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Now selling in chain stores, commercial efforts growing for animal, other applications

[caption id="attachment_29371" align="alignright" width="282" caption="It won’t hurt! Vetericyn, a formulation of Oculus Microcyn, is taking off among veterinarians and pet owners"][/caption]

PETALUMA – In two years, Oculus Innovative Sciences has turned itself from a struggling pre-clinical biotech company to a seller of a range of branded commercial products.

“We’re not abandoning our prescription Microcyn product for the treatment of serious wounds, but our goal is to become a profitable company without waiting for Microcyn to complete the clinical process,” said Oculus founder and CEO Hoji Alimi.

To get to $3.5 million in revenues that would represent break-even – Oculus currently is at about $2.3 million – the company has launched several commercial products.

The challenge is to market them while continuing to cut costs, crucial to maintaining operations.

“The answer for us is marketing partners, partners who will take on all the expenses of packaging and selling products based on our formula while giving us, ideally, half the profits,” said Mr. Alimi.

The most aggressive of the Oculus marketing partners is a Southern California startup formed for that purpose. Innovacyn has moved rapidly into mass markets with two Microcyn-based products: Vetericyn for the treatment of wounds on horses and farm animals, and Puracyn, an antiseptic for humans.

“Over 5,000 stores carry animal health care products, in addition to veterinarians,” said Mr. Alimi.

Oculus ships product in bulk to Innovacyn, where it’s bottled, labeled, advertised and sold in an increasing number of chain stores.

While Innovacyn ramps up, Oculus is taking a 20 percent royalty. That’s due to bump up to 30 percent in late July.

With demand for Vetericyn growing, this month Innovacyn began targeting companion animals, a huge market, and then pets.

“In this country people spend more on their animals than they do on themselves,” said Mr. Alimi.

Once Innovacyn had its marketing network up and running for Vetericyn it made sense to market Puracyn as well. Both products can now be found in all the major chain stores.

Another potentially lucrative partnership for Oculus is with Onset Therapeutics. With a dermatology focus and 40 sales people, Onset has combined Microcyn with one of its own products and is marketing it aggressively to dermatologists, said Mr. Alimi.

“When our next dermatology product is cleared by the FDA, we have a partner waiting to sell it into the prescription market for half the royalties,” he said.

“Four years ago we were beating the bushes for marketing partners. Now they come to us. It’s wonderful, having products to sell.”

Oculus retains a 77-person sales force of its own to sell Microcyn for minor wound care to hospitals and nursing homes. Eventually the company would like to replace that team with a partner.

“We are quite close to profitability,” said Mr. Alimi. “Given our current run rate of $10 million and our growth curve it’s doable in about 12 to 16 months.”

On Feb. 3, Oculus reported total revenue was $2.3 million in the third quarter of fiscal 2011, compared to $1.6 million in the third quarter of fiscal 2010. Product revenue was $2.0 million, up 48 percent from $1.4 million in the prior third quarter.

Oculus employs 25 in its Petaluma headquarters, 40 in Mexico, where the purchase of Microcyn is a reimbursable health expense. In the U.S. such liquids are not reimbursable.

“That’s one thing that we love about our animal care products,” said Mr. Alimi. “Animals aren’t interested in reimbursements.”