MGC Pharmaceuticals (ASX: MXC), an Australian medicinal cannabis company, has announced that its European subsidiary MGC Derma has signed a sales and distribution agreement with Cult Beauty, a leading global pureplay online beauty store.
The deal will see Cult Beauty launching 15 of MGC’s cannabidiol cosmetic products, as well as its ‘Derma Plus’ skin care range as of February 1st 2018. It is expected that revenues from the deal later in 2018 will be dependent on sales of the products and a 6-month exclusive marketing campaign.
MGC’s Derma Plus product is a Herbal Repair Cream; utilising proprietary cannabidiol (CBD) compounds and used for the daily relief of mild forms of psoriasis. Independent tests have shown Derma Plus to have an efficacy rate of 69% (after 4 weeks of evaluation) in the treatment of skin itchiness, flaking and severe dryness. The Herbal Repair Cream is currently available for sale to MGC Derma customers through their existing commercial distribution channels and newly established eCommerce platforms such as Cult Beauty.
The wider cosmetics market in the treatment of psoriasis was worth US$7.8 billion in 2015 and is projected to grow at a CAGR rate between 2016-2024, attaining a value of US$12.1 billion by 2024, according to ‘Transparency Market Research Psoriasis Treatment Market’.
According to the International Federation of Psoriasis Association, approximately 5% people suffer from one or more forms of psoriasis around the world each year. In the United States alone, psoriasis affects nearly 2% of the entire population (7.5 million people). Moreover, approximately 100,000 new cases are registered and reported each year, thereby creating a growing market.
“This agreement, with a world-renowned beauty products e-tailer provides our Derma division with a new platform to market our growing range of CBD-based skin care products to a new and more diverse global cosmetics market,” said Roby Zomer, Co-founder and CEO of MGC Pharmaceuticals.
“Cult Beauty individually and carefully selects each product that is marketed through its site, so we are delighted that they have recognised the efficacy of our products which work with the body’s natural system to support the skin’s response,” he added.
News of MGC’s Canadian partnership venture was met positively by investors in early Monday morning trade as MGC shares traded up to $0.115 per share, around 7% higher than last Friday’s close.