BANKING / FINANCE

A canker and cold sore medication called Zilactin is getting its first exposure to national publicity, thanks in part to a Newport Beach firm’s innovative venture-marketing concept.

The over-the-counter medicated gel, approved by the Federal Drug Administration for use on herpes simplex I ailments, had been in development nearly 5 years and had exhausted the funds of the chronically undercapitalized Zila Pharmaceuticals in Phoenix.

The ointment is considered unique because it covers cuts and sticks to moist tissue inside the mouth for up to 8 hours, while current ointments last little more than 5 minutes, said Parker Dale, chairman of International Daleco Technologies Inc. in Newport Beach.

Dale devised a financing scheme more than a year ago to provide Zila with access to $2.3 million for marketing the ointment. Some of that money was spent over the last year for spot ads on radio stations in different parts of the country, and response helped to triple sales, he said.

Beginning Tuesday, Zila is spending the rest to help pay for a set of 30-second radio spots that started airing nationally on “The Larry King Show,” “Dr. Dean Edell Medical Minutes,” “Irving R. Levine’s Comments on the News” and “The Dr. Dean Edell Show.” The ads also air before and after “Paul Harvey News” in Phoenix, Atlanta and Chicago.

Dale’s investment partnership raised a total of $3.4 million by the time the partnership closed its fund-raising efforts in December. Besides the amount that went into marketing efforts, about $578,000 was used to pick up 35% of Zila’s stock for the partnership and the rest went to brokers and others for commissions, costs and fees in raising the funds.

Dale’s concept allows Zila to use the funds--which are kept in the partnership--without showing substantial marketing expenses on its balance sheet. And it gives the partners 10% of Zila’s gross revenues until they make back three times their investment--about $10 million.

Dale said he used his venture-marketing concept to put together another partnership that will raise $5.5 million, about a third of which would go to marketing the products of American Star Software Systems Inc. in Torrance.