About Sonoma Pharmaceuticals

Sonoma Pharmaceuticals, Inc. engages in developing and producing stabilized hypochlorous acid (HOCl) products worldwide. The company offers its products for a range of applications, including wound care, animal health care, eye care, oral care and dermatological conditions. Its products reduce infections, itch, pain, scarring and harmful inflammatory responses. In-vitro and clinical studies of HOCl show it to have antipruritic, antimicrobial, antiviral and anti-inflammatory properties. The company’s stabilized HOCl relieves itch and pain, kills pathogens and breaks down biofilm, does not sting or irritate skin and oxygenates the cells in the area treated assisting the body in its natural healing process. Business Channels The company sells its products into various markets both in the U.S. and internationally. In international markets, it ships products to 54 countries. In various cases, it markets and sells its own products. Dermatology The company has developed dermatologic products that support paths to healing among various key dermatologic conditions. Its products are primarily targeted at the treatment of acne, the management of scars and atopic dermatitis. The company strategically focuses on introducing products that are supported by human clinical data with applications that address specific dermatological procedures in demand. In the United States, the company partnered with EMC Pharma, LLC (EMC Pharma) to sell its prescription products for an initial term of five years, subject to meeting minimum purchase and other requirements. Pursuant to its agreement with EMC Pharma, the company manufactures products for EMC Pharma; and EMC Pharma markets, sells and distributes them to patients and customers. The company sells dermatology products in Europe, Asia, and Brazil through a distributor network. In these international markets, it has a network of partners, ranging from country specific distributors to large pharmaceutical companies to full-service sales and marketing companies. The company works with its international partners to create products they could market in their home country. Some products it develops and manufactures are private label, while others use branding it has already developed. The company has created or co-developed a range of products for international markets using its core HOCl technology. First Aid and Wound Care In the United States, the company sells its wound care products directly to hospitals, physicians, nurses, and other healthcare practitioners. In March 2021, it granted EMC Pharma the non-exclusive right to sell wound care products to certain governmental entities. To respond to market demand for the company’s HOCl technology-based products, it launched its first direct to consumer over the counter product in the United States in February 2021. Microcyn OTC Wound and Skin Cleanser is formulated for home use without prescription to help manage and cleanse wounds, minor cuts, and burns, including sunburns and other skin irritations. Microcyn OTC Wound and Skin Cleanser is available without prescription through the company’s online store. It is also available as a prescription product through physicians. In Europe, the company relies on agreements with country-specific distributors for the sale of its wound care products under various brand names into 27 countries, including Austria, Belgium, Croatia, Italy, the Netherlands, Germany, Greece, Hungary, the Czech Republic, Spain, Norway, Switzerland, Poland, Portugal, Slovenia, the Slovak Republic, Finland, Denmark, Montenegro and Serbia. In March 2021, the company received approval to market and use its HOCl products as biocides under Article 95 of the European Biocidal Products Regulation in France, Germany and Portugal. The approval applies to the company’s products MucoClyns for human hygiene to be marketed and commercialized by it, MicrocynAH for animal heath marketed and commercialized through its partner (Petagon Limited), and Microsafe for disinfectant use to be marketed and commercialized through its partner, Microsafe Group DMCC, Dubai. The company’s HOCL-based wound care products are intended for the treatment of acute and chronic wounds, as well as first-and second-degree burns. Their primary mode of action involves the mechanical removal of cellular debris, senescent cells, necrotic tissue, and foreign material from the skin and wound surface using a moistened dressing along with irrigation. Removal of these materials through these actions is known to decrease infection rates and improve wound healing. The secondary mode of action is a function of the antimicrobial properties of HOCl and its salt, hypochlorite. These ancillary medicinal substances, which are present in very low, non-toxic amounts, assist in the removal of microorganisms. Oral, Nasal and Eye Care The company’s product Acuicyn is an antimicrobial prescription solution for the treatment of blepharitis and the daily hygiene of eyelids and lashes and helps manage red, itchy, crusty and inflamed eyes. In the United States, the company’s partner EMC Pharma is selling its prescription-based eye care product through its distribution network. In May 2020, the company entered into a new license and distribution agreement with its existing partner, Brill International S.L. (Brill) for its Microdacyn60 Eye Care HOCl-based product. Under the new license and distribution agreement, Brill has the right to market and distribute its eye care product under the private label Ocudox in Italy, Germany, Spain, Portugal, France, and the United Kingdom for a period of 10 years, subject to meeting annual minimum sales quantities. In return, Brill will pay the company a one-time fee, and the agreed upon supply prices. Previously, under the old license and distribution agreement dated August 1, 2018, Brill marketed the company’s eye care product in Spain and Portugal. In parts of Asia, Dyamed Biotech markets the company’s eye product under the private label Ocucyn. In the United States, in December 2020, the company partnered with Gabriel Science, LLC to market its HOCl-based products in the dental, head and neck markets and launched Endocyn, a biocompatible root canal irrigant. Internationally, the company’s product Microdacyn60 Oral Care treats mouth and throat infections and thrush. Microdacyn60 solution assists in reducing inflammation, pain, soothing cough relief and does not contain any harmful chemicals. In New Zealand and Australia, the company’s partner Te Arai BioFarma Ltd. (Te Arai) markets its oral product under their label Oracyn Oral Care. The company’s international nasal care product, Sinudox, based on its HOCl technology, is a solution intended for nasal irrigation. Sinudox Hypotonic Nasal Hygiene clears and cleans a blocked nose, stuffy nose and sinuses by ancillary ingredients that might have a local antimicrobial effect. Sinudox is sold through Amazon in Europe. In New Zealand and Australia, the company’s partner, Te Arai, markets its nasal product under their label Nasocyn Nasal Care. Animal Health Care MicrocynAH is a HOCl-based topical product that cleans, debrides and treats a spectrum of animal wounds and infections. It is intended for the treatment of various animal afflictions, including cuts, burns, lacerations, rashes, hot spots, rain rot, post-surgical sites, pink eye symptoms and wounds to the outer ear of any animal. For the company’s animal health products sold in the U.S. and Canada, it partnered with Manna Pro Products, LLC (Manna Pro) to bring relief to pets and peace of mind to their owners. Manna Pro distributes non-prescription products to national pet-store retail chains, farm animal specialty stores, in the United States and Canada, such as Chewy.com, PetSmart and Tractor Supply. The company expanded its animal health product offerings by adding a MicrocynAH line for felines at PetSmart. For the Asian and European markets, in May 2019, the company partnered with Petagon Limited (Petagon), an international importer and distributor of pet food and products for an initial term of five years. It supplies Petagon with various MicrocynAH products sold by Petagon. In August 2020, Petagon received a license from the People’s Republic of China for the import of veterinary drug products manufactured by the company. Surface Disinfectants In-vitro and clinical studies of HOCl show it to have impressive antipruritic, antimicrobial, antiviral and anti-inflammatory properties. HOCl has been formulated as a disinfectant and sanitizer solution for the company’s partner Microsafe Group DMCC, Dubai, and is sold in various countries. It is designed to be used to spray in aerosol format, to areas and environments, which are suspected to serve as a breeding ground for the spread of infectious disease, likely to result in epidemics or pandemics. The medical-grade surface disinfectant solution is used in hospitals worldwide to keep doctors and patients protected and safe. In May 2020, Nanocyn Disinfectant & Sanitizer received approval to be entered into the Australian Register of Therapeutic Goods, as well as in Canada, for use against the coronavirus SARS-CoV-2. Nanocyn has also met the environmental health and social/ethical criteria of Good Environmental Choice Australia, becoming an eco-certified disinfectant solution in Australia. The company, through its partner Microsafe Group DMCC, Dubai, sells hard surface disinfectant products into Europe, the Middle East and Australia. In July 2020, the company partnered with Microsafe Group DMCC, Dubai to seek regulatory approval in the United States to sell hard surface disinfectants in the United States. As of March 31, 2021, the company had not received such regulatory approval. Products Below are some of the company’s key products that it either sells through its own efforts or through partnership agreements. Dermatology In the United States, the company’s prescription product offerings are Epicyn Antimicrobial Facial Cleanser, Levicyn Antimicrobial Dermal Spray, Levicyn Antipruritic Gel, Levicyn Antipruritic Spray Gel, Celacyn Scar Management Gel and Sebuderm Topical Gel. It also has its office dispense products Lasercyn Dermal Spray, Lasercyn Post Procedure Gel and Regenacyn Advanced Scar Management. Internationally, the company offers GramaDerm Hydrogel and Solution Combo Pack to assist in the treatment of topical mild to moderate acne, Epicyn Scar Management Hydrogel and Pediacyn Atopic Dermatitis Hydrogel. Celacyn Scar Management Gel Celacyn offers scar management by protecting and moisturizing wound and scar sites to promote lighter, flatter, less prominent scarring. Celacyn, is a HOCl-based topical prescription product indicated to promote healing through the management of new and old scars resulting from surgical procedures and trauma wounds or burns. Epicyn relieves the common symptoms of irritated skin and dermal lesions. Epicyn Antimicrobial Facial cleanser is intended for the cleansing, irrigation, moistening, debridement and removal of foreign material and debris from acute and chronic dermal lesions. Levicyn Antipruritic Dermal Spray, Antipruritic Spray Gel, and Antipruritic Gel Levicyn offers itch relief. Levicyn is a HOCl-based topical prescription product indicated to manage and relieve the burning, itching and pain experienced with various types of dermatoses. Lasercyn Lasercyn Post Procedure Gel is intended for the management of post non ablative laser therapy procedures, post microdermabrasion therapy and following superficial chemical peels. Lasercyn Procedure Gel might also be used to relieve itch and pain from minor skin irritations, lacerations, abrasions and minor burns. Wound Care In the United States, the company offers Microcyn wound and skin care both as an over the counter (OTC) and prescription product. Microcyn Wound Care Management Microcyn offers enhanced healing properties. Microcyn is a HOCl-based topical line of products designed to stimulate expedited healing by targeting a range of pathogens, including viruses, fungi, spores and bacteria, including antibiotic-resistant strains that slow the natural healing of wounds. Eye, Nasal and Oral Care Acuicyn Eyelid and Eyelash Hygiene Acuicyn offers eyelid and eyelash hygiene. Acuicyn is a HOCl-based topical prescription product indicated to relieve itch and inflammation, while helping to keep areas around the eye clean. Ocudox is substantially the same eye care product marketed by Brill in Europe. Microdacyn60 Oral Care Microdacyn60 Oral Care with patented technology supports the treatment of mouth and throat infections, and the debridement and moistening of mouth lesions and thrush. This adjuvant solution assists in reducing inflammation, pain, soothing cough relief. It does not stain teeth, is non-irritating, non-sensitizing, has no contraindications and is ready for use with no mixing or dilution. Animal Health Care In the United States and internationally, the company’s HOCl-based MicrocynAH line offers topical solutions designed to relieve the common symptoms of hot spots, scratches, skin rashes post-surgical sites and irritated animal skin and promote expedited healing for all animals. Surface Disinfectants The company, through its partner, Microsafe DMCC, Dubai, sells Microsafe. Microsafe is indicated to sterilize hard surfaces by spraying directly onto the surface, for medical devices by submerging the device in MicroSafe, and also for fumigation into the air. When fumigated, MicroSafe has demonstrated the ability to kill a range of airborne pathogens and reduce the spread of infectious disease. Strategy The company’s strategy is to work with partners both in the United States and internationally to market and distribute its products. Customers In the U.S., the company’s key customers are EMC Pharma, LLC with which it partnered in March 2021 to sell its prescription dermatology and eye care products and MannaPro, its partner for its animal health care products. Its wound care products are purchased by hospitals, physicians, nurses, and other healthcare practitioners directly from it. Intellectual Property As of June 30, 2021, the company owned a total of 61 issued patents, including 16 issued U.S. patents and 45 issued foreign patents. All patent applications, as well as issued patents are directed at its HOCl technology. The issued U.S. and foreign patents expire in 2022-2029. In addition to the company’s patents and applications, there is licensed technology developed in Japan relating to an electrolyzed water solution, methods of manufacture and electrolytic cell designs. This license includes three issued Japanese patents. The company has also filed for trademark protection for marks used with products in various regions, such as the United States, Europe, Canada, certain countries in Central and South America (including Mexico and Brazil), certain countries in the Middle East, and certain countries in Asia, including Japan, China, Hong Kong, the Republic of Korea, India and Australia. Research and Development For the year ended March 31, 2021, the company’s research and development expense amounted to $555,000. Regulation The company’s Mexican facilities are certified and comply with the U.S. Current Good Manufacturing Practices, Quality Systems Regulations for medical devices, and International Organization for Standardization (ISO) guidelines. Its Mexican facility has been approved by the Ministry of Health and is also ISO 13485 certified. Its machines are tested regularly, which is part of a validation protocol mandated by the U.S., Mexican and international Current Good Manufacturing Practices, Quality Systems Regulation, and ISO requirements. As of March 31, 2021, the company had obtained 21 U.S. Food and Drug Administration clearances permitting the sale of products as medical devices for Section 510(k) of the Federal Food, Drug and Cosmetic Act in the United States. Outside the United States, the company sells products for dermatological and advanced tissue care with a European Conformity marking, Conformité Européenne (CE). In April 2020, the company received an updated EC certificate covering 39 products in 54 countries with various approvals in Brazil, China, Southeast Asia, South Korea, India, Australia, New Zealand, and the Middle East. In the United States, the company is subject to various federal and state laws pertaining to healthcare fraud and abuse, which among other things, prohibit the offer or acceptance of remuneration intended to induce or in exchange for the purchase of products or services reimbursed under a federal healthcare program and the submission of false or fraudulent claims with the government. These laws include the federal Anti-Kickback Statute, the False Claims Act and comparable state laws. To sell medical device products within the European Union, the company is required to comply with the requirements of the Medical Devices Directive, and its national implementations, including affixing CE markings on products. Under the General Health Law, a business that manufactures drugs is either required to obtain a ‘Sanitary Authorization’ or to file an ‘Operating Notice’. The company’s Mexican subsidiary, Oculus Technologies of Mexico, S.A. de C.V., is considered a business that manufactures medical devices and therefore is not subject to a Sanitary Authorization, but rather only required to file an Operating Notice. In addition to its Operating Notice, the company’s Mexico subsidiary has obtained a ‘Good Processing Practices Certificate’ issued by Mexican Federal Commission for the Protection against Sanitary Risks, which demonstrates that the manufacturing at its facility located in Zapopan, Mexico, operates in accordance with the applicable official standards. History The company was incorporated under the laws of the state of California in 1999. It was formerly known as Micromed Laboratories, Inc. and changed its name to Oculus Innovative Sciences, Inc. in 2001. In 2006, the company was reincorporated under the laws of the state of Delaware. Further, the company changed its name to Sonoma Pharmaceuticals, Inc. in 2016.