Special Report: Life sciences company eSense has struck up a joint venture in Australia to make a range of skin and hair care products.

eSense-Lab (ASX:ESE) has entered into a binding joint venture with ANC Enterprises, a manufacturer and wholesaler of high-quality, Australian-made cosmeceutical products.

ANC will formulate and manufacture a range of skin care, hair care and hand sanitiser products, for which eSense will provide specific terpenes uniquely developed for each category.

“ANC seemed like an obvious partner for eSense to further diversify its product offering. Its passion for natural, ethically made products aligns with our company’s ethos and goals,” said Itzik Mizrahi, CEO of eSense.

“The joint venture agreement validates eSense’s updated commercialisation model as well as the growing recognition of terpenes and their unique and varied qualities in more markets.

“This agreement will see eSense’s terpenes used in a premium Australian-made product to be delivered straight to consumers.”

The arrangement will see the joint venture company make a minimum initial order of 500,000 units of terpenes for hand sanitiser, 100,000 units of terpenes for skin care, and 100,000 units of terpenes for hair care.

The orders are based on the anticipated initial production run for products to be undertaken, but eSense anticipates that the payment terms will see $100,000 upfront and the remainder upon sales occurring.

The joint venture will be owned 95 per cent by eSense and 5 per cent by ANC, based on an initial cash contribution of $95,000 by eSense and $5,000 by ANC.

ANC shall have a 12-month option to increase its holding to 50 per cent through an additional capital contribution, with a fee of $90,000 after one month and increasing by $10,000 each calendar month; if ANC exercises its option after six months, it will pay $140,000. eSense will supply terpenes for an initial 10-year term.


The ‘virtual plant’

eSense, using cutting edge technology, has built a perfect “virtual plant” based on the cannabis plant. From that it’s reverse engineered components from other plant sources.

This produced a scientifically and practically identical terpene profile of a given cannabis strain, with no psychoactive ingredients, and with lower production costs.

Terpenes are compounds that give plants their fragrance, flavour, and even some natural health and wellbeing properties.

The latter property has opened a new field to eSense. Past research suggests certain terpenes are suitable for treating disease, and company screening has selected the best ones to be formulated into unique natural profiles.

eSense has developed a series of cell-based models which mimic indications such as inflammation, oxidative stress, neurodegeneration, wound healing and bacterial growth.

Some terpenes even have an anti-viral effect, and eSense has jumped on these to deliver premium hand sanitiser products.

It is in final stages of peer reviewed lab testing for its TRP-ENVTM compound against viruses in general and COVID19 specifically, and in parallel has teamed with several manufacturers of both ethanol-based and non-alcohol sanitizers, to cooperate on bringing a new sanitiser product to the market.


Strong Aussie partner

ANC has over 10 years of operating history and significant experience in manufacturing products for skincare, sports and nutritional supplements, infant milk powders, bath salts, essential oils and pharmaceuticals.

Its wholly owned, 600 square-metre GMP certified facility is capable of producing 16,000 – 20,000 bottles from two 8-hour shifts per day, leading to 5 million bottles produced annually.

ANC currently manufactures natural plant focussed products including New Age Botanicals, a skin-care brand which contains no artificial colours or ingredients. The range includes regenerating creams, nourishing creams, face masks and vitamin C creams.

ANC has invested heavily in innovative equipment and continues to make improvements to their processes so as to minimise waste and efficiently deliver more output. ANC’s bottling processes generate only 1 per cent of waste, compared to the industry average of up to 10 per cent.

“The addition of eSense’s terpenes allows us to manufacture products with an added layer of potential therapeutic benefits. We are excited to have access to eSense’s terpene technology which will broaden and enhance the products we can make,” said Alex Blagojevic, CEO of ANC.


The wide world of health

eSense’s R&D team is helping the company to expand its commercial horizons, such as into anti-viral products like hand sanitiser, set to compete with other products that are either harsh on the skin (such as ethanol) or bacterial-only.

But it is also tapping into the cannabidiol (CBD) industry, a booming market for medicinal, wellness and nutritional products.

Through joint ventures with existing manufacturers, as well as eSense’s own brand, the company will offer products based on Terpene-Infused CBD Isolate that offer a spectrum of healthcare and wellness benefits in markets where THC is banned or regulated, and for consumers who demand 0 per cent-THC products.

CBD is well known, and used, for its benefits in pain relief, anti-inflammatory, sedative and rejuvenating traits.

But CBD isolate, which is devoid of THC, can also remove some of the medicinal attributes. Infusing the right mix of terpenes back into mixture can bring back many of these medicinal attributes, through what is known as the ‘entourage effect’.

eSense plans to formulate evidence-based compounds to cater to specific consumer needs, such as pain relief, relaxation, energizing, and anti-aging. On the healthcare front, eSense is researching into evidence-based uses of terpenes in pharmaceutical drugs, with preliminary research starting in areas such as cancer, COPD, neurodegeneration, fibrosis, microbiome, and bone rehabilitation.

This story was developed in collaboration with eSense, a Stockhead advertiser at the time of publishing.
This story does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.