It’s Tuesday, health techs.
Situational Awareness: The FDA could approve the first OTC contraceptive, a landmark decision that would increase the availability of the medication.
- Still, gaps in insurance coverage rules could make it unaffordable for some people, write our colleagues Oriana Gonzales and Caitlin Owens.
1 big thing: Empower Pharmacy is looking for investment
Empower Pharmacy, a Houston-based compounding pharmacy focused on integrated health and wellness, is seeking an investment, sources tell Sarah.
Why it matters: Private equity has a reputation for being squeamish in pharmacies compounding – and Empower’s growth profile and attractive end markets suggest it is likely to attract a lot of interest.
Send the news: Empower, led by the founder, has mandated Cantor Fitzgerald for financial advice, and reaching out to financial sponsors started early this week, sources say.
- The process could yield either a minority investment or a majority recapitalization, sources add.
By the numbers: The company, which has grown at a more than 30% clip over the past three years, is selling nearly $160 million in run-rate revenue from EBITDA in the low $30 million range, sources say.
- Revenue and EBITDA are expected to rise to about $200 million and $50 million, respectively, by 2023, they say.
Details: Empower is seeking capital to fund the development of a new 503B facility that will significantly increase its growth trajectory and capacity over the next decade, a source says.
- It already has an advanced FDA registered 503A compounding facility.
How it works: Founded in 2009 by CEO Shaun Noorian, Empower provides compounding pharmacy solutions for various health and wellness end markets.
- Empower offers customizable medicines for women’s, men’s health, fertility, hormone replacement, weight management, dermatology, and IV therapy (nutrition, vitamin B12, etc.).
- The company delivers to patients and healthcare providers in all 50 states with an average turnaround time of 24 hours, according to its website.
- According to a press release from mid-2021, more than 2,000 custom-made drugs are possible.
Situation: Empower is unique in its end-market focus areas, but private equity participation in compounding pharmacy is not new.
- In January 2021, Vistria Group and Excellere Partners invested in SCA Pharmaceuticals, an FDA-registered compounding pharmacy. The deal resulted in an exit for Enhanced Healthcare Partners.
- Welsh, Carson, Anderson & Stowe acquired a majority stake in Leiters, an FDA-regulated 503B outsourced pharmaceutical compounding company, in November 2021 from investors including Kaiser Permanente Ventures and Frazier Healthcare Partners.
- In 2015, Bain acquired QuVa Pharma, a 503B manufacturer of compound, ready-to-use injectables, from Helix. Goldman Sachs Private Credit and Owl Rock Capital Partners injected $275 million in debt financing into the company in May 2021.
💭 Our Thought Bubble: Given Bain’s seven-year shelf life, QuVa also seems ripe for potential harvest.
Empower did not immediately return a request for comment, while Cantor declined to comment.