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This article was originally published in The Tan Sheet

Executive Summary

BLOCK DRUG ACQUIRES PENEDERM's DURASCREEN SUNSCREEN LINE under an agreement announced the week of March 22. Under the deal, Block Drug will pay Foster City, Calif.-based Penederm royalties on U.S. sales of DuraScreen SPF 15 and future DuraScreen line extensions. Penederm retains non-U.S. rights to DuraScreen. Financial terms of the agreement were not disclosed. Test marketed in California since 1991, DuraScreen comes in a 3.5 ounce lotion that is priced between $ 7-$ 8 at retail. The Block acquisition will enable a national launch of the product, Penederm said. Although DuraScreen is available over-the-counter, Penederm said it expects that the product will be ethically promoted. The sunscreen incorporates Penederm's TopiCare delivery system, which is essentially a polymer compound that traps the sunscreen in the epidermis and does not allow it to rub off or wash away, Penederm said. One application of the broad-spectrum sunscreen provides eight hours of SPF 15 protection, promotional materials say. They also note that DuraScreen, which contains UVB/UVA absorbers and an IR blocker, "is moisturizing, PABA-free, noncomedogenic, and compatible with makeup." Another component of the agreement gives Block's Reed & Carnrick division marketing responsibility for Penederm's PeneCare (lactic acid) OTC treatment for "severe dry skin" as well as "certain future Penederm prescription products currently under development," according to Penederm. Reed & Carnrick will detail dermatologists and other physicians as well as sell and distribute PeneCare to retail accounts via its 140-person sales force, which includes a unit of 35 reps specifically targeted at dermatologists. Penederm does not have a sales force. "This arrangement with Reed & Carnrick allows Penederm to meet a key objective of obtaining nationally established physician detailing efforts, distribution and sales support for its dermatologic products," Penederm Chairman and CEO Harris Goodman said in a release. Available in lotion (5% lactic acid) and concentrated cream (7.5% lactic acid) formulations, PeneCare also has been test marketed in California since 1991. Retail prices for PeneCare, which also employs the TopiCare technology, have ranged from $ 7-8 per eight-ounce bottles of the lotion and four-ounce tubes of the cream. PeneCare provides "quick improvement that lasts even through hand washing," promotional materials claim, "and gives superior protection against detergent irritation -- outperforming two leading dry skin products." Penederm expects PeneCare to compete with prescription lotions for the treatment of dry skin. The company asserted in promotional materials that clinical trials have proven that PeneCare is "equal to a 12% lactic acid prescription product in reducing symptoms of severe dry skin." Privately held Penederm was formed shortly after the TopiCare technology was discovered in 1987. The company's goal is to "commercialize more effective and safer topical dermatologic products utilizing the Penederm delivery technologies and to license in other unique molecules or products with distinct patent benefits," according to a corporate profile. Penederm products are developed "primarily for use in the U.S. by dermatologists and pharmacists in treating their patients," the profile says. The company said it plans to market its products worldwide "through licensing and other collaborative relationships, and will license its technology worldwide to cosmetic and consumer skin and hair care companies." Penederm Rx and OTC products in development include treatments for acne, fungal diseases, psoriasis and photodamaged skin. Penederm's operations to date have been funded with venture capital.

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