Sol-Gel Technologies Ltd. has sold its sunscreen activity to Merck Serono International SA , in order to focus on its pharmaceutical business. Sol-Gel did not disclose the size of the deal, but the initial payment is reportedly more than $10 million, plus royalties on product sales.
Merck Serono already had a license from Sol-Gel to use the product, and it has now bought the entire business.
Sol-Gel developed a method to encase high concentrations of US Food and Drug Administration (FDA) approved ultraviolet-absorbing transparent, silica micro-shells for active pharmaceutical ingredients (API). The proprietary encapsulation system keeps the organic filters on the top layers of the skin. The capsule protects the API compound, extends its shelf-life, and delays the release of the compound in a controlled manner.
Sol-Gel's sunscreen business was its main activity until recently, generating a few million dollars in annual turnover.
Sol-Gel has wanted to refocus from cosmetics to pharmaceuticals ever since closing its previous financing round in early 2006. The company recently signed a contract with an international dermatology products company, under which Sol-Gel sold rights to the encapsulation method for use with an acne treatment. The encapsulation extends the shelf-life of the treatment and reduces its side effects.
Sol-Gel believes that its dermatology encapsulation activity will be its most revenue-generating business in the coming years. Sol-Gel did not disclose details of this contract, but said that the initial payment totaled several tens of millions of dollars, and that there would be future milestone payments. The company predicts tens of millions of dollars in revenue a year after the product is launched.
Published by Globes [online], Israel business news - www.globes-online.com - on January 24, 2008
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