Procter & Gamble Co. (NYSE:PG) subsidiary Gillette Co. amended a licensing agreement with Palomar Medical Technologies Inc. (NSDQ:PMTI) for a home-use laser hair removal device for women after a delayed launch.
Under new terms, each company will provide more funding "to meet the common goal of a successful product launch," according to Palomar.
The Burlington, Mass.-based cosmetic laser developer inked the contract with Cincinnati, Ohio-based Proctor & Gamble in February 2008. It stipulated quarterly payments of $1.25 million to Palomar prior to the device’s commercial launch. P&G’s fourth-quarter payment will now be reduced to $1 million; P&G will also pay $2 million a year for an unspecified "agreed period." After that, the payments will return to $1.25 million per quarter if no product has been launched, according to documents filed with the federal Securities & Exchange Commission.
P&G plans to use the savings to speed up "product readiness and commercialization,". Palomar will be compensated with an increased percentage of sales after the device’s launch.
“Together the companies have each agreed to invest more to put this product in consumers’ hands as early as possible. We are trading some of our fixed short-term pre-commercial launch calendar quarterly payments for an increase in sales related payments post launch that we believe will provide us greater benefit in the long run,” Palomar CEO Joseph Caruso said in prepared remarks.
In September, Palomar delayed the launch of its over-the-counter peri-orbital wrinkle treatment laser until the spring.