We intend to build a nationwide network of compounding pharmacies, primarily by the acquisition of smaller operations regionally, with new marketing provided by a centralized sales and marketing center. True Nature Pharmacy will be our centralized sales operation, leaving the local identities on those business we acquire.

One of our key strategies is the use of compounding pharmacies to formulate our proprietary compounded drug formulations and distribute them to physicians and patients. Compounding pharmacies work with physicians to develop customized medications for individually identified patients, and the compounding pharmacy prepares these customized formulations upon receipt of a physician prescription for an individual patient. Examples of compounded formulations include medications with alternative dosage strengths or unique dosage forms, such as topical creams or gels, suspensions or solutions with more tolerable drug delivery vehicles. A physician may also work together with a pharmacist to repurpose or reformulate via the compounding process drugs that have been approved by the U.S. Food & Drug Association (FDA) to meet a patient’s specific medical needs.

The compounding pharmacy business has the potential to provide high margins to the operator, and allow the operator to specialize is certain solutions for specific maladies, so it can target specific markets efficiently. The veterinary profession is particularly interesting as it faces less regulation than human pharmacy, and there is a growing number of pet owners worldwide.

We intend to focus on the acquisition of compounders who have a) a large client base in the veterinary area, b) a strong set of proprietary compounding solutions, versus non-proprietary “over-the-counter” (OTC) medicine sales, and c) where the combination of incremental operations will allow cross selling of a growing line of proprietary compounds into the respective markets of each new market participant acquired.

We expect economies of scale from the consolidation of:

  1. Materials procurement;
  2. Compounding activities combined into larger, more efficient and higher quality facilities;
  3. Expanded marketing nationwide with an emphasis on densely populated urban areas where an expanded product line may increase the profitability of each individual branch, when compared to pre-acquisition sales, and;
  4. Consolidated administration and personnel functions.

We expect to be able to rapidly scale this business with a combination of acquisitions and organic growth. The concept is that a national organization can more effectively leverage broad based marketing of their products, and that the catalog of specialized compounds will grow as acquisitions are completed. Further, we expect to create locations that have better capabilities for certain types of compounding and preparation processes, such as sterile liquid, encapsulated or complex formulation packaging. Those locations are expected to be developed as the acquisitions are increased regionally, to keep delivery and labor costs minimum. An ideal acquisition target will have 50%, or better, of their historical revenue aimed at the veterinary business area, and 50%, or better of their historical revenue will be attributable to their compounding library.

Development and Commercialization Pathway

Our model for the selection and development of proprietary formulations will focus on assessing new development opportunities using a four-step proprietary process, which includes the identification, evaluation, validation, and ultimately commercialization of selected opportunities. Our relationships with inventive physicians and pharmacists provide us with access to numerous formulation candidates and technologies to evaluate and validate. These compounded drug formulations are initially made for individual patients and are developed based on the physician’s and pharmacist’s experience formulating a new therapy to address an unmet need. As a result of our review process, we will focus our commercialization efforts on a select group of promising formulations that we believe may be patentable and that could have broad appeal to patients and physicians.

Our innovation model, which will serve as our research and development pipeline, will rely on our relationships and partnerships with inventors to identify and secure new development assets. We intend to be strategically attentive to the ideas generated by pharmacists dealing directly with doctors and their patients to address specific and often unmet patient needs in our identification of formulations to develop and commercialize. We believe that going forward, our growing group of collaborative relationships with physicians and pharmacists will bring additional clinically and commercially relevant formulation opportunities to our Company for potential development.

After we have identified potential formulations and technology for development, we subject them to our proprietary evaluation process. We may invest heavily in intellectual property review and analysis at this stage, which includes analyzing each formulation with a focus on understanding the surrounding intellectual property landscape. We will also evaluate any existing supportive clinical data, seeking to identify one or more commercialization pathways to efficiently and profitably make the therapy available to patients and, for superior candidates, ultimately seek to acquire development rights through ownership or licensing of promising formulations.

Following the identification and evaluation process and our acquisition of development rights, we seek to validate and support potential drug formulations through our review of existing clinical data and documented patient experience and through our support of investigator-initiated studies, which are typically funded by us and conducted by leading physician groups. Any clinical data we obtain may be used to support clinical confidence for physicians prescribing the formulation in compounded form or, if we decide to pursue FDA approval for a particular candidate, to support a development program in connection with the pursuit of such approval. The costs associated with our validation approach may be significantly lower than a traditional FDA approval process because, to the extent we consider and select a commercialization pathway as a compounded formulation, our approach would not require FDA approval for the marketing and sale of the formulation.

Following successful results in the first three steps of our assessment, we will focus on commercialization. As part of the development of potential formulations, we evaluate and select an appropriate commercialization pathway to make these therapies available to patients. We will consider multiple commercialization pathways, including dispensing formulations through compounding pharmacies and other prescription dispensing facilities pursuant to a prescription for an individually identified patient and pursuing FDA approval to market and sell a drug formulation or technology. We are pursuing, and expect to continue to pursue, a compounding commercialization strategy for all proprietary formulations and the other assets that we may acquire, and that we may develop in the future, and we do not presently expect to pursue FDA approval for any of these formulations or other assets. For any non-drug assets we consider, such as drug-delivery vehicles, we may choose to seek partnerships with wholesalers in order to make these technologies available to pharmacies. Depending on the selected commercialization pathway, we would build, or contract with a third party to build, appropriately targeted commercialization teams in order to make the therapies available to physicians and patients.

According to industry reports, there are over 5,500 compounding pharmaceutical groups in the market today, whose total revenue is over $5.6 billion annually, with profits exceeding $1.5 billion. Many of them are small, undercapitalized and without an exit strategy as their principals seek to retire, or face challenges with changes in the regulatory requirements. We do not currently have any acquisitions under contract, though we have identified a number of prospects and expect to be able to close one, or more, acquisitions within six (6) months. We intend to use debt to finance our initial transactions, and we have identified a number of institutional investors who have expressed interest in our approach. We expect to offer units in the Company in a Regulation D offering, to raise the funds necessary to begin the business plan. After the initial acquisition, we intend to merge with an existing, publicly traded company which is listed on the Over the Counter (OTC) Marketplace, and as a result, become a reporting company through an equity exchange transaction.

Subsequently, we expect to register the shares of the Company using a Form S-1. If we qualify, we would like to list the shares of the Company on the NASDAQ stock exchange, and create a market for the shares so that we can complete additional funding, pay off the debt we use to complete the initial acquisitions, and invest further in the businesses to achieve a greater size and scale.