TFS shares hit a record high after Nestle-owned Galderma was confirmed as the dermatology company behind a breakthrough supply agreement.
TFS founder and chief executive Frank Wilson named Galderma at an investor conference in Boston where he talked up the prospects of the Indian sandalwood producer sharing in the billion of dollars spent on dermatology products each year.
TFS shares closed 17ï¿½ higher at $1.99 yesterday after Mr Wilson revealed the involvement of what is regarded as one of the world's biggest dermatology companies.
Under a long-term supply deal, TFS will supply pharmaceut- ical-grade sandalwood oil at $US4500/kg.
In his presentation, Mr Wilson said TFS's first commercial harvest of plantations on the Ord River irrigation scheme had produced the high-grade oil.
TFS has already shipped 470kg of oil valued at $2.3 million to the US.
It is being used in commercial scale production trials for skincare products set to hit the US market by the middle of next year.
Galderma has entered into a licence agreement with Santalis, a joint venture between TFS and ViroXis, which is understood to involve the production of acne and eczema treatments.
Perth-based TFS is the world's only supplier of pharmaceutical- grade sandalwood oil. Mr Wilson believes Galderma has the potential to take a big proportion of the oil produced from trees on 9000ha of plantations it manages in northern Australia.
TFS owns 2900ha, 3300ha are owned by institutional investors and the remainder by managed investment scheme growers.