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By Chris Larson, Reporter, Louisville Business First

 

The view from the 12th floor in Kaden Tower — the office tower with unmistakable lacework façade in St. Matthews — overlooks as good a view as you will ever get in a suburban office tower, especially in the floor’s conference room.

But PharmaCord LLC, which previously occupied that floor along with two other floors in the tower, gave up the iconic location with a view in one of Louisville’s most coveted neighborhoods for a $50 million headquarters and operation center that it built in the red-hot River Ridge Commerce Center, an industrial park along the Ohio River in Clark County, Indiana.

The reason — the company’s rocketing growth demands much a bigger space. PharmaCord is hiring people by the dozens to manage the new business, and the new HQ checks in at 81,000-square-feet across three floors.

And even with the new digs, the company likely will have to employ a hybrid model of work — some employees in the office while some work at home — to ensure it has enough employees on staff to support its burgeoning business.

Nitin Sahney, Founder and CEO of PharmaCord, poses for a portrait in the pharmaceutical support company’s new headquarters and operations center in America Place, which is contained within River Ridge Commerce Center in Southern Indiana. Photo by Christopher Fryer. 

This rapid growth and the apparent financial success of PharmaCord combines with the diverse resume of its co-founder and CEO Nitin Sahney to make the company something quite unlike others of its age.

By all accounts, the future of the company is bright. This even includes the broader prospects of the industries its serves: the pharmaceutical and biotech industries.

The company provides patient support programs for specialty drug makers. It provides outsourced patient support programs to these industries.

However, the success of the company comes, at least to some degree in Sahney’s telling, in spite of being based in the Louisville region, not because of it. And while PharmaCord has the makings of the next big thing in Greater Louisville, it also has only one meaningful tether to the region — a region that can’t seem to hold on to some of its most promising companies.

Starting off different from most companies

Startup founders in Louisville fit one of a few familiar molds: a young professional seeking to make their career chasing passion projects; innovators who develop a better widget for the industry they’ve come up in; and some who can’t stand the concept of making money for someone else.

So many Louisville-based startups often grind out meager early-stage business all the while chasing what leads they can in terms of financing their venture, relying on someone else’s money to help fuel the business through its early losses.

Another common feature: The youth and relative inexperience of the founders.

PharmaCord is nothing like most of Louisville’s startups.

Sahney, 58, has reached the pinnacle of corporate leadership in the pharmaceutical and related services industry. He ascended the organizational chart of Cincinnati-based Omnicare Inc., then the nation’s largest institutional pharmacy, to become its CEO. There, he led a blockbuster sale of the company, one of two exits that stand as hallmarks in his career.

Jim Karp, a minority partner in PharmaCord, is the founder and CEO of the development firm America Place. He’s an experienced commercial real estate developer and entrepreneur who has contributed his real estate acumen to PharmaCord.

PharmaCord built its new headquarters and operations center in America Place, contained within River Ridge. Karp said the new headquarters will be a great addition to America place.

“It sets a precedent for other companies to come and see what we’re doing,” Karp said by phone. “River Ridge and One Southern Indiana and the government over there have been very cooperative in making these things happen and allowing for new business to move in. It’s a beautiful building — a Class A-plus building.”

Karp said his internal America Place team aided in the construction, headed up by general contractor Whittenberg Construction of Louisville.

Sahney previously described his company to me as an “experienced startup.” And Karp and Sahney are experienced in the game of starting and growing companies that make money serving pharma and biotech companies.

Karp was an owner with Sahney in RxCrossroads, which Sahney operated and sold to Omnicare. Sahney was in his mid-30s when he and Karp partnered on RxCrossroads.

Together, Sahney and Karp have funded the development of PharmaCord out of their own pockets, making the company completely independent from the demands of shareholders and investors.

“We don’t need any investors; we don’t need capital; we have been self-sufficient with cash flows for over two years,” Sahney said. “We don’t even have a line of credit with a bank. Those are the conditions we would only do it [in] because at this stage in life, you know, you don’t want to be beholden to anyone.

“So, we’ve done it our way.”

And it’s growing rapidly in many measurable ways, including apparent profitability.

Since its founding in 2017, PharmaCord has amassed 22 clients as of the writing of this article — high-market-cap pharma and biotech companies that rely on PharmaCord to, in effect, commercialize their specialty products.

And unlike other potential clients, pharma companies aren’t as cost-sensitive when it comes to paying for services that will help keep a patient using their treatment.

“It’s not about who’s the cheapest, it’s about who can get things done at a high level,” Sahney said. “Never in our lifetime have we turned down business. No one does that. We’ve actually turned down about 20% just to maintain our quality.”

These specialty products are highly developed, expensive and require a high level of attention in getting them to a patient and properly administered. They treat some of the worst and most persistent diseases whose treatments are not readily available through retail pharmacies: cancer, Parkinson’s disease and other neurological diseases, kidney diseases and any number of other chronic diseases.

The highly specialized nature of these treatments means that they require their own specialized teams to support the connection between patients, providers, insurers and the pharma companies. The products PharmaCord supports cost, on average, between $3,000 and $4,000 a month.

PharmaCord’s 22 clients translate into over 30 support program teams with 50 distinct treatments. And these teams require a workforce with skills ranging from nursing to pharmacy to insurance reimbursement expertise.

This, in turn, means a major part of the action of the business is around staffing up the support programs. Sahney described managing PharmaCord as managing several different businesses.

The company employed about 30 people in 2018, a mix of staffers, consultants and contractors. Today, the company employs about 450 in the area and is expected to grow to about 500 by the end of the year. The company has added 250 people since March 2020, the onset of the global coronavirus pandemic.

And if all goes well for the company, it could employ as many as 950 by the end of 2023.

While Sahney declined to share exact numbers, he said that the company’s revenue has tripled over the last two years and that EBITDA, a profitability measure, has grown by 400% for the same period.

One Southern Indiana President and CEO Wendy Dant Chesser said her organization is thrilled to add PharmaCord to the roster at growing River Ridge.

“A project of this caliber selecting River Ridge as the place it will further grow and prosper is not only a nod to Southern Indiana’s excellent business climate, but also is indicative of America Place’s ability to provide an exceptional facility to house that success,” Dant said by email. “One Southern Indiana congratulates all involved on this project and stands ready to assist PharmaCord’s ongoing success.”

Sahney’s work in the region

For most of the 1990s, Sahney was an executive and manager for Dublin, Ohio-based Cardinal Health Inc. (NYSE: CAH). Beginning there in September 1993, he held a number of executive roles before founding RxCrossroads LLC in Louisville in 2001.

Louisville Business First reported in 2001 that the company“provides customized product support services to pharmaceutical, biotechnology and medical-device manufacturers. Those services include sales and marketing product support, pharmacy and clinical assistance and third-party logistics,” according to previous Louisville Business First coverage a few years later.

In just four years, RxCrossroads sold to Omnicare for $235 million in 2005.

After a stint managing a health care fund, Sahney joined Omnicare as the president of the company’s specialty care group in October 2010. He earned the additional role of chief operating officer in June 2012 and president of Omnicare in September 2012.

Sahney was named CEO in June 2014, reaching the proverbial corner office of a company that brought in $6.4 billion in annual revenue in 2014, according to public securities filings.

Omnicare suffered from inner turmoil as documented by the Cincinnati media. Sahney was the fourth CEO to hold the role in just as many years; it apparently failed to build internal structures such as a human resources and legal department despite growing to its remarkable size by acquiring several companies, according to a Cincinnati Enquirer report; it was in constant court battles over allegations of submitting false claims, kickback schemes and even had a run-in with the federal government over another deal involving a Louisville-based company, according to reports from sister publication, the Cincinnati Business Courier.

The U.S. Federal Trade Commission sued Omnicare over its attempted hostile takeover of PharMerica Corp., another major institutional pharmacy provider, in January 2012. The FTC claimed that the deal was anticompetitive. The intervention caused the takeover to fall apart after Omnicare allowed its tender offer for PharMerica shares to expire about a month later.

Less than a year after Sahney took over, in May 2015, he would oversee Omnicare’s $12.7-billion sale to Woonsocket, Rhode Island-based retail pharmacy provider and pharmacy benefit manager CVS Health Corp. (NYSE: CVS).

Karp also was a partner in RXCrossroads and said the reason for the duo’s success together is simple.

“The secret is that we just get along so great and we really care about each other,” Karp said. “I’ve been an investor for him and it’s always worked out well. I love how he treats his employees and advocates for them. He’s kind of like [legendary Green Bay Packers coach] Vince Lombardi. He gets the best people and gets the best out of them.”

What ties PharmaCord to Louisville

Sahney made a meaningful part of his career in Louisville. After he left Omnicare, he moved his family back the city. He felt connected to the area and loved living here.

In creating PharmaCord, he’s done so in Louisville in spite of a key challenge for early-stage companies: not being able to find high-level executives to manage various parts of the business.

“If you look at our top seven or eight people, they’re not from Louisville,” Sahney said, adding that some of his chief lieutenants at the company commute to Louisville five days a week. This includes company CFO Patrick Lee, who commutes from Cincinnati.

So, why is the company here?

“Frankly because of me,” Sahney said.

“I could have gone and run a publicly traded company and almost did. … But my kids were younger, and I loved Louisville. I remembered living here and we’d created my first company here, and it was a good experience. So, we came back for [the] quality of life.”

All of the types of talent that he needs in his C-suites and the next layer down in the organizational chart are in the science hubs of the East and West Coast — especially Boston, New Jersey and San Francisco, areas with high concentrations of executive talent working in and around the pharmaceutical industry, Sahney said.

And Louisville — for all its marketing as a research and health care hub — pales in comparison with these cities, and Louisville’s concentration in health care is largely in the aging care industry.

“We’ve never really had pharmaceutical services around here,” he said.

“You ask me why did we return? I’d say 90% of people will not have returned to this region,” Sahney said. “They would have gone to Columbus, Ohio, where I’ve spent a lot of time: booming; Nashville: lower taxes; or even stayed in Cincinnati. So, it was purely emotionally driven to come and it worked out fine.

“But if a similar company was recruited to come here, it would just be impossible.”

PharmaCord LLC

Founded: 2017

Founder and CEO: Nitin Sahney

Headquarters: Hilton Drive, River Ridge Commerce Center, Jeffersonville, Indiana

Noncommercial pharmacy: Louisville

HQ details: 81,000 square feet across three floors; $50 million investment

Employees: 450; 500 expected by the end of the year

Number of clients: 22

Supported products: 58

The opportunity ahead of PharmaCord

The development of new drugs in the U.S. accelerated in the last 15 years or so. A public dataset from the U.S. Food and Drug Administration shows that the number of drug approvals awarded by the federal regulator increased from 20 in 2005 to 53 in 2020.

And in recent years, the number of specialty drugs meant to treat cancer or other rare or severe diseases accounted for the majority of the approvals.

However, handling the patient-support programs meant to ensure treatments are successfully delivered and administered to patients falls outside what these high-tech companies are good at, according to Tanya Shepley.

Shepley is an associate principal with the Evanston, Illinois-based global consulting and services firm ZS Associates Inc. She focuses on patient-support programs as part of the company’s patient and consumer health practice.

Patient-support programs provide connections between patients, health care providers, insurers and drug makers. And different companies provide varying supports to any combination of those constituencies.

In PharmaCord’s case, it provides the full spectrum of services to support patients and, in turn, helps drug makers ensure their products are successful in the marketplace.

“Today’s treatment experience for patients is very fragmented and frustrated,” Shepley said. “Specialty products, especially for rare diseases, they tend to involve a much more complex treatment pathway, and patients need personalized treatment supports.”

But these supports require major investment, and that might not make sense for a pharma or biotech company that needs to focus resources on research, trials, the drug-approval process, marketing or other aspects of the industry.

Outsourcing a patient-support program — especially if the drug-maker is a smaller company — allows a company to offload that part of the business. Larger companies tend to have the capacity to take on support programs in-house, Shepley said.

According to Shepley, the specialty drugs are likely to continue — if not accelerate — toward higher specialization and even personalization to specific facets of a disease within a patient. Further, more and more small or emerging companies are coming into the U.S. market with one or a small handful of treatments in development.

The acceleration of more specialty drugs and companies developing them isn’t likely to slow down any time soon.

Sahney said that PharmaCord also so far has not lost a client once they’ve taken on a contract for a patient-support program. And with the burgeoning specialty drug business, it has the opportunity to gain additional business from pharma clients as they grow their drug offerings in the market.

About PharmaCord

PharmaCord is the connector between manufacturers, patients, physicians, and payers. The company provides customized solutions to life sciences companies that span three core areas: patient support, pharmacy services and manufacturer support. These integrated services are designed to increase accessibility, clinical oversight and market acceptance of prescription therapy. Independently owned and organically built, PharmaCord is free from any competing priorities, enabling it to design and implement patient access and support programs that align with the objectives of its life sciences clients. PharmaCord’s experienced team coupled with its proprietary CORscend™ technology platform optimizes workflow to deliver improved program execution, more rapid therapy initiation and increased patient engagement. To learn more about how PharmaCord improves commercial outcomes for life sciences companies, visit pharmacord.com.

Contact:
Beth Roberts
(502) 805-3450
beth@pharmacord.com