Benzinga | Mar 31, 2021 04:11PM EDT

Sonoma Pharmaceuticals And EMC Pharma Announce Exclusive Partnership To Expand Commercial Channels Of The Microcyn-Based Rx Dermatology And Eye Care Products Nationwide; Financial Details Not Disclosed

Sonoma Pharmaceuticals, Inc. (NASDAQ:SNOA), a global healthcare leader developing and producing stabilized hypochlorous acid (HOCl) products for a wide range of applications, including wound, eye, oral and nasal care, and dermatological conditions, today announced that it has entered into an agreement with EMC Pharma, LLC for the exclusive right to manage, market and distribute Sonoma's HOCl-based prescription dermatology and eye care products in the United States for an initial term of five years, subject to extension. EMC Pharma will also have a non-exclusive agreement to manage, market and distribute certain Microcyn-based wound care products into government channels.

EMC Pharma is a national healthcare industry products and service company specializing in the development of FDA-approved prescription products, distribution of pharmaceuticals, and specialty pharmacy services. EMC Pharma, LLC offers years of experience in product commercialization, trade relations, and supply chain management and has a broad network of industry partners in pharmaceutical manufacturing, pharmaceutical wholesale and distribution.

As part of the partnership agreement, EMC will acquire all of the existing inventory and pay a royalty and transfer prices over the initial five-year term. The parties agreed on certain minimum purchase requirements to maintain exclusivity of the distribution rights.

"We are pleased to enter into a partnership with Sonoma to acquire the exclusive rights to manage, market and distribute the Microcyn-based prescription product lines," said Eric Bailey, Chief Executive Officer of EMC Pharma. "Sonoma's dermatology and eye care products are a direct complement to our existing line of prescription products."

Amy Trombly, Chief Executive Officer of Sonoma added, "with this partnership we are expanding our distributor network to reach more patients and consumers nationwide. This partnership will also bring new opportunities to access government channels. We are excited to partner with a very successful company in EMC Pharma who already has an extensive distribution network and broad experience in the pharmaceutical business."

As a result of this transaction, Sonoma reduced its sales force dedicated to direct sales of prescription dermatology products in the United States. Sonoma's direct sales model for its dermatology products has not been profitable since its inception and management expects that partnering with EMC will allow Sonoma to reduce significant overhead while working with EMC to build a profitable model to distribute its prescription products. The partnership also expands the company's distributor model which has built profitable sales for the company around the world.