferred, Inc. (DPI), Potomac, Md., a subsidiary of Phillips Health, LLC, is one of the nation's largest direct mail vitamin and supplement distributors. The company provides a variety of herbs and nutritionals as well as an automatic replenishment program that allows customers to devise a suitable, personalized regimen. DPI markets brands formulated exclusively by individual doctors--all of whom are leaders in the field of complementary and alternative medicine. These include Dr. Julian Whitaker's Healthy Directions brand, Dr. Stephen Sinatra's Advanced BioSolutions brand, Dr. Susan Lark's Daily Balance brand and Dr. David Williams' Mountain Home Nutritionals brand.

DPI's parent company, Phillips Health, is the recognized leader in providing authoritative health solutions to the consumer marketplace. The company produces newsletters, special reports and online resources for its team of prominent health experts, who each offers safe, natural and effective ways to solve and prevent health problems. Phillips Health is a Phillips International, Inc., company ( .)

# # #

Regan Miles
Unigen Pharmaceuticals, Inc.
[email protected]

Martek Announces Third Quarter 2002 Results - Nutritional Product Sales Increase 167 Percent

Losses Down 25% Before Restructuring Charge

COLUMBIA, Md., Sept. 10 /PRNewswire-FirstCall/ -- Martek Biosciences Corporation (Nasdaq: MATK) today announced its financial results for the third quarter and nine months ended July 31, 2002. For the quarter ended July 31, 2002 (3rd Qtr FY 02) revenues of $13,544,000 were realized, up from $5,565,000 for the 3rd Qtr FY 01, and for the nine months ended July 31, 2002 revenues of $30,937,000 were recognized, up from $13,073,000 for the same period in 2001. Martek's net loss for the 3rd Qtr FY 02 was $3,744,000, or $.16 per share.

Before taking into account a charge of $1,266,000 relating to the restructuring of the Company's food and beverage sales efforts, the net loss for the 3rd Qtr would have been $2,478,000, or $.11 per share. The net loss for the nine months ended July 31, 2002 was $24,608,000, or $1.14 per share. Included in this amount is a charge of $15,788,000 taken in the 2nd Qtr FY 02 relating to the write-off of a portion of the purchase price of OmegaTech, Inc. under applicable accounting rules.

"These numbers mean a lot more babies are getting the right formula," stated Henry Linsert, Jr., Chief Executive Officer of Martek. "Because of this, Martek should be in the black in its 4th quarter."

Review of 3rd Qtr 2002 Consolidated Financial Results Sales of nutritional products increased by $8,268,000 or 167% for the 3rd Qtr FY 02 over the 3rd Qtr FY 01 and increased $19,369,000 or 183% for the first nine months of FY 02 when compared to the same period in 2001. (For a history of the Company's sales of nutritional products see a chart at .) This growth in nutritional product sales is primarily due to increased sales of Martek's oils to the Company's infant formula licensees. Over 80% of Martek's 3rd quarter revenue was generated by sales of docosahexaenoic acid (DHA) and arachidonic acid (ARA) to three of the Company's infant formula licensees; Mead Johnson, Wyeth and Abbott. Mead Johnson and Abbott are both marketing supplemented infant formulas in the U.S., and Mead, Abbott and Wyeth are collectively marketing supplemented term infant formula in over 25 countries around the world. Sales of other products decreased by $241,000 during the 3rd Qtr FY 02 and $734,000 during the nine month period ended July 31, 2002 compared to the corresponding periods in 2001 due to the sale of the stable isotope product line in November 2001.

As a result of the above, total revenues increased by $7,979,000 or 143% during the 3rd Qtr FY 02 over the 3rd Qtr FY 01, and increased by $17,864,000 or 137% for the nine month period ended July 31, 2002 over the same period in 2001.

Martek's overall cost of sales improved during the 3rd Qtr FY 02 primarily due to lower costs from DSM Gist B.V. (DSM), its third party supplier of ARA oil. Specifically, Martek's cost of product sales and royalties decreased to 63% of revenues from product sales and royalties for the 3rd Qtr FY 02, down from 71% for the 3rd Qtr FY 01. For the nine-month period ended July 31, 2002, cost of product sales and royalties increased to 68% of revenues from product sales and royalties, up from 67% for the nine-month period ended July 31, 2001. Martek's gross profit margins are most significantly impacted by the cost of ARA oil (as compared to DHA oil), which represents approximately two- thirds of all sales to infant formula licensees and is currently manufactured by a third party, DSM. The improved gross profit margin in the 3rd Qtr FY 02 is primarily due to lower ARA costs as a result of the complete amortization of the start up costs of DSM (previously included in the cost of ARA) and increased purchase volumes. Management expects continued decreases in the future costs of ARA from DSM as Martek's sales volumes continue to increase.

Management also anticipates significant reductions in DHA production costs as: (1) economies of scale are realized from increased output from the fermentation expansion which is currently underway at the Company's Winchester, KY production plant, and (2) yield improvements from the Company's past R&D efforts are realized.

In October 2001, the Company began construction to significantly increase its fermentation capacity and add a new shipping, packaging, cold storage and office building at its Winchester, KY plant. Upon completion, production capacity at the plant should more than double. Martek has also signed a manufacturing agreement with FermPro for DHA production while the due diligence relating to a potential acquisition is being performed. The Company began receiving DHA under this manufacturing agreement with FermPro in late June. Management believes that with the expansion at the Company's Winchester, KY plant, in conjunction with the DHA production from FermPro, Martek should have the capacity needed to meet FY 03 market demand and realize improved economies of scale.

Selling, general and administrative expenses increased by $2,465,000 or 120% during the 3rd Qtr FY 02 and increased by $2,776,000 or 47% in the nine months ended July 31, 2002 over the third quarter and nine months ended July 31, 2001, respectively. The majority of the increase in the 3rd Qtr FY 02 relates to operating costs associated with Martek Boulder which was acquired on April 25, 2002, and consolidated with Martek's operations for the first time in the 3rd Qtr FY 02. Management expects these costs to decrease in the 4th Qtr FY 02 as a result of the restructuring of the food and beverage sales efforts that occurred in the 3rd quarter as discussed above.

Other operating expenses increased by $167,000 or 190% in the 3rd Qtr FY 02 compared to the 3rd Qtr FY 01, and decreased by $36,000 or 9% for the nine months ended July 31, 2002 compared to the same period in 2001. The increase in these expenses in the 3rd Qtr FY 02 as compared to the 3rd Qtr FY 01 is primarily due to costs associated with the evaluation of potential third party production facilities.

Other income decreased $113,000 or 33%, during the 3rd Qtr FY 02 compared to the 3rd Qtr FY 01, and decreased $240,000 or 24% during the nine months ended July 31, 2002 compared to the nine months ended July 31, 2001. These decreases were primarily due to lower interest earned on investments.

Acquisition and Restructuring
On April 25, 2002, Martek completed the acquisition of OmegaTech, Inc., a Boulder, Colorado producer of DHA ("OmegaTech" or "Martek Boulder"). The Company allocated $15,788,000 of the purchase price of OmegaTech to in-process research and development, resulting in a one-time charge under applicable accounting rules in the 2nd Qtr FY 02.

On July 29, 2002 the Company announced a restructuring of its food and beverage sales efforts, which included the termination of approximately 10 employees and consultants at Martek Boulder. The Company recorded a one-time charge of $1,266,000 during the 3rd Qtr FY 02 to account for severance and other costs associated with this restructuring.

As a result of the foregoing, net loss for the 3rd Qtr FY 02 was $3,744,000, or $.16 per share, compared to a net loss of $3,311,000, or $.17 per share for the 3rd Qtr FY 01. Net loss for the nine months ended July 31, 2002, was $24,608,000 or $1.14 per share, compared to a net loss of $10,127,000 or $.54 per share for the same period in 2001. The net loss for the 3rd Qtr FY 02 includes a charge of $1,266,000 related to restructuring of the food and beverage sales effort at Martek Boulder. Without taking into account this one-time charge, the net loss for the 3rd Qtr FY 02 would have been $2,478,000, or $.11 per share. The net loss for the nine months ended July 31, 2002 includes a charge of $15,788,000 taken in the 2nd Qtr FY 02 relating to the write-off of a portion of the purchase price of OmegaTech, Inc. under applicable accounting rules.

Recent Developments
In July 2002, Bristol-Myers Squibb announced in their 2nd quarter earnings release that their Mead Johnson division sales of Enfamil(R) increased 18% over the same period in 2001, and attributed this increase to the recent introduction of Enfamil(R) LIPIL(TM), an infant formula supplemented with Martek's DHA and ARA.

Mead Johnson also announced in August 2002 that it was adding two additional products to the Enfamil(R) LIPIL(TM) line of infant formulas. All of Mead Johnson's LIPIL products contain a blend of Martek's DHA and ARA oils.

The new products, Enfamil Premature LIPIL for premature infants still in the hospital, and Enfamil EnfaCare LIPIL for premature infants who have left the hospital, will soon be available to give all premature infants access to DHA and ARA supplementation.

In early July 2002 a European Patent Office ruled in favor of Martek's DHA patent by overturning a prior negative finding which had revoked one of Martek's European DHA patents. The decision was consistent with decisions of other patent offices around the world, keeping solid Martek's portfolio of over 350 granted and pending patents in the field of microalgae biotechnology.

Management's Outlook

Management believes that while quarterly results may show fluctuations in product sales, the outlook for future revenue growth remains positive and that, in the next 12 months, sales of nutritional oils into the infant formula and adult food and supplement market will continue to grow. To date, five of the Company's infant formula licensees have completed the regulatory process, where required, to sell infant formula supplemented with Martek's oils in over 60 countries around the world for term or pre-term infant formula products.

Two of these licensees are marketing supplemented products in the United States. Although OmegaTech's historical sales into the adult food and supplement market have been minimal, Management anticipates that over the next few years this business will expand and represent a larger potential market for Martek's nutritional oils than the infant formula market.

Investor Conference Call Webcast
Investors may listen to Martek's Senior Management discuss the Company's quarterly earnings and other current business issues on Tuesday, September 10, 2002 at 4:45 p.m. EDT by accessing Martek's website at , selecting the "Investors" tab, choosing "Live Webcast" and following the related instructions.

General Management's Outlook and other sections of this release contain forward- looking statements concerning, among other things: (1) expectations regarding future revenue growth, product introductions, growth in nutritional product sales, production expansion, margin and productivity improvements, applications and potential collaborations and acquisitions; (2) expectations regarding sales and royalties by and from infant formula licensees; (3) expectations regarding future efficiencies in manufacturing processes and the costs of production of nutritional oils and purchase of third-party manufactured oils; (4) expectations regarding the potential acquisition of and production from the FermPro facility; (5) future research and development costs; (6) expectations regarding the integration with Omegatech, Inc.; and (7) production capacity. These statements are based upon numerous assumptions which Martek cannot control and involve risks and uncertainties that could cause actual results to differ. These statements should be understood in light of the risk factors set forth above and in the Company's filings with the Securities and Exchange Commission, including, but not limited to our Form 10- K for the fiscal year ended October 31, 2001 and other filed reports on Form 10-Q and Form 8-K.

About Martek
Martek Biosciences Corporation develops, manufactures and sells products from microalgae. The Company's products include: (1) specialty, nutritional oils for infant formula that aid in the development of the eyes and central nervous system in newborns; (2) nutritional supplements and food ingredients that may play a beneficial role in promoting mental and cardiovascular health throughout life; and (3) new, powerful fluorescent markers for diagnostics, rapid miniaturized screening, and gene and protein detection.

Nutrition 21 Initiates Diachrome Clinical Study to Evaluate Improvement in Blood Sugar Control in Children and Adults with Type 2 Diabetes

PURCHASE, N.Y.--(BUSINESS WIRE)--Sept. 10, 2002--
Confirmation of Benefits of Diachrome as a Pediatric Nutrition Therapy Could Represent a Significant New and Long-Term Market Opportunity

Nutrition 21 (NASDAQ: NXXI), announced today a clinical study to evaluate the ability of the Company's nutritional supplement, Diachrome(tm), to improve blood glucose control in children and adults with type 2 diabetes.

The research study is designed to confirm earlier findings that Diachrome, a patented combination of chromium picolinate and biotin, improves blood sugar control in people with diabetes. The study is being conducted by Paul Harmatz, MD and Catherine Egli, MD at Children's Hospital Oakland, in conjunction with researchers from the University of Massachusetts, UCLA and Baylor University.

The study will use a pharmaceutical model that tests new drugs for diabetes. Approximately 90 people with type 2 diabetes will be enrolled in this study, which will take one year to complete. Five patients are already enrolled.

Gail Montgomery, President and CEO of Nutrition 21 stated, "It is now estimated that more than 13% of all children between the ages of 6 and 19 are overweight, greatly increasing their risk of developing type 2 diabetes, formerly considered an adult onset disease. More than 90% of the children with type 2 diabetes do not respond to treatment with diet and exercise alone. While pharmacological treatments are recognized as necessary to control the blood sugar levels of these children, there is a reluctance to administer the available drugs due to concerns regarding the long-term side affects associated with chronic use at such an early stage of life. In addition, the high cost of these medications over a lifetime places an enormous burden on both the patient and our healthcare system. There is a substantial opportunity for non-pharmacological treatments if they can improve outcomes, reduce side effects, and/or lower the cost of care for these children.

"This is our fourth clinical study on the benefits of Diachrome in people with type 2 diabetes. Our data are showing that supplemental Diachrome can significantly promote healthy blood sugar and cholesterol levels. We are looking forward to the completion of this study to see if Diachrome will either reduce the need for or potentially lower the required dose of prescribed medications in pediatric populations. A follow-up study to determine whether or not Diachrome may be used as a monotherapy for these patients is also being planned," she concluded.

About Nutrition 21
Nutrition 21 is a leading developer and marketer of nutritional products whose health benefits have been substantiated by clinical research. The market leader in nutritional chromium, Nutrition 21 currently holds 35 patents for nutrition products, 22 for chromium compounds and their uses. More information is available at

Safe Harbor Provision
The words "believe," "expect," "anticipate" and other similar expressions generally identify forward-looking statements. Forward-looking statements are based on the company's current expectations and are subject to market, competitive and regulatory factors and the other risks and uncertainties indicated from time to time in the company's filings with the Securities and Exchange Commission. Actual results can differ materially. The company makes no commitment to disclose any revisions to forward-looking statements.