Quantec signs Mexican distribution deal for anti-acne cream derived from cow's milk

Startup biotech company Quantec Ltd has signed a Mexican distribution partner agreement to launch its anti-acne cream, the only treatment globally with a patented ingredient derived from cow's milk.

The Hamilton-based company launched the Epiology brand of anti-acne cream in New Zealand pharmacies in May and claims to have already gained a 10 percent share of the market. The anti-acne cream is now stocked in 60 percent of New Zealand pharmacies, double what it expected at this stage, and that has given the company confidence to start exporting through a distribution deal with Fenrir Business Development SA de CV (FBD).

Quantec has been developing the milk protein called IDP, which is used by cows to fight infection, for the past seven years. It has had several tranches of angel investment funds from private investors including dairy industry veteran Earl Rattray and Soda Inc's Neil Richardson and the NZ Venture Investment Fund.

Founder and managing director Rod Claycomb said Mexico was an attractive market for two reasons. Like New Zealand, Mexico is one of the few countries that allows acne medication claims to be made which helps promote the brand to consumers rather than relying on prescriptions. It is also a large market with a wide variety of skin types which is important when proving how well a product works.

"With the help of FBD, Epiology will first be launched into Guadalajara, Mexico - Mexico's second largest city with a population of over four million. We're initially launching the cream through a specialist channel by working with around 25 of the city's top dermatologists," he said.

FBD general manager Fernando Alvarez said acne product category sales in Mexico total around $83 million and studies have shown around 44 percent of Mexicans with acne contact a dermatologist. Claycomb said around 20 percent of sales are through dermatologists and by early next year the product will have been launched to dermatologists in five of Mexico's largest cities and eventually in pharmacies.

"Following our own clinical studies which we performed in the US in 2012, we are confident the dermatologists will see similar positive results whereby they will have confidence to recommend the product to customers with acne issues," he said.

The value of the distribution deal hasn't been disclosed.

In June the company said it was considering launching the product in the Latin American market and was also eyeing the Asian market after shipping the product to Taiwan and Hong Kong. Claycomb said the plan now was to consider expanding exports to the US, Europe and China in 2016/17, providing it goes well in Mexico.

The same patented milk protein has also been used for use in oral-care and throat-care confectionery products made in NZ and exported to China.