Editor’s note: This is the second in a series of stories profiling selected companies presenting at the CED’s annual venture conference on May 2-3.
_________________________________________________________________________________________Piedmont Pharmaceuticals is literally addressing pain points of customers with growing sales of products designed to treat a variety of maladies.
The company, which was founded in 2001, generated $4 million in revenues in 2005, and management is expecting more growth in the future.
“We are growing fast with the business expected to more than triple over next couple years,” Piedmont management told WRAL Local Tech Wire.
Piedmont will be making a presentation to potential investors at the Council for Entrepreneurial Development’s annual venture conference next week in Pinehurst (www.cednc.org/conferences/venture/2006/ ). The company has already raised $8 million from its ownership and angel investors.
Piedmont management talked about the company with LTW in a Q&A:
The momentum has picked up over the past year in many segments of venture capital. Are you finding more interest among potential investors?
Piedmont Pharmaceuticals is definitely attracting strong interest from institutional investors. While this is partly due to improved venture market conditions, in our case, the rapidly increasingly attention is due to the company’s accelerating momentum in achieving major milestones in developing our business. Since starting 4 ½ years ago, Piedmont has successfully had two products actually launched in the marketplace, is close to receiving regulatory approval in Canada, and has received FDA authorization to proceed to Phase III on our pediculicide (head lice) product in the US.
Even in a better investment climate, VCs are more demanding than ever in terms of due diligence. Why should investors be interested in your firm?
Several reasons:
What’s your “elevator pitch”?
We are a specialty pharmaceutical company focused primarily on human therapeutics in select areas including parasitology and topical treatment of infection, inflammation, and pain. We have two currently commercialized products in the global market. Piedmont has an advanced development program driving broader portfolio of human and animal health pharmaceutical products and leveraging innovative and proprietary transdermal drug-delivery technologies and unique modes of action. The company did $4.0 million total revenues in 2005 and positive EBITDA. We are growing fast with the business expected to more than triple over next couple years. Piedmont Pharmaceuticals has proven it can deliver unique protected technology that can pass through the regulatory process in a fraction of traditional time and cost.
What is the “pain point” (or points) you address for your customers?
We bring innovative, effective, safe, convenient solutions to several well-defined but underserved markets.
What makes your company unique? Do you have a proprietary and/or a patented technology?
We have extensive patents issued or filed for all of our products and technologies.
What makes your product(s) and/or services unique vs. your competition?
Competition varies by product, of course, but in general we are addressing market indications where existing therapeutics are ineffective, potentially unsafe, or both.
Does your company already generate revenue? If so, how much? Are you cash flow positive?
Piedmont was profitable last year. 2005 revenues exceeding $4 million resulted from a combination of licensing fees and product sales.
What is your target market? What is the size of that market in terms of dollars? What share of that market do you believe you can win?
The worldwide headlice market is over $250 million. The market for otitis media is over $2 billion, while the target market for non-steroidal anti-inflammatories is over $20 billion. We believe that our products can achieve significant portions of these markets ranging from 10 — 40%.
What will you do with the invested funds? What is the timeline for product delivery? If you have existing products and services, how will additional funding help you expand your company, if that is the intention, or will you develop new products?
Invested funds will be deployed to complete Phase III clinical work for regulatory approval where necessary, rapidly advance our pipeline products, and where necessary ramp sales, marketing, and business development of existing commercialized products.
What do you want from an investor other than money?
To add value through industry expertise in maximizing the potential of this business.
Why will investors be impressed with your management team?
Piedmont’s team is led by individuals who have worked together for as many as 24 years, having previously started several other successful pharmaceutical enterprises.
What is the exit strategy for the investor from your company? Are there potential strategic alliances with larger companies? Do you wish to take the company public? Or do you wish to grow the company and either sell it or acquire other companies?
The company will likely be sold to a large pharmaceutical company (in whole or in part) over the next three to five years.
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FACT BOX: Piedmont Pharmaceuticals, LLC
MISSION STATEMENT: Piedmont Pharmaceuticals is driven to quickly bring unique protected pharmaceutical products to market that offer distinct advantages in terms of safety, efficacy, and ease of use.
TYPE OF COMPANY: Pharmaceutical development
ADDRESS: 204 Muirs Chapel Road, Suite 200, Greensboro, NC 27410
PHONE NUMBER: 336-544-0320
WEB SITE: www.piedmontpharma.com
MANAGEMENT TEAM MEMBERS:
Roland Johnson, President and CEO. Roland Johnson has been involved with two other successful pharmaceutical start-ups and possesses over 20 years of expertise in the pharmaceutical industry. As a founding member of Ciba Animal Health (now Novartis Animal Health), he played a critical role in both designing and implementing the strategies, structures, and operating systems that helped the new business grow from zero to $320 million revenue. He was a vice president with Ciba until August 1996 when he departed to found Blue Ridge Pharmaceuticals. In 1998, Blue Ridge was sold to a publicly traded company, IDEXX Laboratories (earning investors a 6X return over 24 months), with Mr. Johnson remaining as president until July 2001. Mr. Johnson founded Piedmont Pharmaceuticals and Triad Specialty Products in August 2001.
Joe Dowd, MBA, Chief Financial Officer. A graduate of the University of Notre Dame with an MBA from Wake Forest University, Joe Dowd brings a diversity of business experience. He has background in a wide array of disciplines including research and development (R&D), manufacturing, operations, business development, strategic planning, business consulting, finance and accounting (including an assignment in Switzerland performing international consolidations). He spent nearly 24 years in a variety of positions with the Crop Protection Division of Ciba (now Syngenta), then joined Piedmont in September 2001. Mr. Dowd is a founding member of Piedmont Pharmaceuticals and Triad Specialty Products.
Mike Coffee, Vice President, Marketing and Sales. With 20 years of pharmaceutical experience, Mike Coffee has worked in both the human health and animal health markets. Initially working on the human side, he was with Wyeth-Ayerst Labs. In 1990, he was tapped as one of a few seasoned sales professionals to join the new start-up, Ciba Animal Health (now Novartis Animal Health). Mr. Coffee joined Blue Ridge Pharmaceuticals in January 2000 where he was director of sales until he left to join Piedmont in August 2001. Mr. Coffee is President of Triad Specialty Products and vice president of Piedmont Pharmaceuticals. Mr. Coffee was a founding member of Piedmont Pharmaceuticals and Triad Specialty Products.
BOARD MEMBERS:
Dr. Lowry Caudill — Former Co-President for Pharmaceutical Development of Cardinal Health
Dr. Al Childers — Former Co-President for Pharmaceutical Development of Cardinal Health
Ms Lynn Gaudioso — Former Global VP of Business Development, Pfizer Consumer Products
Dr. Marc Deitch — Former Sr. VP Medical Affairs & Medical Director, Wyeth Ayerst Global Pharmaceuticals
Mr. Luther Hodges, Jr. – Vice President and Director of the North Carolina Veterinary Medical Foundation, Inc.; Former Undersecretary of the U. S. Department of Commerce; Former Chairman and Chief Executive Officer of Washington Bancorporation.
INVESTORS: Company founders and various angel investors raising $8.0 million.
REVENUES: 2005 revenues of $4 million
YEAR ESTABLISHED: 2001
NUMBER OF EMPLOYEES: 9
