Delivra implementing U.S. expansion strategy for topical creams

Chris Schnarr, President & CFO

Chris Schnarr, President & CFO

The major initiative for Delivra (TSX-V:DVA) in 2016 is to introduce its flagship LivRelief topical pain and nerve creams to the U.S. market, initially through a U.S. web store and Amazon, and then through regional and national retailers, such as Walmart, Walgreens and CVS.

“We are launching an aggressive digital campaign shortly, and later this year we’ll look to build on the momentum of that campaign to select and launch with one or more retailers in a very focused way, and then leverage that presence for additional distribution into 2017,” Chris Schnarr, president and CFO, says in an interview with BioTuesdays.com.

The three major U.S. national retailers represent almost 22,000 stores that could sell Delivra’s two flagship products.

LivRelief Pain is the No. 1 selling natural pain relief cream in Canada, targeting the treatment of joint and muscle pain, and LivRelief Nerve is the No. 1 selling nerve pain relief cream in Canada for sharp pain, such as shingles, diabetic neuropathy and nerve damage.

The company’s products are sold nationally in Canada by all major pharmacies, as well as natural health stores, grocery chain pharmacies and professional clinics. “Our distribution network is pervasive in Canada, and we look forward to replicating that success in the United States,” he points out.

As a result of a significant investment in sales and marketing in 2015, the company’s sales almost tripled, to $2.9-million.

In addition to expanding its line of OTC LivRelief products, Delivra is also positioning itself to out-license its technology to pharmaceutical and biotech companies for transdermal delivery of their drugs

In addition to expanding its line of OTC LivRelief products, Delivra is also positioning itself to out-license its technology to pharmaceutical and biotech companies for transdermal delivery of their drugs

“We have successfully developed and commercialized a revolutionary and proprietary technology for superior transdermal delivery of pharmaceuticals and natural molecules,” Mr. Schnarr notes.

He says three elements differentiate Delivra’s transdermal technology. “We have the ability to deliver larger molecules that are two-to-four times as large as traditional technologies; we can target deliver under the dermis layer of the skin for local conditions or into the bloodstream for systemic delivery; and we can also provide for a slow, controlled-release of active ingredients. These are the features that make our technology unique in the transdermal world.”

According to Mr. Schnarr, Delivra plans to relaunch two LivSport creams for pre- and post-workouts

According to Mr. Schnarr, Delivra plans to relaunch two LivSport creams for pre- and post-workouts

In addition to expanding its line of over-the-counter (OTC) LivRelief products, Delivra also is positioning itself to out-license its technology to pharmaceutical and biotech companies for transdermal delivery of their drugs.

“We think the business model is unique in our space as a combination of a steady and growing consumer healthcare business together with the significant upside of a biotech licensing play,” he points out. “It is a compelling thesis to be able to mitigate risk while maintaining upside.”

Forecasts put the global transdermal market at more than $40-billion by 2018, compared with just above $30-billion in 2015.

In terms of new product development, Mr. Schnarr says Delivra plans to launch the first natural topical sleep cream in North America this year and relaunch two LivSport creams for pre- and post-workouts.

“The sleep product is basically ready to go and the launch, which we hope will be later this year, is subject to Health Canada approval,” he adds. “We hope to build on the strength of our legacy products and expect high cross-pollination between pain and sleep with consumers.”

Delivra plans to launch the first natural topical sleep cream in North America this year

Delivra plans to launch the first natural topical sleep cream in North America this year

The North American OTC sleep aids market is valued at $700-million and Mr. Schnarr suggests that the market is trending from prescription medicines to OTC products. In addition, some 41% of consumers of sleep aids point to “natural” as the No. 1 factor in OTC purchases.

Another priority for Delivra this year is to out-license its transdermal technology to improve the efficacy and safety of existing drugs, repurpose existing drugs for new indications and facilitate the delivery of new drugs, such as peptide-based biologics.

For example, the company has repurposed doxycycline, a well-known 50-year-old antibiotic that is taken orally and by IV. “We’ve managed to stabilize the active molecule and provide strong penetration, to enable its use topically for the treatment of diabetic wounds, a globally pervasive issue,” he points out.

Large molecule-peptides are a significant segment of biopharmaceuticals these days. However, most are not suitable for oral administration because of their low bioavailability and rapid metabolism. As a result, these peptides are largely administered by injection.

“Our technology enables transdermal delivery of large molecules, so we have a compelling value proposition to share with Pharma companies as they bring new chemical entities to market,” Mr. Schnarr suggests.

In addition to antibiotics and peptides, he says Delivra has tested its transdermal technology on NSAIDs, such as ibuprofen, naproxen, diclofenac and acetaminophen; hormones, such as oxytocin; statins, such as Crestor and Lipitor; and other drugs for pain, metabolic disorders, diabetes, cardiovascular disorders and hypertension.

Regarding its intellectual property, Delivra has filed 10 provisional U.S. patents, with more to come. The patents relate to the composition and formulation process for novel transdermal delivery of active natural and drug ingredients, and layer application product patents on top of formulation process patents.

“We’re reaching out now to industry, and finding strong indications of interest,” Mr. Schnarr says. “These transactions take time, but given the very broad range of applications enabled by our platform technology, we believe there are deals to be done. We’re looking to get one done this year, and otherwise fill the funnel for 2017 and beyond.”

Transdermal market forecast  

Transdermal market forecast