In an effort to become the preeminent supplier to the health practitioner market, several small nutraceutical companies have joined forces to form Integrative Therapeutics, Wilsonville, OR, a brand new company that offers a broad range of science-based supplement products. The company is made up of the former Tyler Encapsulations, NF Formulas and the PhytoPharmica line of Enzymatic Therapy.
Explaining the background behind the deal, company vice president and chief financial officer Daniel Boverman, whose background is with Tyler, commented, "We saw potential in the health practitioner channel, but we were undercapitalized. Rather than seek venture capital, we thought it made more sense to consolidate." The company then linked up with NF with the goal of putting together a group of key suppliers to the health practitioner channel.
When Enzymatic Therapy became involved, said Mr. Boverman, this gave the deal the size to attract larger banking firms and at that point, Northcastle Partners agreed to finance the merger. The final transaction, which included the recapitalization of Enzymatic Therapy, closed at the end of March and the companies are now completing the strategic planning process.
The business is set up to include Tyler Encapsulations, the PhytoPharmica line of Enzymatic Therapy and NF Formulas; it will not incorporate Enzymatic Therapy's retail business. Chief executive officer Derek Hall explained further, "We intend to integrate our back offices to bring better service to our customers, but we will maintain the identity of the individual brands. We have three catalogs and three sales forces, but we want to be a one-stop shopping source." The Tyler and NF plants will be combined into the Wilsonville, OR location, but Enzymatic Therapy will remain in Wisconsin.
The product lines of the three companies are quite different, said Mr. Hall, with Tyler concentrating on proprietary products for areas such as cancer and gastrointestinal disorders, while NF has a much broader line that includes traditional Chinese medicine and single ingredient products. Enzymatic Therapy's line has more similarity to its retail offerings.
While the brands may remain separate, Mr. Hall reported that Integrative Therapeutics has defined the company's overall image. "We want to look like a pharmaceutical company," he said. "We will be GMP-certified and we want to have pharmaceutical grade standards. We are taking the high road in terms of quality. We are also constantly searching for research and development to develop proprietary formulas. The more girth we get, the easier it will be to attract the good science that's out there," he commented. "We will also be able to obtain economies of scale in a maturing market and meet the needs of doctors that want to see clinical trials."
Integrative Therapeutics has also partnered with AllScripts, which provides a complete turnkey system for doctors to handle prescriptions; the system is also working with supplements. "Doctors are very open to the idea of supplements, but they need training," said Mr. Boverman. "We are basically selling pharmaceuticals that are non-ledgered."
For the future, the company remains active on the M&A scene. One company is under a letter of intent and expected to close in the next few weeks and Integrative Therapeutics continues to look for more like-minded companies to broaden its scope. -E.S.