What to Consider (and Do) Before Licensing IP – PART I

Plug “Biotech Licensing” into Google and you’ll get back over five million search results. It doesn’t take a business guru to know that technology licensing is a big part of the emerging tech arena. But how do companies actually find IP, and what should they be considering before they even contemplate negotiating a licensing agreement?

 

In this post, I’ll attempt to answer those questions, by summarizing some of the advice I give to clients looking to license technology.

 

Identify Licensors and IP

So how do you find a licensor? Sometimes you’re lucky enough to hear about someone with the perfect IP for you to license, or even better, they approach YOU, and say, “hey, we think there’s a biotech application here, but we think you’re company is better able to develop it than we are,” and they offer you a license. Great, problem solved. But the reality is, it’s often difficult to find IP that is not only available for license, but can turn into something commercially viable.

 

So let’s talk about some other ways to identify licensors. Well the easiest way is using something I like to call, the Google. Sounds simple, but very quickly you may be able to identify companies that may have IP they are willing to license. In fact, sometimes, they even specifically state as much on their site. (For five places to find IP, check out this POST) Obviously, everyone knows about google, but my point is to not overlook some of the basic search tools for identifying possible licensing partners.

 

And not just for licensing, but for other possible collaborations. For example, one of our clients, based here in Cleveland, used google to find a manufacturing partner for their product, and what started as an initial cold call explaining an interest in potentially collaberating, has flourished into a very exciting partnership, that has begun to grow into partnerships on other fronts. Incidentally, that manufacturer isn’t located in China, or on either of the Coasts, but right here in Cleveland.

 

That goes to my second point, don’t overlook local resources. There’s this concept that in order to find intriguing IP and sophisticated licensing partners, you have to look to the coasts or simply somewhere else. A kind of, “Not in My Backyard” mentality. Just in Northeast Ohio not only are there incredible resources right here, but there are organizations waiting to assist tech start ups, like BioEnterprise, JumpStart, MAGNET, and Techlift. These types of organizations are popping up all over the country, meaning there’s a lot of assistance out there for tech startups.

All of these organization are easily accessible and have the resources to help your company get what it needs. Let me give you a quick example, a client company of mine has developed some very innovative technology that requires very sensitive equipment to measure it’s efficiency. It wasn’t until we contacted several of these organizations that we were put in touch with some folks over at NASA who had the equipment we needed. Therefore, ergo, vis-a-vis, try to find resources locally before looking elsewhere.

When we continue in the next post, we’ll pick up with: I’VE FOUND A POTENTIAL PARTNER AND IP, NOW WHAT?

Healthcare I-Bankers Give Outlook on Biotech, Pharma and Med Tech Financing

First, we know we know, we’ve been a little too lax on keeping up a consistent stream of posts. So here’s to our re-commitment to keeping the Biz O’ Emerging Tech Blog updated.

Now that we have that out of the way, I read an interesting interview done with Mark Dempster and Ralph Sutton of the Thomas Weisel Partners New York City healthcare investment banking team.

Here’s a couple quick hits from the interview:

• “VCs are consolidating their investments [and]…are being forced to hold onto portfolio companies longer than originally planned and…[concentrating] funds on a subset of companies.”  

I’m not sure that’s really newsworthy, but hey, it’s nice to hear someone “in the know” say it;

• “VCs may be an alternative funding source for public companies with low market valuations, but companies need meaningful clinical data in hand or in upcoming announcements to be attractive to them.”

I thought this was actually a pretty interesting insight for a couple reasons; (1)  the common perception (at least from a tech start-ups view) is that VCs provide later stage funding for small companies, not public companies (even ones with low valuations) that supposedly have a (supposedly) proven business, and have access to capital through the markets; (2) : Things have tightened so much in the VC markets, that even public companies have to prove their business ideas to get funding.

• “Access to capital is extremely challenging for small-cap and private biotechnology companies.”

I know that’s not really surprising, but again, it’s helpful (or not) to hear that from the horses mouth.

• “In medical technology…VCs [want] opportunities to provide growth capital or where the risks are related to commercialization and execution, rather than clinical, regulatory and reimbursement.”

Translation: Good luck to all you early-stage med tech companies. It’s unfortunate, because it used to be that although you gave up a ton of equity to get VC money, you knew that without it, you probably couldn’t get through the clinical and regulatory hurdles without that funding. Now, you’re still going to give up a huge chunk of equity, but now VCs only want to play ball once the hard stuff is done. Isn’t the whole point of giving VCs a huge equity stake, that they are taking on significant risk that the business won’t pan out, and should get rewarded if it does? I say, forget it, if you’ve gotten this far without them, strap on those boots and try and go it alone!

Click HERE for the whole article, as featured on rxforpr.com (check them out, it’s a cool site)

Financial Accounting for Dummies: Thanks, Youtube!

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

I am not a huge fan of Youtube. I rarely see it used for anything beyond posting tomfoolery for the amusement of others. That said, I recently came across a series of 5 minute videos on Financial Accounting, taught by Susan Crosson. The pace is slow, and I couldn’t help but feel like I was back in the 3rd grade. However, Susan is incredibly clear, succinct, and offers an utterly wholesome approach to delivering the subject matter. Bear with the sound quality…it can be quite annoying at times.

There’s no excuse for being an entrepreneur or business owner and not fully understanding how basic accounting and finance works. If you’re paying someone else to handle your numbers because you just don’t have the time, fine. If you’re outsourcing this because you don’t know how, I suggest you click the following link and take some time to improve your company’s most important brand (you!).

Accounting and Finance by Susan Crosson

Slainte Mhath!

Effectual Reasoning: A Glimpse at What Makes an Entrepreneur Entrepreneurial

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

A scientist at heart, I am a sucker for a good academic article. I read one such article a few weeks ago. It explored the differences between Causal and Effectual thinking and their approaches to starting and growing a business.
Causal thinking is what MBA’s do (and are taught to do): begin with a pre-determined goal and a given set of means, then seek to identify the optimal alternative to achieving the given goal. Effectual thinking is what entrepreneurs do: given a set of means (abilities, knowledge, and network) it allows goals to emerge contingently over time from the varied imagination and diverse aspirations of the entrepreneur and the people they interact with. Think of it as the MBA conqueror (Alexander the Great) versus and entrepreneurial explorer (Amerigo Vespucci). The prose articulates not just how MBAs and Entrepreneurs are different, it also outlines when their schools of thought excel and when they tend to fail (and
why). As you can imagine, in the end, it’s best to be a bit of both.

In short:
1) MBAs plan, Entrepreneurs execute.
2) MBAs focus on the end, Entrepreneurs fixate on the means.
3) MBAs avoid surprises, Entrepreneurs embrace and utilize them.
4) MBAs try to control the future, Entrepreneurs seek to create it.
5) MBAs grow and sustain, Entrepreneurs innovate and start.

If you have the time, and don’t mind a little ‘academic’ reading, I highly recommend this article. Click the following link to open the .pdf file.

Effectuation: What Makes Entrepreneurs Entrepreneurial?

Slainte Mhath!

“Thou Shall Nots” of Business Development

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

1) Thou shall not tell the science story and neglect the market story!
-Do realize the market is the story and focus on it. Weave a succulent picture of success, keeping in mind that your audience is not stupid and will not fall for “our target market is $50B”.

2) Thou shall not assume the market is static!
-Do project the future market and make sure your forecast and financial assumptions make sense. If you hand-wave, it’s off with your head…and your paws!

3) Thou shall not design a product based on what you think the customer wants!
-Do get off your haunches and KNOW THY CUSTOMER.  Email them. Call them. Interview them in person. Let them beta-test a demo. Take their family out to dinner…whatever. Just don’t guess when you can know.

4) Thou should not ignore a physicians’ financial motivations! (Ok, this one’s for BigPharma and BioTech. Bare with me)
-Do understand that docs are just as interested in making money and keeping their business out of the red as you are. In other words, never assume patient outcome trumps negative financial considerations. Variable levels of healthcare reimbursement will affect the doc’s behavior. Build this into your assumptions.

5) Thou shall not ignore the importance of reimbursement on future profitability!
- Do understand who pays for what and why. Further, you need to know what the “reimburser’s” price sensitivity is and what drives it. A drug or biologic will rarely (“never”) become lucrative without first being reimbursed. As soon as your product enters FDA trials, get the reimbursement call rolling (Medicare and Medicaid).

6) Thou shall not speak in strange valuation tongues.
-Do use the valuation methods of your audience. Different strokes for different folks. Biotech is not Pharm is not Venture Capital is not… you get the point. For example, Pharma loves to use the net present value (NPV) and risk-adjusted NPV (rNPV). BioTech, on the other hand, prefers to only use rNPV. Lastly, VC’s tend to focus their eyes on comparable analysis, which compares an investments ‘exit value’ across various exit strategies and with similar exits values. The licensee performs the deal(tech)-valuation. The valuation is a crucial part of the investment decision. As such, it behooves you to learn the preferred valuation methods of your prospective investor and either follow suit or give the investment team the exact inputs it needs to quickly make a valuation estimate.

7) Thou shall not pitch thy product as ‘perfect’!
-Do be honest and disclose potential problems and pitfalls. Nobody’s technology is perfect. Investors know this, and assuming they don’t will only get you laughed at. Come right out and mention and address any disadvantages. Feel free to run down you list of way to mitigate risk. This will build credibility and allow you to damage control. Better to mention it early, then to have an investor ask you about it later.

Slainte Mhath!

Ref: Stewart J and Bonifant B. “The Seven Deadly Sins of Business Development.” Nature BioEntrepreneur. April 2008.

All That is Patented is Not Gold – The “So What?” Factor

One of the trickiest things to do when working with entrepreneurs, especially technically savvy inventors such as medical researchers or engineers, is to convince them that just because they have a patent, does not mean they are sitting on a billion dollar business. In fact, there’s a really good chance they’re not even sitting on a thousand dollar business.

Let’s face it, I could walk down the hallways of even a mediocre university, and if I bumped into a researcher coming around the corner, chances are three patents would fall out of his shirt pocket. As discussed in my previous post on five places you can license IP from (http://biotechbiz.wordpress.com/2009/01/04/5-places-to-find-ip-to-license/), finding patented technology to license is really not that difficult.

What IS difficult, is sitting down (ideally before you spend tens of thousands of dollars to hire IP counsel) with your technology and asking yourself, “so what?”  My device can diagnose staph infection twenty five minutes faster than the current test on the market. So what? Is there utility in knowing that information twenty five minutes faster? (for the record, I just made this up. I have no idea how they figure out if you have staph infection)

The inventor may have spent the last five years perfecting this technology, but I may show the device to an infectious diseases doctor and in five minutes he’ll tell me that diagnosing staph twenty five minutes earlier doesnt really matter because the infection won’t progress in that short a period. Plus, the current testing costs half as much as the new technology. In five minutes, I determined that our researcher’s PATENTED technology is basically worthless.

Remember, when you get a patent, the US Patent and Trademark Office is not saying you have a commercially viable idea, they are basically protecting your innovation. But innovation does not necessarily translate to commercial viability. It is certainly innovative to be able to diagnose staph infection twenty five minutes faster than the current test. But again, you have to ask yourself, “so what? Does it matter enough that someone is going to buy my technology.” If you can’t answer that yourself, good luck trying to convince a venture capitalist.

Remember, the worst kind of technology, is to have what I call, “Neat Technology.” Neat technology is any technology that a venture capitalist would look at and say, “neat technology, but it’s unnecessary.”  So the next time you are about to form a company around a really cool patented idea, take a second and ask yourself, “So what?” You may save yourself a lot of time and money by answering that simple question.

50 Ideas on Utilizing Twitter for Business

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]


We really can’t deny the fact that businesses are testing out Twitter as part of their steps into the social media landscape. You can say it’s a stupid application, that no business gets done there, but there are too many of us (including me) that can disagree and point out business value. I’m not going to address the naysayers much with this. Instead, I’m going to offer 50 thoughts for people looking to use Twitter for business. And by “business,” I mean anything from a solo act to a huge enterprise customer.

First Steps

1. Build an account and immediate start using Twitter Search to listen for your name, your competitor’s names, words that relate to your space. (Listening always comes first.)
2. Add a picture. ( Shel reminds us of this.) We want to see you.
3. Talk to people about THEIR interests, too. I know this doesn’t sell more widgets, but it shows us you’re human.
4. Point out interesting things in your space, not just about you.
5. Share links to neat things in your community. (@wholefoods does this well).
6. Don’t get stuck in the apology loop. Be helpful instead. ( @jetblue gives travel tips.)
7. Be wary of always pimping your stuff. Your fans will love it. Others will tune out.
8. Promote your employees’ outside-of-work stories. ( @TheHomeDepot does it well.)
9. Throw in a few humans, like brett_hoover, LionelAtDELL, etc.
10. Talk about non-business, too, like @astrout and @jstorerj from Mzinga.

Ideas About WHAT to Tweet

1. Instead of answering the question, “What are you doing?”, answer the question, “What has your attention?”
2. Have more than one twitterer at the company. People can quit. People take vacations. It’s nice to have a variety.
3. When promoting a blog post, ask a question or explain what’s coming next, instead of just dumping a link.
4. Ask questions. Twitter is GREAT for getting opinions.
5. Follow interesting people. If you find someone who tweets interesting things, see who she follows, and follow her.
6. Tweet about other people’s stuff. Again, doesn’t directly impact your business, but makes us feel like you’re not “that guy.”
7. When you DO talk about your stuff, make it useful. Give advice, blog posts, pictures, etc.
8. Share the human side of your company. If you’re bothering to tweet, it means you believe social media has value for human connections. Point us to pictures and other human things.
9. Don’t toot your own horn too much. (Man, I can’t believe I’m saying this. I do it all the time. – Side note: I’ve gotta stop tooting my own horn).
10. Or, if you do, try to balance it out by promoting the heck out of others, too.

Some Sanity For You

1. You don’t have to read every tweet.
2. You don’t have to reply to every @ tweet directed to you (try to reply to some, but don’t feel guilty).
3. Use direct messages for 1-to-1 conversations if you feel there’s no value to Twitter at large to hear the conversation ( got this from @pistachio).
4. Use services like Twitter Search to make sure you see if someone’s talking about you. Try to participate where it makes sense.
5. 3rd party clients like Tweetdeck and Twhirl make it a lot easier to manage Twitter.
6. If you tweet all day while your coworkers are busy, you’re going to hear about it.
7. If you’re representing clients and billing hours, and tweeting all the time, you might hear about it.
8. Learn quickly to use the URL shortening tools like TinyURL and all the variants. It helps tidy up your tweets.
9. If someone says you’re using twitter wrong, forget it. It’s an opt out society. They can unfollow if they don’t like how you use it.
10. Commenting on others’ tweets, and retweeting what others have posted is a great way to build community.

The Negatives People Will Throw At You

1. Twitter takes up time.
2. Twitter takes you away from other productive work.
3. Without a strategy, it’s just typing.
4. There are other ways to do this.
5. As Frank hears often, Twitter doesn’t replace customer service (Frank is @comcastcares and is a superhero for what he’s started.)
6. Twitter is buggy and not enterprise-ready.
7. Twitter is just for technonerds.
8. Twitter’s only a few million people. (only)
9. Twitter doesn’t replace direct email marketing.
10. Twitter opens the company up to more criticism and griping.

Some Positives to Throw Back

1. Twitter helps one organize great, instant meetups (tweetups).
2. Twitter works swell as an opinion poll.
3. Twitter can help direct people’s attention to good things.
4. Twitter at events helps people build an instant “backchannel.”
5. Twitter breaks news faster than other sources, often (especially if the news impacts online denizens).
6. Twitter gives businesses a glimpse at what status messaging can do for an organization. Remember presence in the 1990s?
7. Twitter brings great minds together, and gives you daily opportunities to learn (if you look for it, and/or if you follow the right folks).
8. Twitter gives your critics a forum, but that means you can study them.
9. Twitter helps with business development, if your prospects are online (mine are).
10. Twitter can augment customer service. (but see above)

I’d like to thank Chris Brogan for his permission to use his wisdom in this ’string of pearls’.

Slainte Mhath!

5 Places To Find IP to License

Want to know a little secret? You don’t need your own IP to start a biotech company. There are literally hundreds, perhaps thousands, of patented ideas waiting for you to license on very reasonable terms.

Let me answer your first question: If these patents are so great, why aren’t they already being commercialized? That is actually quite simple to answer. First, not everyone who is an inventor is ready to jump off the lab bench and into a meeting with venture capitalists. Many are quite happy to put another notch on the old “patent belt” and move on to the next research project.

Next, even if the inventors were willing to commercialize the technology, many of the inventors work for institutions that would prefer the inventor to keep doing what they’re doing, and leave the commercialization to those who know what they are doing. That’s where you, the biotech entrepreneur comes in.

That wasn’t always the case. Even just ten years ago, many universities would actively block anyone trying to commercialize their technology. Now there are entire tech-transfer offices dedicated to commercializing technology created by institutions. Why? Because when you commercialize their technology, they’ve just created income without doing much, and letting you take on the risk. So if a technology is successful, great! they get paid. If it’s not, oh well, maybe someone else will take a crack at it.

So without further delay, below are five places with IP just waiting to be licensed. In upcoming posts, I’ll cover how to go about licensing technology, and how to identify technology you actually want to license. In the meantime, enjoy:

1. USDA Patents and Licensing http://tinyurl.com/6yvyjy

The USDA has a great page that clearly delineates the IP available for licensing covering a wide variety of  technology interests. It has has a cool section detailing success stories, and has a very easy to follow application process.

2. MIT Patents Available for Licensing http://tinyurl.com/9wfd65
I always like to see what’s available for licensing from one of the preeminent institutions in the world. Unfortunately, their site is not very user-friendly, and doesn’t have many of the bells and whistles that USDA’s site has. With that being said, I think it’s safe to say that MIT doesn’t have to impress anyone.

3. NASA Technology Transfer and Partnership Office http://tinyurl.com/88ap2r

Obviously NASA is always working on cutting edge research, and naturally NASA spins a lot of IP out of that research. NASA’s site is very user-friendly and has a lot of very helpful information, such as  a thorough explanation on how to partner with NASA.

4. Army Patents Available for Licensing http://tinyurl.com/axomk4

Admittedly, the Army’s site is pretty basic, but the military always has fascinating technology available for licensing. Also, it’s very possible you’ll be able to get some funding from the Army towards commercializing their technology. Plus, if you commercialize it in a way the military can use it, there really is no better customer to have than the U.S. military.

5. IBM Intellectual Property and Licensing http://tinyurl.com/23q7c

In 2007, IBM was awarded over 3000 patents, and maintained its 15 year streak of being awarded more patents than any other company in the world. That is an incredible accomplishment. Obviously, IBM is not able to commercialize each and every one of its patents, and so they list patents that are available for licensing. Not a bad site, but could be a little easier to use.

Small Business 2009: ‘Pearls’ To Consider

By: Brett A. Hoover [Follow me on Twitter and LinkedIn]

As we move forward and away from the proverbial disaster that was 2008, I feel its important for small businesses and entrepreneurs alike to consider how we are going to handle things in 2009. More importantly, how we plan to do well by being better. Here are a few ‘pearls’ that came to mind:

1) Make, Create, Find Possibilities: 2009 will be full of ideas, opportunities, and possibilities. Don’t sit back on your haunches and plan. Get up, get out, and find them! The hardest part of any project is just getting the ball rolling in the right direction.

2) Create Unique Value: Make your product, service, and company uniquely valuable. Sure times are ‘tough’, but that doesn’t mean people will suddenly stop buying what the need. It simply means that your potential customers are more price-/quality-sensitive and that you must cater to this. By differentiating your company from the competition, you position yourself to be the preferred choice of your target market.

3) Market like a Madman: Now, more than ever, it’s crucial to let the customers know that you exist. Don’t hesitate to be creative and to use any means necessary: blogs, Twitter, Facebook, Newsvine, Digg, LinkedIN, strategic networking, word of mouth, cold calls, e-mail, snail mail, etc. By focusing at least part of your marketing efforts online, you stand to save of green$$$. The end-game here is to get your name in front of potential customers.

4) Customers First…Especially Now: Life is sales and business is about customers. Period. During an economic downturn, this is only more true. If you’re not doing right by the client, you’re not selling. If you’re not selling, you’re not making money. If you’re not making money… it’s only matter of time until you’re a goner. If you’re going to make cuts to your budgets, see to it that customer service (and contact) remains wholly in-tact.

5) Vet Your Ideas…Often: Don’t be afraid to discuss your idea with someone. It’s not easy to trust others, but it’s rare than vetting your idea with a trusted mentor or colleague will do more harm than good. By bouncing your ideas off of a diverse and experienced crowd, you will  strengthen both the idea and your ability to think critically about it. Look at it this way, no one likes to pitch their idea to investors, only having to respond to their questions with “Shucks, I never thought of that”. Ouch!

6) Cut any Financial Tomfoolery: No one wants to appear cheap, but that’s no reason to be a fiscal idiot…especially during an economic recession. Take a close look at what you spend money on and think about what is truly necessary and what is not. For example, consider bundling your phone and cable services. This can save an upwards of $300/year. Further, do you really need digital cable at the office (aside from a wicked-fast Internet connection)? Lastly, try to avoid cutting the salaries of good, hard working employees. There’s nothing wrong with firing people who don’t give 110%, who have no passion for their job or the company, or who (as Bob Sutton puts it) are big A$$$#()!&$. Just remember that the right people are your most valuable asset. Try to treat them as such. As my father always says: “it’s just plain bad business to mistreat good.”

7) Consider Investing: If you haven’t noticed, now is a great time to reinvest in your company, your family, yourself, etc. Consider investing you mutual funds, ETFs, or even the stock market. Be smart about it though…don’t just read Morningstar for a week and assume you have a clue (I’ve done this…eek!). Take your family on a vacation, taking advantage of all the airline and hotel deals floating around out there in the ether. Not to over paraphrase W. Buffet, but he makes a good point when he tell us to be ‘greedy’ when other folks are scared.

There are literally hundreds, maybe thousands, of other ideas on how to improve you business in 2009. I could keep going, but I personally enjoy blog entries that are short and succulent. Be sure to think about the previous points relative to your own life. With any luck, something I’ve written will positively impact someone silly enough to take me seriously.

Slainte Mhath!

Nutricosmetics – Snake Oil or Biotech Opportunity?

Perusing the pages of Fast Company, I came across a series of articles profiling the new trend of “nutricosmetics.” What exactly is nutricosmetics? According to Nestle’s Chief Beauty Officer (yes that’s a real title) Kimberly Cooper, it is the fusion of “food, nutrition, and beauty,” and the notion that “what you consume does affect how you look and feel.”

Nestle has turned that description into Glowelle, which it describes as a “Beauty Drink.” Available only at places like Bergdorf Goodman and Neiman Marcus, at first glance the whole concept seems like a fleeting trend for those with more money than sense. But Datamonitor, a market researcher, projects that nutricosmetics will be a $1.3 billion category by 2012.

 Now you may be wondering how this all relates to biotechnology. It does not appear that the FDA has any oversight, and Nestle is not exactly a pharma powerhouse. That is what makes BASF’s entry into the market more intriguing. Certainly, the world’s largest chemical company’s involvement lends some level of scientific credibility to nutricosmetics. The $79 billion company has been creating high-end nutricosmetic ingredients for companies such as Estee Lauder and L’Oreal.

Serge Rogasik, who heads up the nutricosmetic effort for BASF, and is a biochemist by training, sees nutricosmetics as part of a movement in “in which holistic treatments replace toxin-based ones.” In the Fast Company article, he references advances made in skin care by using food-science technology, such as dill extract to treat aging skin, and expects to see breakthroughs in within the next 36 months.

Wow, what a concept. Instead of plastering Clearasil on before bedtime (been there), you could just sip a chilled mango-guava beauty smoothie (just made that up, but it does sound tasty) that treats your pores from the inside. Here’s the problem, where’s the science? How does Nestle’s Chief Beauty Officer, previously a brand manager, prove that Glowelle  does anything, other than cleanse your pockets of cash?

Now anyone who’s been in a GNC knows there are many products that make outlandish nutritional claims without FDA approval. Are nutricosmetics similarly going to be able to fly under the FDA’s radar and sell “health” products without FDA interference?

Well, if the case of Diet Coke Plus is any indication, maybe not. As a quick tutorial on gross drinks, Coca-Cola describes the drink as “a sparkling, calorie-free beverage with vitamins and minerals. In addition to providing great, refreshing taste, Diet Coke Plus is a good source of vitamins B3, B6, and B12, and the minerals zinc and magnesium.” 

Katie Bayne, senior VP, Coca-Cola Brands, Coca-Cola North America is quoted as saying”we wanted to offer [consumers] the convenience of a calorie-free beverage that is a good source of several essential vitamins and minerals, and one that delivers on the great taste that they have come to expect from us.” (here’s the whole press release http://www.dietcoke.com/press_032207.pdf)

Sound familiar? A little nutricosmeticish?

Well the FDA shockingly issued a statement saying that Diet Coke Plus’ labeling is misleading, and in particular, that the nutritional claims are misleading.    More specifically, the FDA says Diet Coke Plus violates the Federal Food, Drug and Cosmetic Act, and that it is misbranded because the nutritional claims do not meet the criteria for such a claim.

The consequences? Coke has to correct the violations, and if they don’t, the FDA will take its own actions, including seizures or injunctions. (For more details, check out this article http://www.consumeraffairs.com/news04/2008/12/fda_coke_plus.html).

So what’s my point? Two things:

First, it appears the FDA may finally be reigning in some of these products that make unsubstantiated nutritional claims, and therefore nutricosmetic manufacturers would be well advised to support their claims with solid science.  Afterall, if Coke can’t prevent the FDA from bringing the heat, who can?

Second, there may be a niche for start-up biotechs to take advantage of this burgeoning area, and create data-backed nutricosmetics, or license such technology to the Nestles of the world who don’t want to undertake the hard science. Besides, who wouldn’t get a kick out of getting funding for developing a chilled mango-guava beauty smoothie. I know I would!