luxe research presentation at innocos europe, paris

Growing Targeted Delivery Partnerships and Alliances in the Cosmetics and Personal Care Industries

Chananit Sintuu, Ph.D. -‐ Lux Research, Inc. InnoCos Europe June 8-‐9, 2011

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Lux Research

!   We help clients capitalize on science-‐driven innovation !   We focus on emerging technologies in the chemicals and materials sector

and the energy and environment sector (cleantech) !   We have practices in Water, Printed Electronics, Green Buildings,

Advanced Materials, Solar Components, Solar Systems, Smart Grid & Grid Storage, Electric Vehicles, Alternative Fuels, Bio-‐based Materials & Chemicals, China Innovation, and Targeted Delivery.

!   We have clients on six continents – blue-‐chip corporations, government agencies and laboratories, universities, investors, and SMBs

!   We source our intelligence from direct interaction with CEOs, CTOs, CSOs, and R&D execs at cutting-‐edge technology firms in our sectors of focus

!   We draw on our network to: •  Continuously monitor emerging technologies •  Identify discontinuities in technology commercialization •  Assist with company and technology evaluation •  We have global reach, with 50 employees in New York, Boston,

Singapore, and Amsterdam !   Research team combines deep technical expertise with business analysis;

60% hold advanced science or engineering degrees Svalbard Global

Seed Vault, Norway

Suntech solar factory, China

Qatar Science and Technology Park

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Agenda

!   Targeted Delivery: What it is and why partnerships are especially important in the field

!   Targeted delivery technology partnerships: what both sides say

!   Best targeted delivery partnership practices

!   How the targeted delivery technologies stack up to each other •  Companies developing

delivery technologies for personal care and cosmetics

!   Summary

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Agenda






!   Summary

Delivery technologies provide a span of control and targeting

Untargeted delivery Targeted delivery

High cost for large amount of active

molecule

Actives degraded or excreted before reaching target

Actives affect unintended

tissues

Too little of the needed dose reaches the

target

Lower cost for smaller amount of active

molecule and targeting system

Side effects mitigated or

eliminated

The right therapeutic

dose reaches the target

Less active released into the

environment

Active ingredient Targeting system

Source: Lux Research

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Partnerships in the Targeted Delivery Technology Value Chain link specialty chemicals, startups, and application developers

Materials Pla+orms Applica1ons

Polymers, dendrimers, chitosan, silica, monoclonal an@bodies, excipients, solvents, proteins, pep@des, small molecules, ac@ve pharmaceu@cal ingredients, vaccine adjuvants, etc.

Bio/chemical targe@ng, advanced materials, encapsula@on, device delivery, supercri@cal fluid technology, nanopar@culate reformula@on, injec@on depots, etc.

Healthcare and life sciences, pharmaceu@cal and biotech, food, beverage, agriculture, oil and gas, consumer goods, nutraceu@cals, cosmeceu@cals, personal care, etc.

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Targeted delivery technologies address needs in the Consumer, Agricultural, Industrial, and Medical industries

Technology developers

Medical

Agricultural

Industrial

Consumer products

•  Product development (health claims)

•  Environmental impact reduction (exposure to toxics)

•  Cost reduction •  Environmental impact

(runoff, overuse of antibiotics)

Technologies for targeted delivery, controlled release, encapsulation, formulation…

•  Cost reduc@on •  Environmental impact

(runoff, overuse of an@bio@cs)

•  New product development and lifecycle

•  Improved efficacy and compliance

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Consumer/Personal care products currently on the market which utilize advanced delivery systems

Company Product Indica1on / Applica1on Technology

Dermalect Cosmeceu@cals Confidence Injec@on Crease Concentra@on

An@-‐wrinkle Hyaluronic-‐filling spheres

DS Laboratories Spectral DNC Topical Hair Loss Solu@on

Hair regrowth Nanosomes

L’Oreal, Lancome Soleil SoW-‐Touch An@-‐Wrinkle Sun Cream SPF 15

Cosme@cs Vitamin nanocapsules

Celazome O-‐Plex Target Acne Spot Treatment

Acne Nanospheres

Sircuit Skin Cosmecu@cals Dr. Brandt Laser Relief An@-‐itch/rash Nanoencapsula@on

PerfectRx Eye Perfect Serum Cosme@cs Nanodelivery system

Celazome New Zealand Eye Treat with Lyphazome Technology

Cosme@cs Nanospheres

DERMAdoctor Faux Fillment Cosme@cs (concealer) Nanospheres of hyaluronic acid and fulvic acid

Nutra Luxe M.D. Lipo Reduc@on An@-‐Cellulite Crème

Cosme@cs (body firming) Nanodelivery system

Unilever Persil Fabric SoWener Fabric soWener Polymeric microspheres

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Agenda


Medical

Agri-‐cultural

Industrial

Consumer products






!   Summary

0% 20% 40% 60% 80% 100%

Cri@cal

Highly valuable

Valuable

Somewhat valuable

Not valuable

Buyers Technology Developers

0% 20% 40% 60% 80% 100%

Cri@cal

Highly valuable

Valuable

Somewhat valuable

Not valuable


Targeted delivery partnerships are the “end all be all” for developers, not so for buyers

•  “Collaboration is important. We have a technology that applies to multiple markets and engaging with the best experts in an open and collaborative way is optimal to unlocking the technology and driving new products forward.”

•  “Partnerships have been a part of our innovation strategy for many many years. We have had over 1500 partners with industry, start-‐ups, and academia…this is a reason why have a VC arm.”

“How highly do technology developers value partnerships with corpora1ons?”

“How highly do corpora1ons value partnerships with technology developers?”

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Corporate financial support and market validation are most important to targeted delivery developers

0% 20% 40% 60% 80% 100%

Market valida@on

Market knowledge

Technical support

Big-‐company name associa@on

Financial support

Buyers Technology Developers !   “Financial support is required to move

from proof of concept to a marketed solution.”

!   “We are rather small, so we try to participate in projects where the partner has a global reach and budget to finance the R&D project.”

!   “Hitching our wagon to a winning horse is essential, so market validation is key for us. The partner has the ability to commercialize the product and exploit the market.”

“What do technology developers value the most in corporate partners?”

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Targeted delivery technology developers add value to a large corporation’s portfolio

!   “If we can’t help them build on their differentiated pipeline, we shouldn’t be doing any deals with them in the first place.”

!   “Technology developers are focused and more driven…they help keep the big corporation ball rolling…and have innovative ways of approaching the problem.”

“What do corpora1ons value the most in technology developer partners?”

0% 20% 40% 60% 80% 100%

Value-‐add to corpora@on's porholio

Risk mi@ga@on

Technical support


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Buyers and developers have different ideas on when delivery technologies are ready for the market

0%

20%

40%

60%

80%

100%

0-‐1 year 1-‐3 years 3-‐5 years 5-‐10 years 10+ years

Technology Developers

Buyers

“What is the expected 1me-‐frame for commercializing research resul1ng from targeted delivery partnerships?

!   “Commercialization differs immensely with different delivery technologies and if they can be applied late stage or not.”

!   “Five to ten years is more reality than ideal.”

!   “Three to five years because we only expect to commercialize products using identified compounds.”

!   “Five to ten years because it takes that long to get through clinical trials and the regulatory process.”

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Agenda



!   Best targeted delivery partnership practices •  Medical •  Consumer products

!   How the targeted delivery technologies stack up to each other

!   Summary


Medical

Agri-‐cultural

Industrial

Consumer products

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Medical has decades of experience, but is blinded by hubris

!   Targeted delivery partnerships in pharma/health care lay the foundation for other industries

!   Targeted delivery partnerships work together to improve efficacy, lower costs, and achieve clinical milestones

!   Structured licensing deals should be limited to one product, with upfronts, milestones, and profit sharing

!   Delivering improved product performance leads to differentiated products and successful partnerships

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Medical application: Psivida

!   Develops injectable delivery systems for the eye; controlled-‐release implants injected with 25-‐gauge needle, resulting in self-‐sealing hole

!   Receives royalties from Bausch & Lomb on two products currently on the market

!   Pfizer has a 9% equity stake, along with co-‐development agreement worth $165 million

!   Development partnership with Alimera Sciences

!   Partners obligated to make more than $30 million in payments in the next fiscal year

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Consumer products is looking for breakthroughs, but often stretches the truth too far

!   Delivery partnerships in consumer products and personal care industry are becoming more common

!   Application-‐oriented partners make or break deals in consumer health and personal care

!   Deal structures should be more back-‐end loaded than pharma

!   Targeted delivery partners need to work with government officials and be wary of health claims

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Consumer products application: Monosol Rx

!   Thin-‐film formulations for prescription and over-‐the-‐counter drug delivery

!   Seven approved products on the market, including children's laxatives, children's cold medicine, breath fresheners, and several other over-‐the-‐counter (OTC) products

!   Two FDA-‐approved products in 2010: •  Zuplenz (treatment of nausea and vomiting) –

partnered with Strativa Pharmaceuticals •  Suboxone (treatment of opiod dependence) –

partnered with Reckitt Benckiser

!   Ten to 15 total partnerships in consumer products, pharma, and biotech

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What delivery-‐dependent industries can learn from each other

!   Medical: look to consumer products for appeal and usability in chronic disease management products

!   Consumer products: be wary of “becoming pharma” too early, but realize that it is your future

!   Agricultural: focus on process technologies and simple materials from consumer products to keep costs in check

!   Industrial: depending on the application, any one of the other three industries might have a solution ready


Medical

Agri-‐cultural

Industrial

Consumer products

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Agenda






!   Summary

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The Lux Innovation Grid Provides a Delivery Technology Evaluation Framework

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The “Technical Value” of a company is determined by the strength and value of its technology

Criterion Description Weight

Technology/Solution Value

Qualitative measure of the value of a company’s offering, in terms of performance and price

10%

IP Position Qualitative measure of the value of the company’s patents or trade secrets and considers defensibility

30%

Competitive Landscape

Qualitative rating of the strength and amount of competition a company faces

30%

Targeted Delivery Performance

Qualitative score based on key metrics, including bioavailability and speed of onset

30%

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A company’s ability to perform and achieve success determines its “business execution” score

Criterion Description Weight

Momentum Qualitative measure of the rate of a company’s progress 25%

Partnerships Qualitative measure of the strength and number of a company’s partnerships

20%

Revenue/Employees

Company’s revenue divided by the number of employees; measure of proBitability

10%

Barriers to Growth Qualitative measure of the effects of impending obstacles on the company’s growth

20%

Regulatory Factors Qualitative measure of the effects regulations will have on the company’s growth

5%

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A company’s completeness reflects its “Maturity”

Criterion Description Weight Employee Count Number of employees 30% Stage of Development Qualitative score given based on the company’s primary

product’s stage of development 30%

Revenue Amount of yearly revenue 30% Age Number of years since company was founded 10%

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The Lux Innovation Grid Provides a Delivery Technology Evaluation Framework

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Targeted Delivery Companies Vary in Attractiveness

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Companies focusing on personal care and cosmeceutical industries

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Aegis Therapeutics Absorption enhancers, peptide and protein stabilizing agents, and self-‐assembling hydrogels for enhanced drug delivery

!   Technologies boost transmucosal absorption and transdermal absorption with a wide range of drugs for enhanced delivery

!   Two full-‐time employees ; profitable

!   Currently has 24 licensees, including 4 "top-‐ten" pharma partners, a large multinational generics company, and several others •  Eight human clinical trials conducted as of 2011 by

licensees, including Dr. Reddy’s, Zelos Therapeutics, and others

!   Looking to license absorption-‐enhancing, self-‐assembling, aqeous hydrogel technology to large dermatology or cosmetics company for enhanced transdermal delivery of cosmeceutical actives •  In dermal applications, these hydrogels leave the skin

feeling soft with no sense of any residue when rubbed onto the skin.

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Nanocyte Micro-‐injectors from sea anemones to enhance delivery of actives through skin

!   Novel idea differentiated from other topical technologies with respect to formulation and raw material source

!   Targeting cosmeceuticals such as topical ointments for dermatology (acne and anti-‐aging treatments), personal care products (anti-‐perspirant and moisturizers) and pain relief (glucosamine for arthritis)

!   Closed investment round in 2010, which should help finance company through next few years

!   Efficacy and value in targeted indications remain to be seen, though premium prices will limit market penetration

!   Clients should engage, though wait until scale-‐up and cost metrics are demonstrated for specific applications before committing significant resources

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Salvona Technologies Polymeric microparticles and nanoparticles for controlled delivery of cosmeceuticals and generic drugs

!   Micron and sub-‐micron spheres formed by encapsulation technologies for timed and triggered release and deeper penetration of bioactive ingredients

!   Abandoned applications in agrochemicals and home care, shifting focus to cosmeceuticals and generic drugs

!   Current area of focus is in dermatological applications (anti-‐acne, rosacea, and inflammation)

!   Self-‐funded throughout its 12-‐year history; supplier for P&G, Estee Lauder, among others

!   Clients interested in cosmeceuticals and topical applications should engage, given track record and customers, but monitor results of change in focus closely

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Dermazone Solutions Liposomes for topical drug delivery, cosmeceuticals, and nutraceuticals

!   Launched FDA-‐approved topical treatment for chemotherapy-‐related burns in February 2010 with partner Hi-‐Tech Pharmaceuticals

!   Two more oral products on the market with Source Vitamin Company •  Once-‐a-‐day liquid multivitamin (launched May 2009) •  Vitamin D liquid supplement (launched June 2010)

!   Recent launch of new nutraceutical brand, Hyssop Health, for herbal supplements in 2010

!   Strong management team and aggressive product development through R&D is driving growth

!   Subsidiary Kara Vita markets skin care cosmeceuticals direct to consumers

!   Interested clients in pharma and nutraceuticals should engage now, but independently verify validity of claims

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Medical

Agri-‐cultural

Industrial

Consumer products

Summary & Outlook

!   Innovations in targeted delivery are consistently emerging and evolving

!   Targeted delivery partnerships are critical to tomorrow’s products in the consumer products, personal care, and cosmetics industries

•  Partnering best practices can help achieve a win-‐win relationship

!   Despite commonalities, each industry has its own quirks

•  Medical has decades of experience, but is blinded by hubris

•  Consumer products is looking for breakthroughs, but often stretches the truth too far

Thank you

Chananit Sintuu [email protected] www.luxresearchinc.com

luxe research presentation at innocos europe, paris

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