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Swiss Medica Inc. (SWME.OB) Launches New Multi-Channel Distribution Strategy for Canada


7/12/2007 11:03:15 AM

TORONTO, July 12 /PRNewswire-FirstCall/ -- Swiss Medica, Inc. announced today it has launched a new multi-channel distribution strategy for its Canadian business segment focused on the retail, professional and private label channels.

Swiss Medica launched O24 Pain Neutralizer in Canadian national retailers in the fall of 2004 with an aggressive public relations and marketing strategy focused on 30 minute informational radio segments, in-store sampling of O24, consumer trade shows and detailing of medical professionals. O24 was well received by the Canadian marketplace and Swiss Medica's Canadian market revenues in 2005 were approximately US$1.6 million. O24 Pain Neutralizer's 1 ounce bottle was the third best selling SKU in Canada in 2005 in retailers and outsold many major brands including Ben-Gay(TM), Tiger Balm(TM) and Icy Hot(TM).

In 2006, Swiss Medica launched O24 Fibromyalgia into the Canadian retail marketplace and lowered its Canadian marketing spend to focus on its USA retail launch. In addition, it focused its lower Canadian media spend on mainstream marketing strategies including short-form radio ads and sponsorships. The combination of lower marketing dollars and ineffective mainstream media resulted in reduced O24 sales in Canada of approximately US$700,000.

Despite the reduction in sales, O24 has gained a loyal following in Canada with both consumers and the physician community who are looking for a safe and effective alternative for pain, versus both prescription and over-the-counter pills. In addition, O24 is available in most major retailers in Canada and has secured attractive shelf placement in most retailers. Swiss Medica plans to re-launch its aggressive guerilla marketing strategies (from 2005) in the fall of 2007 with long-form 30 minute radio segments with doctors on the radio talking about O24 and call in questions from the audience. In addition, O24 will be re-introduced to the physician community and an aggressive in-store sampling campaign for O24 will recommence to allow consumers to quickly recognize the superior efficacy of O24 versus other products. Swiss Medica believes that it can grow its monthly Canadian retail revenues to levels higher than 2005 within 12 months.

In addition, Swiss Medica has commenced private labelling O24 to Canadian distributors of healthcare products who are selling Swiss Medica's patented product using their own brands. Swiss Medica has completed two private label distribution deals thus far in the past year. Swiss Medica supports its private label customers with training and previously developed marketing and product science literature, but the private label customer must spend its own marketing and media dollars to support their private label brands. These and other private label deals have the potential to materially grow Swiss Medica's Canadian revenues in 2008 and provide excellent net margins as Swiss Medica is not spending dollars on consumer media to support these private label brands.

Swiss Medica is currently in discussions with several large medical product distributors who have expressed strong interest in distributing O24 to hospitals, clinics and healthcare professionals. O24's unique patented process, its strong medical and clinical trial results and its safety profile make it an ideal candidate for the Canadian healthcare professional market. Swiss Medica expects to conclude a distribution arrangement for the professional marketplace by the end of 2007.

Ben Gay is a registered trademark of Johnson & Johnson. Tiger Balm is a registered trademark of Haw Par Healthcare Ltd. Icy Hot is a trademark of Chattem, Inc.

About Swiss Medica, Inc.

Swiss Medica is a specialty pharmaceutical company focused on commercializing over-the-counter clinically-tested, patented all-natural products that relieve chronic ailments. Swiss Medica builds its brands through innovative and focused distribution and marketing strategies. Swiss Medica's mission is to be a world leader in the commercialization of over-the-counter, safe and effective chronic ailment treatments. Please visit our websites at www.swissmedica.com and www.O24zone.com

Swiss Medica's flagship product, the O24 Essential Oil Pain Neutralizer, holds US Patent #6,444,238B1. The O24 pain relief solution has been used and recommended for its fast-acting and long-lasting benefits by healthcare professionals and athletes in the United States, Canada and in Europe. O24 is widely available over-the-counter throughout the United States and Canada in leading pharmacies and other retailers. Customers can also visit www.O24zone.com, for ordering details and store locators for the nearest pharmacy.

Swiss Medica also launched the patented O24 Fibromyalgia pain reliever (US Patent #6,444,238B1) over-the-counter in North American retailers. The National Fibromyalgia Association (NFA) awarded O24 Fibromyalgia their first NFA Seal of Approval. Over 10 million Americans suffer from the long-term pain associated with Fibromyalgia. In a randomized double blind clinical trial conducted in 2005, 88 per cent of the patients who used O24 Fibromyalgia reported mild to markedly better improvement, versus only 7 per cent who used the placebo. Customers can also visit www.O24zone.com, for ordering details and store locators for the nearest retailer.

Forward-looking statements in this news release are made pursuant to the "Safe Harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties, including, without limitation, risks relating to acceptance of Swiss Medica's products in Canada, the United States and other countries, risks related to international sales and purchases and potential foreign currency exchange fluctuations, acceptance of Swiss Medica's products, increased levels of competition, dependence on intellectual property rights and other risks detailed from time to time in Swiss Medica's periodic reports filed with the United States Securities and Exchange Commission and other regulatory authorities.

Swiss Medica, Inc.

CONTACT: James S. Painter of Emerging Markets Consulting, LLC,+1-321-206-6682, jamespainter@emergingmarketsllc.com


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