Corrections or additions?
Neostrata: More than Hope
This article by Elaine Strauss was published in U.S. 1 Newspaper on
February 24, 1999. All rights reserved.
by Elaine Strauss
Cleopatra would have been quite at home with today’s
leaders in the field of skin care. By luxuriating in milk baths, she
was exposing her skin to lactic acid, an alpha hydroxy acid that wipes
out the fine lines and wrinkles caused by overexposure to the sun
or by aging. Alpha hydroxy acids occur in citrus fruits and sugar
cane, tomato juice, apples and wine, as well as in milk. They can
help the skin shed its outer layer, the stratum corneum, where wrinkles
Princeton’s NeoStrata, a privately-held research-based company founded
in 1988, has started bringing carefully calibrated forms of Cleopatra’s
favorite beauty treatment to consumers during the past year under
the brand name "Exuviance." Nordstrom’s is a recent partner
in their enterprise.
Unlike the royal princess, NeoStrata approached skin care via research
studies involving pathologically dry skin. Interviewed at the company’s
headquarters on Research Way in the Forrestal Center, Richard Wildnauer,
NeoStrata’s president since 1995, notes the scientific basis underlying
his company’s cosmetic products. "We’ve gone beyond Charles Revson,"
he says, referring to Revlon’s founder, whom he quotes as summarizing
the cosmetic industry by observing, "All you’re selling is hope
in a jar."
NeoStrata’s founders, dermatologist Eugene Van Scott and dermatopharmacologist
Ruey Yu, met at Temple University in 1968. Their first joint publication,
in 1974, reported the effectiveness of alpha hydroxy acids to treat
ichthyosis, a genetic skin condition.
Van Scott and Yu’s collaboration was dramatic, scientifically, on
several counts: First, it resulted in an effective treatment for a
relatively intractable, unsightly skin condition. Second, it led them
to understand how alpha hydroxy acids affect skin, in general. Third,
it resulted in their recognizing, as alpha hydroxy acids, a number
of organic acids whose previous names did not reveal their common
structural features. And, fourth, they invented the abbreviation "AHA"
for alpha hydroxy acid. Entrepreneurs, as well as scientists, Van
Scott and Yu formed a company to commercialize their discoveries.
Founded in Branford, Connecticut in 1988, 14 years after their initial
publication, the company they named Polystrata grew into today’s NeoStrata.
Ichthyosis, the extreme dry skin condition that the
doctors studied at Temple, molds the lives of those who suffer from
it. In severe cases, it results in the formation of flakes on the
skin so thick that people with the ailment have been displayed in
circuses as "alligator" people. The genetic abnormality can
cover the skin of the face so thoroughly that its victim can barely
see out past the plastic-like encrustations on the face. "Ichthyosis
is not life-threatening, but it’s definitely life-altering," Wildnauer
says. "People with severe ichthyosis live as recluses."
When Van Scott and Yu began their work on ichthyosis the standard
treatment was first, to apply glycolic acid, the simplest of the alpha
hydroxy acids, then to soak in the bathtub for hours, and, finally,
to tear off the outer layer of skin, Wildnauer says. In discovering
the efficacy of AHAs as a treatment for ichthyosis, he adds, "Van
Scott and Yu came up with a remarkable finding. It seemed too simple.
Not that much was understood about specific products for particular
problems. It took a number of years to convince the dermatologic community
and industry. The term `alpha hydroxy acids’ had never been used in
dermatological circles. The doctors taught the dermatological community
a little bit of chemistry."
Exploring the possible applications of alpha hydroxy acids beyond
ichthyosis, Van Scott and Yu learned that AHAs could be used to treat
other dry skin problems, to treat acne, and to minimize the fine lines
and wrinkles that come from skin damage due to sun or to aging.
Now the heads of an independent research enterprise in Ambler, Pennsylvania,
Van Scott and Yu remain members of the NeoStrata board and their portraits
hang in the NeoStrata boardroom. Wildnauer and others at NeoStrata
refer to them with a combination of affection and reverence as "the
In 1992 PolyStrata moved to 4 Research Way. "The doctors loved
the street name," Wildnauer says, "and they liked Princeton’s
research and academic focus. They thought that Princeton was a good
environment for marketing their treatment."
"PolyStrata is inactive at this point," Wildnauer says, explaining
the trio of legal entities in the privately-held NeoStrata family.
"TriStrata Technologies, a subsidiary of NeoStrata, holds all
the intellectual property. It issues licenses and collects royalties
and is located in Wilmington, Delaware, where there’s a more favorable
tax and patent enforcement environment. NeoStrata is the operating
company. It develops technologies and quality assurance. It takes
care of marketing and sales, and coordinates manufacturing." At
present NeoStrata licenses to Allergan, Avon, Bristol-Myers Squibb,
Chesebrough-Ponds, Collagen Corp., Elizabeth Arden, Erno Lazlo, Stiefel,
NeoStrata’s more than 40 products are backed by legal muscle in the
form of more than 80 patents, and legal judgments upholding NeoStrata’s
exclusive right to license its technology. The patents cover both
the structure of the acids used in NeoStrata’s products and the purposes
for which the products are used. "Anyone who uses AHAs in skin
care products is using our technology," Wildnauer says, explaining
NeoStrata’s success in patent litigation. "Any claims relating
to aging are covered by our patents. Pore size, evenness of pigmentation,
laxity, fine lines and wrinkles are covered. How good is a patent?
As good as it will stand up in court."
"NeoStrata does not have a monopoly by any means," counters
Albert Rosenthal, a clinical professor of dermatology at Hahnemann
who has offices on Franklin Corner Road. "It is a perfectly competent
company, but they do not have all the patents and they are not unique."
Rosenthal prefers the products of a competitor that, like NeoStrata,
has a line for sale by doctors, but that has not yet been the target
of a NeoStrata lawsuit.
Explaining why the dermatology community may not agree
with NeoStrata about the exclusivity of its AHA patents, Wildnauer
points out that NeoStrata did not begin to file lawsuits until last
year. The seven targets of the initial lawsuits were Beiersdorf, Clarins,
USA Inc., Chanel Inc., Neoteric Cosmetics Inc., Leiner Health Products,
Cosmair (L’Oreal), and Murad Skin Research Laboratories.
All five of the patents in question were reconfirmed, and one of the
defendants entered into a license agreement to settle the litigation.
"The doctors hate the litigation," says Wildnauer. "They
come up every Thursday for board meetings, but they’re not involved
in day-to-day management. We develop their research and keep filing
for patents. They’re not academicians. They want to see their developments
The products derived from the research of the doctors fall into two
groups: an established cluster of items, brand-named NeoStrata, marketed
through dermatologists and plastic surgeons, and a new group of products,
brand-named Exuviance, whose distribution through salons and cosmetic
counters is now being established. A major step in bringing the Exuviance
line to the public was its debut in September at the Nordstrom flagship
store in Scottsdale, Arizona. "We weren’t just selling cosmetics,"
says Barbara Green, a spokesperson for the company. "We were doing
seminars on skin care from a pharmaceutical point of view."
Presently, medical products represent the bulk of Neo-Strata’s business.
NeoStrata products are sold in more than 40 countries. More than half
of NeoStrata’s sales are abroad. Plans for selling Exuviance products
extend to eight countries, which seem to have little in common besides
Exuviance. They are Singapore, Taiwan, Lebanon, Cyprus, Lithuania,
Denmark, and Sweden.
Wildnauer came into the picture as it became clear that the future
lay with marketing NeoStrata products not only to dermatologists,
but to consumers. Following three or four presidents, with relatively
brief tenure, Wildnauer will soon celebrate his fourth anniversary
as head of NeoStrata, a record for longevity. While his predecessors’
background was primarily in marketing, Wildnauer’s background includes
both science and business. Under his leadership NeoStrata has launched
new products in both professional and consumer markets. Within a year
of his assuming the presidency, NeoStrata turned its balance sheet
from losses to profitability.
When Wildnauer arrived in 1995 NeoStrata had its own sales force,
a non-essential component for a company whose strong points are research
and development. Neo-Strata’s first attempt to get out of sales came
through an agreement with Glaxo in 1997. Ortho Dermatological, a Johnson
and Johnson company, later stepped in. Ortho markets prescription
skin care products in the acne, antifungal, and aging skin categories,
including Renova and Retin-A. In January NeoStrata and Ortho formed
an alliance for the exclusive marketing and selling in the United
States of NeoStrata’s professional products, as well as of its consumer
Exuviance line to physicians.
When asked to describe what he did to turn Neostrata around, Wildnauer
responds with an upward eye movement as if the difficulty of his task
is still vividly with him. "I changed the focus of the company
to technology," he says, "and worked on organizational development,
plus personnel changes. A new element was developing and commercializing
the technology. Patents are just a piece of paper until you can show
Wildnauer has a sunny though hard-nosed philosophy about how NeoStrata,
relatively small, with approximately 50 employees, can work effectively
with a large company, if not make itself indispensable to a corporate
giant. "Distribution is the secret. You can have the best product
in the world, but if you can’t get it from here to there, it doesn’t
do anybody any good. The companies that are our potential licensees
are more and more open and adventurous. They know they have to get
to market quickly or someone else will get there first. A little company
and a big company can have a synergistic relationship. The big companies
let us develop the product, and they evaluate it. We depend on their
Wildnauer, 58, was born and grew up in the Pittsburgh area. He earned
a bachelor’s degree in chemistry from St. Vincent College in Latrobe,
Pennsylvania, in 1962. His doctorate from the University of West Virginia
came less than four years later. For two years he was a National Science
Foundation post-doctoral fellow at the University of Kansas in Kansas
City. His postdoctoral research dealt with enzyme kinetics, protein
structure and protein hydration.
His first industrial position was at Johnson and Johnson, where he
remained for 26 years. "I was fortunate to get into a J&J division
studying a disease condition, ichthyosis, rather than into product
development." He served as manager of new products and market
development for McNeil Pharmaceutical, vice president for research
and development at Janssen Pharmaceutica, and vice president for technology
and business development, as well as chairman of the skin care council
of research directors for J&J’s corporate headquarters.
Wildnauer earned an MBA from Rider in 1974. "I was frustrated
that scientists and business people didn’t understand what each other
was saying. I was interested in how to communicate. And I saw a lot
of wasted effort and spinning wheels."
Wildnauer and his wife live in East Brunswick. Their adult daughter,
who works in the computer area, lives in San Francisco.
Wildnauer’s career has spanned what he calls the three advances in
skin care in the last 30 years. "In the 1970s we learned that
sunscreens could prevent photo damage to skin, and that it was important
to use sunscreens early in life, and daily. In the ’80s, it was the
retinoids, acids related to vitamin A. They were first shown to be
an acne treatment, and then we learned that they were good against
fine lines and wrinkles. In the ’90s it was alpha hydroxy acids. Today
there are over 200 companies selling them."
Looking ahead to the next decade, Wildnauer thinks that
poly hydroxy acids (PHAs) will be the leading skin care product. Because
their molecules are larger than those of AHAs, they penetrate the
skin more slowly, and are less likely to cause irritation.
As far as NeoStrata’s balance sheet is concerned, Wildnauer foresees
the Exuviance consumer line as playing an increasing role. "For
physicians," he says, "we have a line of stronger products,
requiring the supervision of a doctor. But Exuviance takes the same
technology and makes it more elegant. Patients who have been cured
of a skin condition might be willing to continue skin care on their
own with Exuviance. The product looks good and has an aroma."
Levels of strength in the physicians’ line are higher than those for
the mass market. "Our mass market products have the highest levels
we consider to be appropriate without supervision. The well-established
name of NeoStrata in medical circles makes our consumer products more
acceptable in consumer circles. We are a dermatology company trying
to bring quality skin care to the consumer," says Wildnauer. "Our
goal is therapeutic skin care. We are a step above fashion. We won’t
change a product unless we have a new product better than what we
Does NeoStrata’s array of products sound too good to be true? The
cautious U.S. Food and Drug Administration (FDA) can think of caveats.
Paula Kurtzweil of the FDA’s public affairs staff, cites them in an
article posted on the FDA web site dated March-April 1998. Their relative
newness, she points out, means that their long-term effects are unknown.
In addition, she quotes John Bailey, acting director of FDA’s Office
of Cosmetics and Colors, who finds it "a somewhat alarming idea
to put acids on the skin," and worries about the low barrier to
bringing AHA products to market.
At the behest of the FDA, Kurtzweil reports, the National Toxicology
Program of the National Institute of Environmental Science has since
1997 been studying AHAs and is expected to issue a report by the year
2000. Meanwhile, the FDA cautions consumers to take extra care with
AHA product by avoiding the sun when possible, using adequate sun
protection, and reporting adverse reactions to doctors or the FDA.
Aware of the safety issues the Cosmetic Ingredient Review Panel (CIRP),
the cosmetic industry’s self-regulatory body, issued its own guidelines
in 1997. Products for consumer use, the CIRP said, are safe when the
AHA concentration is 10 percent or less, the product has a pH of 3.5
or greater (the lower the number, the greater the acidity), and the
product is formulated so that either it protects the skin from increased
sun sensitivity or its package directions tell consumers to use sunscreen
NeoStrata’s consumer products have an AHA concentration of 10 percent
or less; their pH is comfortably above 3.5, making them less acidic,
for instance, even than household vinegar, and their daytime products
include a sunscreen with a sun protection factor of 15.
Those who want their wrinkles to disappear now, rather than waiting
for decades, to make sure that no risk is involved, are enthusiastic
about Exuviance products. They are ready to rub on their sun screen
and join with Cleopatra and the folks at NeoStrata in raising a glass
to the alpha hydroxy acids.
08540. Richard H. Wildnauer, president. 609-520-0715; fax, 609-520-0849.
Home page: http://www.NeoStrata.com.
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.