Dermacia invests in cosmeceuticals

Related tags Skin care products Marketing Cosmetics Cosmeceutical

Dermacia says it has raised $10 million since commencing private
funding and that Gemini Partnersa Los Angeles-based investment
banking group, has been engaged to explore additional opportunities
to finance Dermacia's rapid growth and new product initiatives in
cosmeceuticals, reports Simon Pitman.

The company has just launched a new line of cosmeceutical products designed for a mass worldwide market, focusing on its Lycogel line of camouflage makeup designed for post-surgery, post-treatment and dermatological conditions.

Cosmeceutical are a rapidly growing market in the US, where the demand for cosmetics and skin care products that are formulated to provide therapeutic benefits and active ingredients to the user is rapidly growing.

Valued at $710 million in the US, the cosmeceuticals market is still relatively small compared to the estimated $200 billion plus spent on cosmetic each year on a global basis. But considering that growth has come from virtually nothing at the beginning of the millennium, it is quite a significant achievement.

Perhaps an indication of things to come can be gauged by looking at the Japanese market for cosmeceuticals. Despite having a population that is approximately half that of the US, the value of the market there is estimated to be $1.2 billion.

With Japanese consumers largely considered to be more advanced in their consumer habits, the indications are that the market in the US could grow proportionally - potential growth many companies such as Dermacia are hoping to tap into.

Matt Nicosia, Dermacia's chief executive officer and co-founder, said, "Dermacia's success in this initial round of private funding is a validation of our business model by accredited investors. We are taking the next step with Gemini to evaluate and meet our capital needs in view of our rapid sales growth and aggressive marketing and product initiatives, including research and development of nanotechnology and genetic science applications in cosmetics and skin care."

Gemini Partners' Principal Nathan Johnson added that he could see significant opportunity for the company to expand, given the current market conditions.

Dermacia has recently started marketing its products over the Internet, extending its range into the mass market for cosmeceuticals. Last week the company announced the expansion of its Lycogel product line to include a comparable cosmeceutical line launched under the name Firmaire.

The range is said to address the estimated 50 million people who cannot use traditional cosmetics due to sensitive skin conditions, including rosacea, acne, psoriasis, and eczema.

The company says it has identified a major market opportunity for cosmetics and skin care products combining more color and coverage to that of traditional makeup brands. Until now Lycogel has been available in the US exclusively through physicians.

Dermacia​, which was established in 2000, combines biotechnology, cosmeceuticals, cosmetics and nanotechnology as the technology hub for skin care products marketed under the Lycogel and, now, the Firmaire names.

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