"It's dermatology, but not just dermatology," is how Foamix's field is described. Less than a year has passed since the company was founded, and Foamix has already signed a joint development agreement with a multinational company. Although it is still strapped for cash, Foamix's entrepreneurs are hoping for the best.

Foamix was founded in January by managing director Dr. Dov Tamarkin and Meir Eini. Tamarkin earlier founded Tamarkin Pharmaceutical Innovation Ltd. (TPI) and worked for Teva and Portman Pharmaceuticals (the technological base for Peptor). Eini worked for Clilco. They had previously cofounded FlexiProbe Ltd., based in Biomedical Incubator RAD-Ramot. They were joined by Dr. Doron Friedman, a former R&D director at Pharmos. Foamix currently has six employees. And the product? It isn’t exactly an ethical treatment, it's more like a variation - a foam to carry dermatological treatments.

Tamarkin says there are currently two types of inconvenient dermatological treatments: creams and lotions. "Both are hard to spread, especially over large areas, and the skin does not absorb either easily. They cannot be spread over burns or open wounds, and the treatment of children is difficult."

Foamix's variation on the known skin creams uses a foam-creating emulsion. "Our foam is immediately absorbed when spread over the skin, like hair gel. It isn’t a shaving foam that is not absorbed."

Foamix has applied for three patents in Israel and the US and will submit three more applications in August. Tamarkin says the foam is basically a platform that can be used for all treatments. "Almost any dermatological treatment can be applied with this method, including those that dissolve in water or oil, as well as those that don’t dissolve at all." Possible applications include psoriasis, atopic dermatisis (a childhood skin inflammation), and fungal and bacteriological infections, although clinical trials have been conducted on only a few types.

Foamix's business model bypasses the pharmaceutical route, since Foamix decided not to develop new molecules, but to redesign one already on the market. This twist in molecular use may also help the company extend its patents. "Companies appreciate this opportunity, and we get feedback from multinational dermatological and other corporations." Foamix has already signed one agreement, although its name may not be disclosed under the contract terms. The company is reportedly one of the world's three largest in dermatology.

Under the agreement, the two companies first jointly selected a molecule for joint development: a product to treat common facial skin diseases. Foamix is developing samples of foam containing the molecule, including stability and skin penetration tests, under a six-month program. The target company is due to pay $100,000 during this period, after which, if all goes well, Foamix will receive the right to license the product for a limited period. Tamarkin says this could lead to a licensing business. "The terms will be the usual ones - an advance, milestones, and royalties. We estimate the preliminary amounts will be the normal $2-5 million."

In addition to this agreement, Foamix is negotiating two more product development agreements with other companies. One is "a leading Israeli company in the field", and the other "a multinational that is strong in the fungicide field."

"Globes": You're not the only company, even in Israel, that is developing treatments that are absorbed through the skin.

Tamarkin: "We welcome every Israeli and non-Israeli company that develops new technologies. However, our foam product is unique. It's not necessarily the skin absorbency that's important, although we are good at that too, but its convenience. This means that patients cooperate because they like using the treatment. This leads to better treatment results"

Two dermatology experts give Foamix a seal of approval: Dr. Howard I. Maibach of University of California San Francisco Medical Center, and Dr Alan Shalita of SUNY Health Science Center at Brooklyn Department of Dermatology. Tamarkin says both doctors are top rank dermatologists who advise almost all of the major US drug companies. "They're members of our advisory board. They direct us to target companies in the US and around the world, and provide recommendations. They helped arrange our first deal, among other things."

Negotiations are underway to develop products with other companies, since Foamix does not want to bet on only one horse. "We have become closely acquainted with the executives of all the top dermatological companies. In the past year, we've been in contact with almost all the leading companies in the field, and piqued their interest."

Tamarkin says 10-20 companies comprise the global dermatological market. The US market is dominated by medium-sized companies such as Medicis (NYSE:MRX) and Aventis (NYSE:AVE; LSE: AVN; XETRA; Paris:AVEP) subsidiary Dermik Laboratories, while L'Oreal subsidiary Galderma is one of the companies that control the rest of the world.

What have you lived on until now, and how will you survive until the royalties start flowing?

Tamarkin: "We've invested hundreds of thousands of our own money in technology and patents. We're now raising capital. Foamix has bought equipment, maintains a laboratory, and is hiring staff."

Eini: "We're currently cash positive, but we are seeking a $5 million investment, although we're prepared to begin with less. We've contacted private investors and venture capital funds. Everyone is working at their own schedule."

Is it true that private investors are returning to the market?

"We're talking to investors, and they are willing to talk to us."