Medical solutions company OBJ Limited (ASX: OBJ) has signed a licencing term sheet with consumer goods firm Procter & Gamble (P&G) for the first fully integrated package product using its technology.
In explaining its “breakthrough” integrated skincare product, OBJ said it delivers with precise placement and then drives the active ingredient more effectively into the deeper layers of the skin for enhanced performance.
The product is the first to integrate OBJ’s magnetic microarray technology with a pre-filled, airless pump pack, which is conveniently sized.
It is anticipated that the technology will initially serve P&G’s SK-II skincare business, with plans afoot to initially target the firm’s online arm in the second quarter of 2019.
Term sheet details
While the royalty rates and payment terms for the new product are confidential, OBJ said it had negotiated favourable terms including payment in advance rather than in arrears, with an adjustment mechanism for over or under prepayment.
In addition, royalties will now be recorded upon shipment of the product by the manufacturer.
Increased royalty benefit from repeat purchases compares with previously licensed technologies in which the chemistry and the enhanced skin penetration technology were provided separately.
The new licensing term sheet covers all territories worldwide and marks the fifth product licensed by OBJ to P&G under an agreement between the companies.
Technology to provide favourable returns
While this is the first such integrated product to come to the market, the Perth-based company is developing additional products using the same integrated format.
“The upcoming launch of our first integrated product is an important milestone in terms of delivering a greater return on our technology development,” OBJ managing director and chief technical officer Jeffrey Edwards said.
“It has also been a priority of the board to reset the way our licensing term sheets with P&G are negotiated, and to this end, we are very satisfied with the outcome we have achieved for this product.”
OBJ considers itself a leading developer of magnetic, micro-array drug and ingredient delivery technologies. Its current business activities include the provision of a range of patented products for the pharmaceutical, healthcare and consumer goods sectors.
2018 has proven to be a busy year for OBJ, with the company undertaking a complete reassessment of its business strategy as it moves from its base as an R&D company toward commercialisation of its technology.
OBJ’s shares gained 5.5% in afternoon trade to $0.019.