eSense-Lab achieves key milestones that validate commercialisation model for terpenes

eSense-Lab Ltd (ASX:ESE) continues to achieve strategic and operational milestones as it progresses a commercialisation strategy for evidence-based terpene product development for medicinal and wellness uses. Signed contracts and partnership agreements during the first half of 2020 have positioned the company to increase sales and revenue growth as it demonstrates the broad range of applications for its terpenes. Contracts and JVs In this period eSense has secured three agreements to supply its unique terpenes across multiple revenue-generating markets. An exclusive sales agency contract has also been executed targeting A$10 million of product sales in the lucrative US market over five years. eSense has signed joint venture agreements with initial orders anticipated to provide revenue of approximately A$950,000 to the company and it is working towards more large revenue joint-venture opportunities. Establishing joint ventures for mutual development of products with different partners allows the company to position itself across multiple revenue-generating markets. Post-COVID applications eSense CEO Itzik Mizrahi said: “We have worked hard to achieve a number of strategic and operational milestones over the last four months and are proud of the progress to date. "In addition to their therapeutic and wellness benefits, our terpenes have exciting possible applications in a post-COVID world and are focused on being well-positioned to service this growing market. "We are hard at work continuing to pursue more joint-venture opportunities and researching further potential applications of our technology.” Leveraging core technology The company has also made important changes to its leadership team and business strategy as it seeks to best leverage its core terpenes technology for revenue growth. Under this guidance eSense has signed agreements across a range of markets: SeaLaria (LOI) – Therepeutic skin creams and sanitiser; ANC – Skin care, hair care and hand sanitiser; Wise Wine – Hand and surface sanitisers; and Blue Science – Hand and surface sanitisers. This approach is favoured by eSense as it reduces the upfront capital expenditure required to expand global reach and significantly reduces costs associated with sales and distribution. Since inception of this strategy, the company has been able to leverage the distribution channels of its partners to gain access to four major global markets - Israel/Middle East, Australia, China and the US. Key Blue Science agreement A key agreement in the commercialisation strategy was signed this month through an exclusive Sales Agency Agreement with Blue Science Solutions Inc to expand into the world’s largest consumer market for terpenes-based products, the United States. Blue Science is an established US-based company that delivers non-toxic cleaning and disinfecting solutions across a variety of industries. Access to IBM network A crucial aspect of this new partnership for eSense is access to the IBM Rapid Supplier Connect Network. This network makes it possible for buyers and suppliers, including non-traditional suppliers joining the fight to help keep hospitals and key support organisations ready, to quickly find each other, accelerate verification and onboarding processes, and gain near real-time insights into inventories of life-saving equipment. Other benefits for eSense include: Access to Blue Science’s scientists to assist in product development; An exclusive agreement covering the distribution in the US of all terpenes-based products to be developed by the company in the cleaning and disinfecting solutions market segment; Local sourcing of ingredients and manufacturing; Access to an established supply chain network across the US; Agreed minimum sales targets of A$3 million in the first 12-months and A$10 million over a 5-year period, to be met in order for Blue Science to maintain exclusivity in the US; and Logistics expertise. Combined expertise Blue Science CEO Slade Smith said: “We came across e-Sense in our search for a partner to develop skin-friendly hand sanitiser solution. "By combining terpenes with our core active technology, hypochlorous acid, we hope to create a gentle, yet powerful hand sanitiser solution to add to our range. We are looking forward to the results of our combined expertise.” Ongoing research Another key part of eSense’s strategy for the future is continued research into the anti-viral qualities of terpenes. eSense’s lab continues researching and testing its proprietary terpene mix, TRP-ENV™, with promising results of terpenes’ anti-viral synergistic effects. Discussions are ongoing with several Israeli universities, hospitals and virology labs to establish further testing and research into the exact nature of terpenes’ anti-viral abilities. TRP-ENV™ is intended to be used for the creation of hand and surface sanitisers with enhanced anti-viral properties, together with a significant reduction in the sanitiser’s ethanol levels as ethanol can be an irritant to the skin. Further, eSense is investigating additional distribution and sales agreements with other partners to broaden its exposure within Australia and globally.