I founded the company in 2009 in a very serendipitous manner. I got introduced to this industry as a patient. My background however is not as a pharmacist, as most people in this industry are. I'm actually a mechanical engineer and became a mechanical engineer because my love of cars. My father owned a go kart track, and when I saw a bunch of broken go karts, I just started taking them apart, making them faster, I guess I had the engineering and knew from a very young age.
When I graduated from UT Austin from their mechanical engineering program, I wanted to go work for a car company. Unfortunately, I couldn't get a job working in the in the car industry, and ended up working in oil and gas.
I got a job working for Schlumberger as hydraulic fracturing engineer. About nine months in the job, when I was rigging up with my crew, I lifted a heavy piece of metal the wrong way and hemorrhaged my L three through my L six.
I ended up going to physical therapy, and the doctor that was treating me, but I couldn’t gain muscle mass back. We uncovered that I had the same level of testosterone as an eight-year-old and thanks to my doctors at Baylor College of Medicine, it was soon determined that I have a pituitary disorder. I don't create the chemical signals to tell my body to take to make testosterone and so they put me on testosterone replacement therapy, and it completely changed my life.
I gained 10 pounds of muscle practically overnight without even having to workout. And I got more libido, stamina, endurance, motivation, ambition, all the things that are linked to testosterone. I was very interested in these medications I was taking, and I was actually getting them from a local compounding pharmacy here in Houston. However, I was not very satisfied with the experience to say the least. Imagine waiting two weeks to fill your prescription. This was not ideal. There wasn't really a quality system in place. And as I learned more about the industry, it turned out that the medication cost about $1, and they were charging me $200.
This is why I decided to start my own pharmacy. I took my $25,000 of savings, rented an exam room in the back of a doctor's office, and converted it into a pharmacy. I then hired a pharmacist, registered myself as a pharmacy technician and got to work getting patients like myself what I would want from a compounding pharmacy. The goal was investing in quality systems, service systems, an always improving the patient experience.
When I started, I never imagined the growth we'd experience. We soon outgrew the 150 sq ft space and moved to a 1,500 sq ft one. And as more out-of-state doctors wanted our services, we obtained licenses in multiple states.
And then in 2012, a tragic outbreak caused by a compounding pharmacy led to 65 deaths and 700 injuries. This led President Obama in 2013 to pass the Drug Quality Security Act, giving FDA jurisdiction over pharmacy practices.
Being an engineer-run company, we implemented quality systems and built an FDA-registered outsourcing facility, while the rest of the industry struggled. In 2016, we moved to the new facility, which allowed us to scale, preventing capacity and quality issues. As a 503B outsourcing facility, we could serve both practitioners and their patients, becoming a one-stop-shop for them.And as the compounding industry grew, stricter quality standards led to many pharmacies shutting down, driving more clients to us. Today, we serve about 17,000 prescribers and millions of patients, and we continue to grow.
We focus 100% on prescription-based compounding, avoiding competition with retail pharmacies in the over-the-counter market. This approach has proven to be a good business model, allowing us to excel in what we do without competing against big names like Walmart, Walgreens, or CVS.
Our expertise lies in cash-based preventive medicine, which isn't typically covered by insurance. Many integrative health therapies can't be filled at regular pharmacies due to cost or lack of customization. Unlike traditional pharmacies that mainly repackage medications, we are the entire supply chain: manufacturer, distributor, and pharmacy, creating a one-stop-shop model.
Our customer base is loyal and consistent, as we are often the only pharmacy able to fulfill their specific medication needs. And our patients require these chronic therapies for life, resulting in repeat customers. By offering life-improving medications, we help our patients maintain a better quality of life.
Believe it or not, for the first seven years, we didn't have a dedicated salesforce. We grew through word of mouth and reputation, as few pharmacies could match our quality and service. Today's patients expect fast turnaround times and next-day deliveries, which we have always prioritized, ensuring our service levels are as high as our quality levels.
And thanks to our size and economies of scale, we’re able to provide top-notch service and quality at lower costs than other compounding pharmacies. Despite having a higher overhead with 630 employees, we benefit from lower costs by ordering raw ingredients in large quantities and producing larger batches, and this allows us to offer medications at an attractive price point for our customers.
Same thing that’s always kept me up at night. Maintaining capacity to meet growing demand is what keeps me up at night. We constantly raise capital to build new facilities that can handle the increasing demand. And as the largest compounding pharmacy in the country, we only account for 2% of compounded revenue, so there's significant room for growth. To fulfill prescriptions, we must build facilities capable of handling 20 times our current volume since our script count doubles every year.
Planning for future facilities, systems, and equipment needed to sustain this growth is crucial. Over 13 years, we've built four facilities, and the capital we raise will go towards constructing the next one to continue scaling and meeting demand. This cycle of planning and building is essential for our ongoing success.
Yeah, it's a great question. You know, I sit on the board of our trade association. And so I know all our competitors, we're all we're all very close friends, and I don't think of them as competitors. Big Pharma is our true competitor, as only one in ten prescriptions are filled through a compounding pharmacy. We work together with other compounding pharmacies to expand access to quality, affordable medicine. To compete with Big Pharma, we offer lower costs and increase our prices less frequently. Our custom therapies cater to individual patients or patient populations, unlike Big Pharma's one-size-fits-all approach. As an entire supply chain, we provide a tailored experience for patients, prescribers, and institutions.
Traditional retail pharmacies can't offer the same level of customization and personalized attention, because we understand the specific therapies our patients are on and can counsel them better. We work closely with prescribers to create a seamless experience for patients, offer custom packaging and branding, and ensure patients have a positive experience, which is why our churn rate is low, with only 2% of patients leaving our service to use a traditional pharmacy.
Success, for me, is defined by the number of patients we can serve and help. My vision has always been to expand access to quality, affordable medicine for patients like myself. With millions of people eventually needing hormone replacement therapy and considering the unhealthy lifestyle prevalent in the United States, my goal is to help as many people as possible. My measure of success is also constantly evolving, but focused on helping more people. Through a combination of luck and hard work, we have managed to help more people than any other compounding pharmacy in the history of this country. And as we continue to find new ways to manufacture and distribute medicines, we aim to enter various markets, including the hospital market, to further expand our reach and help more patients.
Ultimately, what makes a company successful is its ability to adapt, grow, and add value wherever opportunities arise, always with the primary focus on helping and serving more people.
I would say, don't be afraid to take risks and always look for that next level. Embrace the unknown, even if it's something you're doing for the first time. If you believe you can add value and help others, you're likely to be successful.
Another piece of advice is to do something you enjoy. If you love what you do, it won't feel like work, and you'll be willing to put in the time and effort to make it successful. Make a list of what you enjoy doing, what you're good at, and where you think you can add value. If you find similarities across all three categories, that's the direction you should pursue. When you're passionate about what you do and confident in your abilities, success is more likely to follow.
