Researchers in recent days have petitioned the U.S. Food and Drug Administration to ban from shelves all sunscreens that contain the active ingredient octocrylene.
Octocrylene degrades into benzophenone, and benzophenone is a suspected carcinogen. That isn’t the whole of the health issue: benzophenone can also interfere with key hormones and with reproductive organs.
Nevertheless, the size of the market has been estimated as half a billion dollars annually in the United States.
Controversy over the chemicals in Coppertone of Banana Boat may be redound to the benefit of the marketers of organic alternatives, such as Boissance, the flagship product of Amyris (NASDAQ: AMYS).
Boissance has set a pace that will let it make $180 million in sales this year. In the second quarter of 2021, largely on the basis of sales in southeast Asia and Australia, Boissance showed the highest quarterly revenue of the brand’s history. This is only a small portion (roughly 1.4%) of the global market Yet it is enough to show that Boissance and other organic alternative achieved visibility and offer consumers a choice.
Carcinogens in Sunscreens: How Risky Are They?
Several widely used sunscreens were targeted in May by a petition to the FDA from Valisure, an independent laboratory. The Valisure petition found benzene in a number of products. As a consequence, Johnson & Johnson recalled five brands of its Neutrogena and Aveeno aerosol sunscreens after the release of that report.
In the last year with pre-Covid crowded summer beaches, Neutrogena’s Ultra Sheer — one of the brands affected by this years recall, sold $116.5 million in the United States, making it the leading brand in the market.
It isn’t clear yet how the benzene that Valisure found entered that or the other affected those products.
The stock price of Johnson & Johnson (NYSE: JNJ) has been unfazed by sunscreen-related developments. Indeed, JNJ has such a broad product portfolio that it would be almost impossible to trace the impact of such a development at the level of overall corporate performance and stock value.
Over a one-month period between May 20 and June 20 the price of JNJ did decline. But if one wants to relate that fact to headlines, one would start with the fact that JNJ makes the one-shot Covid vaccine, and that it has been on the receiving end of bad publicity over certain side effects of its Covid shots and over production difficulties in a Baltimore plant.
At any rate, JNJ has since more than made up for the ground it lost during that period.
Consider Beiersdorf, in much the same light. Beiersdorf, a Germany based skincare company, bought the rights to Coppertone from Bayer in 2019.
Coppertone was not implicated in the benzene scare of May. But it is one of the brands that contain octocrylene, so it is implicated in the issue raised by Craig Downs, executive director of the nonprofit Haereticus Environmental Laboratory in the August petition. On Monday, after the Haereticus announcement, Beiersdorf’s stock (BEI.TI) fell 1% at close of trading. That may be for utterly unrelated reasons or it may be a “random walk.”
Haereticus also found octocrylene in Banana Boat SPF 50 lotion, which is produced by Edgewell Personal Care (NYSE: EPC).
Edgewell’s stock rose sharply on August 5 upon a solid quarterly earnings report. Its value has remained steady since, with no sign of harm from sunscreen related news.
Are The Reports Impacting Sales?
So far there is little or no sign that concerns about the chemical composition of sunscreens are harming any of the company’s that might be involved. Over a broader period of time, worries could spread among the consuming public, and that could show up on various corporate balance sheet and, in turn, in the price.
Should such concerns spread, there are makers of organic sunscreen who could stand to profit.
Among the prominent brands in the field are: Saie Sunvisor Moisturizing Sunscreen SPF 35, from Sephora; Eleven by Venus Unrivalled Sun Serum, branded by the tennis star Venus Williams; and Josh Rosebrook Nutrient Day Cream, a moisturizer that doubles as a sunscreen.