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Obagi Medical Products Expands Partnership with Japan-Based Rohto Pharmaceutical Co., Ltd.

^{Published on 2008-12-16 09:47:51 - Market Wire}
 

LONG BEACH, Calif.--([ BUSINESS WIRE ])--Obagi Medical Products, Inc. (Nasdaq: OMPI), a leader in topical aesthetic and therapeutic skin health systems, today announced an expansion of its relationship to Rohto Pharmaceutical Co., Ltd., (TYO:4527) a leading brand manufacturer of over-the-counter products, and Obagi's leading marketing and distribution partner, in Japan. Together, the Companies will launch a series of products with ELASTIderm™'s technology into consumer sales and distribution channels in Japan, including premium retail distribution channels, as well as jointly develop other scientifically based skin care products for the Japanese market.

Licensing Agreement for ELASTIderm in Japan

Under the terms of the licensing agreement, Rohto will manufacture and sell ELASTIderm™'s technology-based products into as many as 5,000 drug and variety stores under the Obagi brand. Under an existing agreement, Rohto manufactures and distributes Obagi-branded Vitamin C, Platinum and Triple Peel products. The decision to introduce ELASTIderm in Japan is the result of Rohto's appreciation for the scientifically based technology that Obagi has developed that shows improved efficacy and patient satisfaction in numerous clinical trials. Also of significance will be Rohto's expansion into the premium high-end department store channel, where Obagi-branded skin care products will be well-positioned to compete with other globally recognized brand names in skin care. The department store market for cosmeceuticals and skin care lines in Japan is approximately $1.2 billion, based on data from Datamonitor.

Steve Carlson, President and CEO of Obagi Medical Products, stated, "We are very excited about expanding our relationship with Rohto. Rohto's position as a market leader in the over-the-counter variety and drug store markets, and their expansion into the department store and other premium distribution channels in Japan will help us grow market share and revenue. The initial introduction of ELASTIderm, which is clinically proven to show an improvement in elastin production, will help us begin to achieve these goals."

Collaboration to Develop Additional Products

In a related development, Obagi and Rohto have formed a collaborative effort to develop future science-based skin care solutions that Rohto will have the exclusive right to distribute in premium retail outlets in Japan.

"Importantly, with respect to our joint development of new products, Rohto has an impressive research facility in Kyoto that employs more than 100 scientists, many of whom will be dedicated to working with us to jointly develop additional Obagi products," said Carlson.

Kunio Yamada, President and CEO of Rohto Pharmaceutical Co., Ltd. commented, "The Obagi brand has been very important to us within our product portfolio for the last several years and is viewed as a premium valued brand in the Japanese marketplace. We believe that our marketing strength along with Obagi's science-based product development expertise will uniquely position us to capture market share and develop premium sales channels in this highly competitive environment. I appreciate the trust and confidence that Obagi has placed in us and we look forward to working with the Obagi organization in developing the next generation of scientifically based skin care products, including the ELASTIderm product line, for the Japanese marketplace."

About Obagi Medical Products, Inc.

Obagi Medical Products develops and commercializes skin health products for the dermatology, plastic surgery, and related aesthetic markets. Using its Penetrating Therapeutic™ technologies, Obagi Medical's products are designed to improve penetration of agents across the skin barrier for common and visible skin conditions in adult skin including chloasma, melasma, senile lentigines, acne vulgaris and sun damage. The history of Obagi's skin care product introductions is as follows: Obagi Nu-Derm®, 1988; Obagi-C® Rx (the first and only prescription-strength vitamin C and hydroquinone system), 2004; Obagi® Professional-C (a line of highly stable vitamin C serums), 2005; Obagi® Condition and Enhance for use with cosmetic procedures to enhance patient outcomes and satisfaction, 2006; Obagi ELASTIderm™ eye treatment and Obagi CLENZIderm® M.D. acne therapeutic systems, 2007; a formulation of Obagi CLENZIderm® M.D. Systems for normal to dry skin, June 2007; Obagi ELASTIderm™ Décolletage System, January 2008 and SoluCLENZ™ Rx Gel for the pharmacy channel in August 2008. Visit [ www.obagi.com ] for information.

About Rohto Pharmaceutical Co., Ltd.

Rohto Pharmaceutical Co., Ltd., based in Japan, is a leading manufacturer of over-the-counter products, including eye care, skin care and lip products that rank among the leading brands in each category. Some of the products offered by the company include Obagi Vitamin C, Platinum and Triple Peel skin care products, dermal medicines including Mentholatum hand, body and lip treatments for dry skin, sunscreen, deodorant and acne care products, HADA (SKIN) LABO Resilient Skin, Face Lift Cream; OXY men's skincare, and Sebamed UV Protect Cream. In 1988, Rohto acquired The Mentholatum Company. Rohto's corporate sales revenue in the latest fiscal year exceeded US $1 billion.

Forward-Looking Statements

There are forward-looking statements contained herein, which can be identified by the use of forward-looking terminology such as the words "believes," "expects," "may," "will," "should," "potential," "anticipates," "plans," or "intends" and similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause actual results, events or developments to be materially different from the future results, events or developments indicated in such forward-looking statements. Such factors include, but are not limited to the possibility that the development plans with Rohto will not yield the anticipated revenues or market acceptance, the intense competition our products face and will face in the future, the level of market acceptance of our products, the possibility that our products could be rendered obsolete by technological or medical advances, the possibility that we may become involved in intellectual property claims and litigation that could adversely affect the profitability of or our ability to sell our products, the possibility that our products may cause undesirable side effects and the fact that our ability to commercially distribute our products may be significantly harmed if the regulatory environment governing our products changes. A more detailed discussion of these and other factors that could affect results is contained in our filings with the U.S. Securities and Exchange Commission, including our Form 10-K for the year ended December 31, 2007. These factors should be considered carefully and readers are cautioned not to place undue reliance on such forward-looking statements. No assurance can be given that the future results covered by the forward-looking statements will be achieved. All information in this press release is as of the date of this press release and Obagi Medical Products does not intend to update this information.