Facing Reality

August 3, 2009

A strong conference program wasn’t enough to overcome the impact of the recession, as the 6th Cosmeceuticals conference drew far fewer attendees than expected.

Facing Reality

A strong conference program wasn’t enough to overcome the impact of the recession, as the 6th Cosmeceuticals conference drew far fewer attendees than expected.

Tom Branna
Editorial Director

Apparently, there is something worse than wrinkles…losing your travel budget or your job! With the effects of the recession evident, the 6th Annual Cosmeceuticals conference drew a small audience to New York City in June, despite a strong lineup of speakers that included dermatologists and industry experts.

Organizers put the global anti-aging category at $65 billion in 2008, and predict sales will top $105 billion by 2013.

“This conference, in the heart of New York City, brought together renowned scientific researchers, business leaders and popular press from both the dermatological and global beauty industry for two very busy days,” observed program chairman and Happi columnist Navin Geria, vice president, research and development, SpaDermaceutical Pro- ducts Group. “The conference generated most valuable and actionable insights on the latest research innovations in the field of cosmeceuticals, that are sure to redefine our businesses.”

Mr. Geria noted that the event had substantial representation from leading cosmetic companies such as Avon, Estée Lauder and NuSkin, as well as legal and regulatory representatives from prominent legal firms.

DDF founder and dermatologist Howard Sobel kicked off the conference with a keynote on the growing demand for cosmeceuticals among older populations. He predicted cosmeceutical sales would grow 7.7% a year to $8.2 billion by 2012. During that time, cosmetic surgery procedures are expected to grow 7% a year to 18.2 million.

“Cosmeceuticals will become more competitive with professional services,” Dr. Sobel predicted.

Some of the most promising categories will include age-defying products, which are projected to grow 9.7% a year to $2.8 billion by 2012. Some of the ingredients to watch in the anti-aging category are peptides, glucosamine, niacinamide and botanical extract skin-tightening agents.

Dr. Sobel noted that demand for acne products will remain strong, but profits continue to fall due to market pressure and a lack of innovation. Still, a lack of innovation hasn’t stopped Guthy-Renker’s Pro-Activ brand from ringing up more than $1 billion (retail) in sales. Dr. Sobel noted that the brand’s popularity has dramatically affected pa-tients, many of whom may not purchase more expensive acne care products.

Dr. Sobel called sunscreens the most important cosmeceutical category, but he noted that compliance among consumers remains an issue. Still, sales of sunscreens are expected to rise 6.2% a year to $380 million by 2012, while sunless tanners are growing at 9.8% a year.

“People are realizing that a tan is not cool anymore,” observed Dr. Sobel.

Consumer demand for cosmeceuticals is driving sales of specialty chemicals. According to Dr. Sobel, sales of these ingredients are increasing 7.7% a year and are expected to reach $1.4 billion in 2012. Taking a closer look at this ingredient category, Dr. Sobel noted that demand for acids has slowed considerably in recent years. Sales of acids are expected to rise just 4.2% a year to $80 million by 2012, as consumers move toward non-irritating ingredients.

Although stability is a challenge and concerns of allergy persist, enzymes are popular acid alternatives, as consumers move toward “natural” anti-aging skin care products. In the future, some popular anti-aging enzymes will include:
• Trypsin and pancreatin, which are alternatives to papain and bromelain;
• Collagenase, which breaks down collagen to improve keloid scars, cellulite and skin defects; and
• Glycosidase and lysozyme, which are prized for their anti-acne benefits.

Sales of cosmetic proteins are expected to rise 8.9% a year to $98 million in 2012, while sales of amino acids are expected to post double-digit gains to $27 million during that time. Finally, botanical extract sales will reach $110 million driven by demand for grape seed extract, milk thistle, lotein, kiwi, soy and ginkgo biloba.

All of these ingredients and cosmetic procedures revolve around one consumer goal: to look good. Industry consultant Wendy Lewis looked at consumer attitudes about aging and told the audience that today, more than ever, women want to avoid surgical procedures as much as possible. Four key concerns among women include anti-aging, anti-acne, anti-hyperpigmentation and anti-redness. To help achieve these goals, more women are applying daily SPF, opting for neurotoxin (Botox) treatments and using retinoids.

Consumers consider Botox, fillers and other injectables to be less invasive than traditional cosmetic surgery, according to Ms. Lewis. Along these lines, lasers too, are gaining in popularity. Lasers have applications in skin rejuvenation, tightening, brown patches, redness and acne scars.

The Aging Process

Nu Skin researchers have discovered an enzyme, arNox, which is partly responsible for internal aging. According to Helen E. Knaggs, vice president, global research and development at NuSkin, arNox is present in skin cells and its activity increases with aging. Dr. Knaggs noted that people with low arNox levels look an average of seven years younger than their chronological age, whereas individuals with high levels of arNox appear an average of seven years older than their age.

While arNox significantly increases oxidative damage, Dr. Knaggs noted it can be prevented by superoxide dismutase, which destroys the superoxide anion. Futhermore, rabbit polyclonal anti-arNox antibody (RPC) shuts down arNox generation of superoxide.

Dr. Daniel Maes, senior vice president, research and development, Estée Lauder, introduced the audience to sirtuins, a gene family involved in the regulation of the aging process. He noted that centenarians have in common a gene called SIRT1, which helps cells live longer during periods of severe caloric restriction. Furthermore, SIRT1 slows down cellular metabolism to conserve life. According to Dr. Maes, if the cell cycle goes too fast, the cell doesn’t have time to repair the DNA.

“We don’t want to speed up exfoliation, we want to slow it down,” insisted Dr. Maes. “We can control the aging process. We can affect the cells to slow down the aging process.”

Speakers included (l-r): Navin Geria, Howard Sobel and Wendy Lewis.
Regulating the rate of cellular division should result in an increased DNA repair activity in the cells. As a result, there is a delay in apoptosis, leading to increased cell survival after UV exposure. Furthermore, treatment of skin cells with Resveratrate (resveratrol tri-phosphate) leads to increased resistance to UV-induced apoptosis due to the activation of SIRT1.

“It is possible to reduce UV-induced apoptosis not only by protecting the cells with sunscreens and antioxidants, but by activating a false alarm (caloric deprivation) via the activation of SIRT1,” concluded Dr. Maes. “Resvera-trate as other SIRT1 activators, provides these benefits by slowing down the rate of cellular division.”

At the conclusion of his presentation, Dr. Maes told the audience he was retiring on July 1. During his stellar 22-year career with Estée Lauder, Dr. Maes was responsible for many scientific breakthroughs, including his work on Resveratrate, a key ingredient in Re-Nutriv Ultimate Youth Crème.

The skin care needs of ethnic consumers are moving to the forefront of the industry as marketers discover a lucrative segment. Andrew Alexis, a New York dermatologist, reminded the audience that there are racial and ethnic differences in photoaging. Skin of color, for example, has mild wrinkling, volume loss (especially to the lower face), dyschromias, textural changes and dermatosis papulosa nigra (blacks) and seborrheic keratoses (east Asians).

He called for more studies involving subjects with Fitzpatrick skin types IV-VI and the development of more cosmeceuticals to address the needs of darker skinned consumers.

Ingredients for Ethnic Skin Care

Dr. Alexis reviewed some of the ingredients that have applications in ethnic skin care. These include natural ingredients with skin lightening effects, such as bearberry, aloe, soy, licorice, chitin and vitamins such as niacinamide andC. To treat hyperpigmentation, formulators should consider tyrosinase inhibitors such as arbutin, kojic acid, mulberry extract and retinoids. Melanosome transfer inhibitors include niacinamide and soybean trypsin inhibitors.

At the same time, however, he reminded the audience that less is more when it comes to skin care.

“Simplify your regimen,” he suggested. “It should include mild cleansing, moisturizing and sun protection.”

Finding the Right Partner

As issues surrounding cosmeceuticals grow more complex, few companies canafford to go it alone. Dr. Janice J. Teal, group vice president and chief science officer, Avon Products, Inc., told the audience about the benefits of forming partnerships as well as some of the pitfalls to avoid.

"Wall Street loves partnerships," she noted. "They can be a win-win and give you a breakthrough overnight."

After a quick review of the types of partnerships—purchase contract, license technology, license product, R&D research alliance and joint venture—Dr. Teal revealed the three key success factors in a strategic partnership:

• Picking the right partner;
• Picking the right partner and
• Picking the right partner!

"You really want a long-term partnership that gets the lawyers out of the way and let's you get down to business," she explained.

At Avon, Dr. Teal gets a lot of opportunities to partner with companies and individuals, but few of them are truly exciting. So, what is she looking for? Exciting technology that delivers noticeable results in a short amount of time. Moreover, the technology must include:

• Extraordinary clinical data from respected labs;
• Clear scientific underpinning for technology;
• Patented technology;
• First to market; and
• Safety data.

Once a technology excites the Avon staff, the potential partners must clearly define the roles and responsibilities for each. These include project management, conduct and pay for additional testing, safety reviews, registrations (such as REACH) and sourcing.

"Sourcing is no small thing," she told the audience. "A lot of entrepreneurs don't have a plant to make the active."

She also urged the audience to establish timelines and milestones before a project gets underway.

"If there is a problem, find it early. You'll need a Plan B," she said. "This is where honesty comes in with a partner."

Marketing issues also must be worked out. For instance, is there exclusivity for the material? Is it limited to specific industry sectors? Is the launch global or limited?

Financial issues must also be hammered out. Options include royalty arrangements, which are difficult to track; paid up license, which is a higher risk if the product flops; the cost built inot the cost of goods, which only works if partner manufacturers ingredient/product; Upfront/milestone development payments such as internal conflict, such as R&D or marketing budget; and how risks and issues are resolved.

Finally, the No. 1 issue that destroys a potential partnership is IP ownership. According to Dr. Teal, it's best if each side files patents before the partnership and whatever has been invented should be put in writing. But the big question that must be ironed out involves deciding what is jointly discovered or independently discovered after the partnership is formed.
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