Ann: SK-II Success and Forward Planning, page-136

Hi aussiemika,

I've had a look at Corium's financials in relation to the revenue received through its partners,and in particular P&G because like you I agree that some comparisons can be drawn. There are also a couple of notable variables such as a supply agreement rather than royalty fee schedule arrangement with P&G.

Corium's Corplex technology is incorporated into 4 variations of P&G's Crest Whitestrips which is ultimately believed to enable excellent adhesion properties to wet (and dry) surfaces. OBJ's technology capabilities also accommodate active ingredient compatibility with both hydrophilic and lipophilic molecules so there may be some value-add opportunities for P&G/OBJ to explore there? Interestingly, a large majority of complaints from consumer feedback relates to the poor adhesion quality of the strips, but that's not to suggest that Corium doesn't offer the best solution to P&G, rather just highlights a need for P&G/Corium to continue working on improving current offerings.

MonoSol is another one of P&G's external C+D partners that may be worth exploring, although the financial details are difficult to find. By 2017, there is absolutely no doubt in my mind that OBJ will be generating more revenue from its SK-II partnership than what Corium is currently receiving from Crest, however one of the important points that may be taken from Corium's financial reports is that its revenue earnings from P&G's Crest White Strips is right up there with its other two market leading pharmaceutical products. (1x OTC and 1x prescription)

While some people on the OBJ forum have argued that the large rewards received from top selling pharmaceutical products will far outweigh the opportunities with non-regulated consumer goods, this is where our market ignores the P&G global dominance factor. In fact if anyone looks at the YoY revenue growth reported by Corium it becomes pretty clear that Coriums earnings from Crest Whitestrips will totally eclipse anything received through its pharmaceutical partnerships during fiscal 2015 moving forward.

Corium revenue - FY2014
$11.7m - Crest Whitestrips
$13.6m - Clonidine TDS (#1 market share)
$13.0m - Fentanyl TDS