Three Keys to Success as a Pharmaceutical Entrepreneur

58

Success in the over-the-counter pharmaceutical market can seem unattainable for independent drug inventors and entrepreneurs. Shelves are stocked with brands so dominant they define generics and competitors. People with headaches are as likely to ask for Tylenol as for acetaminophen. These household brands are owned by some of the world’s largest companies, and with massive drug development and marketing budgets, they can control the marketplace. Nonetheless, people with cold sores ask for RELEEV®, a brand built entrepreneurially by the inventor of its formula. This trusted treatment is available in Walgreens, CVS, Rite Aid, and other drug stores. RELEEV’s success points to three essential tips for growth in the crowded over-the-counter space: Invest in the product early and often, optimize by streamlining, and understand a product’s value to the customer.

Invest in the Product Early and Often

The first investment in the product was an investment in an entrepreneur’s expertise. Meryl Squires, CEO of Merix Pharmaceuticals, developed an expansive expertise in pharmaceutical OTC solutions drawn from the natural world with over four decades of study and research. However, the invention of the formula in Merix’ flagship product RELEEV did not begin in a laboratory. It was born of necessity. Contracting her first cold sore in 1987 at the age of 36, Squires suffered serious outbreaks monthly. Her academic background was in microbiology, but she also had a passion for phyto-pharmacology, plant-based medicine. She did not like the potential side effects of the new antiviral coming to market and wanted a more natural product. Utilizing her knowledge of plant medicine, she began testing numerous botanical formulas using herself as the test subject. After eighteen months, without success, she recalled an experience from several years earlier.

A hike through the American West was planned for her and her three daughters. As a mother, she studied numerous journals in preparation. She wanted to have a treatment for any illness or injury that might befall her children. On the trail, though, Squires suffered an infected blister herself. She turned to Echinacea purpurea, the purple cornflower which grew wild on the prairie around them and was known in the journals to treat snake bites. She decided to try it as her toe was extremely painful. This botanical poultice ended her infection overnight. The speed of the treatment left an impression. Recalling this, she began experimenting with Echinacea as a treatment for Herpes Simplex Virus. According to the Centers for Disease Control, 47.8% of Americans between 14 and 49 have HSV-1 and 11.9% have HSV-2, and each type can cause cold sores and certain canker sores.[1] Squires began her independent research with the hope of finding a drug that would quickly heal the painful and unsightly sores. When applying Echinacea to her cold sore she felt the first hint of relief. Hoping to improve on that relief, she tried various compounds. One day, feeling inspired, she mixed it with an antiseptic used on cuts and scrapes when she was a child. It was that mixture combining Echinacea with benzalkonium chloride that produced amazing results. Trying this new formula on her cold sore, the results were immediate. “In mere minutes, the pain stopped and swelling began to recede, so I reapplied the mixture,” she remembers. “My cold sore outbreak was gone the next morning when in times past it would have lasted two weeks. The results were amazing.”

So, the key element of the RELEEV product—the formula—was invented. “It became my mission to bring this formula to other people who suffered from cold sores the way I did,” says Squires. But Squires understood that the product needed more than efficacy to succeed. Knowing that anecdotal evidence would not be enough to convince the public or to achieve approval on the market, Squires invested in research before any revenue stream could be established. To do this, she took a multi-step approach, leveraging local resources. Her first step was the local college affiliated with the University of Chicago, where she was a tutor and knew the biology professors who reviewed and supported her preliminary research of her new herpes treatment formula. “This research was important, because I needed to prove the concept, and I needed that preliminary research in order to knock on the door of a research institution,” Squires explains. “I also wanted to prove its efficacy to myself, thinking perhaps my experience with it was just a fluke.” Several students at the college volunteered to test the new formula and they reported the same astonishing results – the formula eased pain in minutes and healed their cold sores in twenty-four hours. “That’s when I knew then that I really had something,” Squires recalls. Squires needed to convert the results of this limited research into a more robust research program. Starting with in vitro testing, she contacted a lead laboratory researcher on the herpes virus at The University of Chicago, offering her formula for evaluation. He was receptive, but to ensure the formula got tested quickly, Squires wanted to get the samples of formula to him quickly. “I told him, ‘I’ll be in the neighborhood so I can drop it off for you,’” and her highly personal approach worked. “I talked with him on a Monday, met with him on a Tuesday, he called me on Friday, and said, ‘What is this stuff?  I’ve never seen anything work at killing the herpes virus like this product.’” Of course, the research program was still costly for a business without a revenue, but the research proved the formula’s efficacy against the herpes virus. Although Squires was offered a full fellowship to the University of Chicago for her research, to accept the position would have required giving the research to them. She instead decided to get a patent on her new invention. She personally researched all of the materials to apply for her patents and helped to write it. “It was 1994. The internet did not have patent research sites yet. Instead, I travelled to the downtown Chicago library to use its repository to study patents and research ‘prior art’ for my own patent,” she recounts.

But there was still more to be done. Never having worked in the industry, Squires needed to learn how to bring her formula to market.  

Squires studied the FDA OTC Monograph that permitted product to go to market, then invested in product development which built on the basics of an efficacious formula. She had already developed a paste, which worked well, but was not commercially viable to the inventor. “It was a very messy serum,” she says, “that could not go to market.” She originally sold the serum to the natural product market under the name ViraMedx. “[Natural product consumers] loved it, it just wasn’t ready for mass distribution since it was too unrefined for the average consumer.” For three years, Squires focused on refining the product, challenge testing it for shelf life, and, critically, maintaining its efficacy. She formed Merix Pharmaceutical Corporation in 1998 to bring her product to national retail and finally, in 1999, she developed a consistency that was more marketable. However, as an inventor and entrepreneur, her work was not complete. “I did a market analysis and saw it would make sense, so I changed the name ViraMedx to RELEEV, as it was more marketable, and I redesigned the whole package,” she says. One major change was to put the product on a peg package for stores. This careful attention to the characteristics both of the product itself and of its brand positioned RELEEV for success with buyers from major drug store chains.

Stay Streamlined

“It took me many years to realize I’m really an entrepreneur,” says Squires, who says she did not even realize it when she was a finalist for the Ernst and Young Entrepreneur of the Year Award. She explains that she was motivated by her mission to help people who suffer from cold sores. “I was so busy running the day to day business to accomplish that mission, I wasn’t aware of the major business it was becoming.”

In 1997, she identified the internet as an affordable and important medium for connecting with buyers, building a highly successful site through Yahoo store in 1998 and servicing orders herself. “In the beginning I worked out of my home. I worked every day and every day I learned something new. At night I studied, usually the FDA OTC monographs. My first sales were in early 1998 on my new internet store. I would package the product in my basement and take them to the post office at 4:30 PM daily,” she says. “I ran the business like that for three years.”

She also personally managed marketing and advertising. So she advertised. Writing the radio ads herself, she developed a regional radio advertising strategy. The entrepreneur boosted the brand’s visibility in metropolitan areas and sales accelerated.

Believing her product and fledgling business were bigger than a home business, in 2000, Squires took a huge step, moving into office space and hiring employees. 

However, Squires understood she could not do everything that needed to happen in order to bring RELEEV to as many people as possible. When the opportunity presented itself, Squires collaborated with consumer goods sales specialists for placing products in chain drug stores. 

Value Your Product Like Your Customer Does

Still, there is a major distinction between consulting expertise and capitulating to the orthodoxies of experts. By the time Squires decided to hire a firm to sell RELEEV into national retail drug store chains and oversee a network of sales representatives, she had been working with RELEEV and its previous iterations for a decade. From her proximity to the customer at all times, from owning and operating an online store, she understood the value that customers placed on RELEEV. The experts she hired offered experience in distribution and sales, and when the question of pricing was raised the two spheres of expertise yielded a disagreement.

“They wanted me to bring my retail price down to $6.99 and I said, ‘absolutely not.’” She said, “I won’t be able to afford to stay in business at that price.” That price point was identified largely by comparison to products claiming to serve a similar function. However, RELEEV had been sold for years with success. Squires stood firm, telling them “this really works I’m not going to put this at the same pricing with other products that don’t work.” Her method for determining a price point departed from the sales consultants.  “I chose the price point by asking people ‘if you found a product that healed your cold sore extremely fast – in as little as one day, how much would you pay for it?’ Although a few said ‘anything’ most feedback was ‘$20.00.’ That’s how I knew what the price should be.” 

The price stayed high relative to competitors, and the introduction of the product to more and more stores elevated the risk of a miscalculation. One Rite Aid buyer even told Squires, “I’m going to put RELEEV in but it better work and if it doesn’t you have a problem with me.” Fortunately, the price point proved successful and sales grew. One unexpected advantage of the higher price point would not reveal itself for several years, though. When the recession of 2008 began, many national retailers implemented a strategy of SKU rationalization. This strategy severely limited the number of product pieces on each peg. This change drastically reduced customer access to products, which would sell out of stock. Merix weathered these changes; the price point helped consumers believe that RELEEV is a more effective product, and those consumers remained loyal to RELEEV.

Over the years, in vitro testing demonstrated Viracea (the Echinacea-based formula in RELEEV) has broad antiviral and antibacterial activity and a double blind, placebo controlled, clinical trial proved RELEEV (Viracea) is the fastest healing cold sore treatment known.

Often individuals starting a business can mistake a business challenge as a business ending. For example, they may conclude that ‘this situation cannot be handled without growing my team, and I cannot afford to grow my team.’ Squires avoided this trap spectacularly by relying on her own willingness to adapt and learn new aspects of her business as they occurred, as well as having a sense for when to rely on outside contractors.

Indeed, the example of Merix Pharmaceutical Corporation’s success with its RELEEV 1 Day Cold Sore Symptom Treatment points to a host of valuable lessons. Chief among these are to invest wisely in the product before entering a market too hastily; avoid unnecessary expenditures by doing work yourself, remaining agile and flexible developing beneficial business relationships; and knowing the value of a product to its users. Most of all, however, Merix CEO Meryl Squires is convinced that the corporation’s success would have been impossible without a particular source of motivation and that is the “why.” “Entrepreneurs must have a clear why – a mission. It’s the mission that will get you up early, keep you up late, and give you a purpose that will see you through the challenging times. If they don’t have a clear why they won’t make it through adversity.” Squires offers, “Mine was to help people who are suffering.”

LEAVE A REPLY

Please enter your comment!
Please enter your name here

5 × three =

This site uses Akismet to reduce spam. Learn how your comment data is processed.