The Los Angeles-based company had hit a rough patch financially early last year that included a management switch, said marketing manager Marcus Charuvastra. But the deal announced recently with Healthy Focus Limited, a Hong Kong-based company, will bring in significant revenue.
The agreement grants Healthy Focus an exclusive three-year renewable license for the marketing and sale of Targeted Medical Pharma’s Theramine, Percura and Trepadone medical foods in Hong Kong and China. Under the terms of the agreement, Healthy Focus is responsible for registering all products in China, an initial licensing fee, as well as maintaining annual minimum purchase orders of $500,000 for the first two years, and $1 million in the third year.
“We are excited to partner with Healthy Focus Limited to introduce our products to the Chinese market,” said Kim Giffoni, Chief Executive Officer at Targeted Medical Pharma. “The execution of this agreement represents a significant expansion of international sales of our proprietary line of health products, and positions us for sustainable growth over the next three years.”
Product registrations are a tricky aspect of entering the Chinese market, something that Healthy Focus will handle, Charuvastra said. A recent change in regulations makes marketing the company’s products easier there, he said.
“In China they expanded their ‘foods for special dietary use’ division of the regulations. We are going to be marketed as a protein-based food,” he said.
Patented amino acid technology
The company markets Theramine and Trepadone for pain management, and Percura for peripheral neuropathy. All three are said to be meant to deal with the “dietary management of the altered metabolic processes associated with pain syndromes.”
Targeted Medical Pharma’s technology is based on a patented formulation that the company says allows reduced concentrations of amino acids and other ingredients in the milligram range to stimulate the production of neurotransmitters to treat the nutritional deficiencies associated with certain diseases and conditions.
“All of our products are based on this patented technology,” Charuvastra said. A line of planned dietary supplements has been shelved.
Charuvastra said that the company is optimistic that a “made in USA” halo will boost sales of the products in the Chinese market, and especially so since they are medical foods, not supplements.
“Part of the appeal for American-made products in that market is a reputation for a quality, consistency and purity that is reliable. That’s especially true coming from the medical foods category where we are held to a higher standard of manufacturing,” he said.