Chantal Pharmaceutical rolls out new wrinkle lotion.

Star-studded event touts the benefits of new product

A full-on crush of the beautiful if creeping-towards-middle-aged convened at the swank Four Seasons Hotel in Beverly Hills last week, to hear the news from West L.A.-based cosmetics manufacturer Chantal Pharmaceutical Corp. -- that it has perfected for manufacture and distribution a new lotion, trade-named Ethocyn, that reduces wrinkles.

"We will be in the retail stores with Ethocyn by mid-1995, and we will be airing infomercials by then too," said company founder Chantal Burnison, president, chief executive, chemist and attorney. "We will be in Europe even earlier, by April of 1995."

The Chantal Pharmaceutical press conference was perhaps like no other ever held by a publicly held company -- in the audience, front and center and asking questions was actor Tony Curtis.

"Is the product available only by prescription?" asked Curtis. Not to worry, Burnison replied. Ethocyn is classified as a cosmetic, not a drug, so it does not need U.S. Food and Drug Administration approval or doctors' prescription. Consumers soon will be able to buy it off the shelf, but for now can call the company 800 numbers, she said.

The product is selling for $120 per package, which includes related products.

Celebrity interest

Looking on as Curtis queried were actresses Morgan Fairchild, Jill Eikenberry (who emceed the event) and Barbara Eden, singer Rita Coolidge, and exercise doyenne Gilda Marx. Reporters from the Los Angeles Times, the Chicago Tribune, KABC, KCBS, Elle, Allure, numerous women's magazines and other news outlets milled about.

In the midst of this, Chantal Pharmaceutical's investment banker Kent Baum of Baltimore-based Alex. Brown & Sons said a secondary offering of Chantal stock was a possibility.

"Until now, Chantal has been raising capital through private placements," he said. "But going to Wall Street will be an option."

Expert endorsement

Following a testimonial by Gilda Marx, who pronounced Ethocyn "a miracle," the scientific basis for Chantal Pharmaceutical's claims was made, in part, by Dr. Richard Strick, professor of dermatology at UCLA.

Testing Ethocyn on 20 patients, Strick found the elastin in the skin of treated areas increased, on average, by 100 percent. The product has virtually zero toxicity, and no side effects, said Strick.

Patients had greater or lesser increases in elastin depending upon their genetic predisposition, he said.

He has no stock or financial stake in Chantal Pharmaceutical, said Strick.

All attendees received two free vials of the clear liquid Ethocyn, enough for a two-month trial. Many, such as event-organizer Linda Ford, said they have already been using the product, and it works.

Market unimpressed

Meanwhile, Wall Street last week reacted more conservatively, with Chantal Pharmaceutical inching up $0.125 to $3.125 on Tuesday, the day of the press conference.

But the stock has been trending up; it traded in the mid-$2-a-share range in September.

Chantal Pharmaceutical has long been a roller-coaster ride on Wall Street for investors, with the stock rising as high as $7.375 or falling as low as 50 cents a share in the last two years.

It has lost money in its last five fiscal years, and reported a loss of $1.8 million on revenues of $165,077 in fiscal 1994, ended June 30.

Essentially, the company has stayed afloat the last five years by privately placing new stock, or by converting debt into equity (stock). The company is traded on the NASDAQ Small Cap market.

Nevertheless, there is enough investor confidence in its future for Chantal Pharmaceutical to have a market capitalization (shares outstanding times price) of $29.5 million.