Can-C and FlutiCare
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“I am very steady. I like to work slowly, but surely, to get to my goal.” Thus speaks Bassam Damaj, president and chief executive officer of San Diego’s Innovus Pharmaceuticals.

Bassam Damaj: “We need more people.”

The truth is just about the opposite. In his five years heading the company, Damaj has led Innovus on a whirlwind growth spurt at a speed I have seldom seen in 54 years covering business. Most health products companies move deliberately. Not Innovus.

Damaj took over in 2013 and publicly stated that there was very little to the company at the time. He then installed his super-growth strategy.

Randy Berholtz: “We don’t need a big sales force.”

MichaelCohen.com

At the end of last year, Innovus had a startling 28 products on the market — a dozen of which are sold around the world. Most of these are over-the-counter, nonprescription health products. Only four have been approved by the Food and Drug Administration. (By definition, over-the-counter health products have not been approved by the Food and Drug Administration.) The company intends to launch 7 to 10 more products this year.

Zestra-Glide

innovuspharma.com.jpg

Here is what should sober up shareholders: In San Diego, Innovus has a total of 12 to 15 employees, only 3 of whom are officers. A fourth executive, not an officer, is in charge of marketing. Thus, one marketing executive rides herd on 28 products, with up to 10 new ones coming this year. While third parties do all the Innovus manufacturing, and partners do partners perform other functions, one marketing executive simply cannot efficiently manage 28 products, even with the assistance of 3 officers. That’s especially true since Innovus developed more than half its products, “and we’re marketing all of them,” says Damaj.

“We need more people,” admits Damaj. Amen to that.

Of course, Innovus has employees of other companies providing services to it. That is common practice in business. There is a contract call center in Maine with 75 employees. A bulk media company places print advertising in the United States and Canada. The company does have subsidiaries: Semprae Laboratories, Beyond Human, FasTrack Pharmaceuticals, and Novalere. Still, overall, Innovus has a very thin employee base at its 8845 Rehco Road, Miramar headquarters — particularly in top management. Clearly Damaj is the dominant force.

Innovus stock trades over-the-counter and has been selling around 15 cents a share. Despite peddling all those products, the company had only $8.8 million in sales last year, although that was up from $4.8 million in 2016. The company lost $6.5 million last year, down from $13.7 million in 2016. Damaj says Innovus will double sales this year and exit the period in a profitable position. (Of course, he had predicted the company would have revenue of $10 to $17 million last year, and it fell far short of that. “We were not far from the low end of the guidance,” he maintains.)

One reason Damaj says Innovus can handle such fast growth is that he has had a lot of experience in companies. That’s true. The last chief executive job he had was with San Diego biotech Apricus Biosciences. There, among other things, he pushed two sex-related products — Vitaros, a topical erectile dysfunction preparation, and Femprox, a sexual stimulant for women. In February, the Food and Drug Administration rejected Vitaros because of deficiencies in chemistry, manufacturing control, and safety. Apricus has “shelved” Femprox, citing “dismal” sales of similar products by other companies, according to a spokesman.

Many critics think sexual stimulation products for women do not have a market and are overhyped, but Damaj disagrees. Since 2003, Innovus’s entry in that market has sold 15 million units, he says. Despite widespread skepticism, Innovus has said that 43 percent of women have experienced some sort of sexual dysfunction; the potential market is supposedly as large as the erectile dysfunction market for men. Seventy percent of women experienced a more satisfactory sexual experience from using Innovus’s Zestra sex stimulant, according to a clinical test, says Innovus.

Here is the list of Innovus products: in the sex-related area, there is Vesele for promoting sexual health; Zestra for female arousal; Zestra Glide, a lubricant; EjectDelay to treat premature ejaculation; Sensum to alleviate reduced penile sensitivity; Beyond Human, a testosterone booster; PEVarx for peak sexual performance and stamina; and Androferti to support overall male reproductive health and sperm quality.

The company has also entered the red-hot and controversial market for so-called smart pills: RecalMax for brain health. Innovus is also peddling products in widely varying fields: UriVarx for overactive bladder and urinary incontinence; ProstaGorx for prostate support; FlutiCare for allergy symptom relief; Apeaz for pain relief; AllerVarx for allergy relief; ArthriVarx for joint pain; Xyralid, a hemorrhoid cream; Can-C eye drops; Can-C capsules, an eye-care supplement; MZS, a melatonin formula to stabilize circadian rhythms and boost immunity; and Diabasens, a diabetic foot cream.

And then, under the Beyond Human label, there are ketones, krill oil, omega-3 fish oil, eagle vision formula, blood sugar, colon cleanser, green coffee extract, and growth agent.

Whew! If, as Damaj claims, Innovus has developed more than half of these products, somebody with a vast knowledge of the medical and chemical fields has moved very rapidly.

Randy Berholtz, Innovus’s executive vice president, objects to suggestions that the company is growing too fast and spreading itself too thin. “This is a supplement business,” he insists, and it is not unusual for such a company to diversify its product line widely in over-the-counter, nonprescription treatments. “We don’t need a big sales force,” he says.

To sell its products, Innovus put 88 percent of its advertising in print media last year (although that percentage dropped in the first quarter of this year). Innovus is not worried about the downward spiral of print media. “Most of our products appeal to people 65 or over, and a lot of those people still read newspapers. They are not people who go online and order from Amazon,” says Damaj.

Berholtz notes that several of the company’s products have passed extensive clinical trials, and some are patent-protected. The fact that the company is growing so fast is a positive — not something to worry about. “Growing too fast? And that’s a problem? Holy hell!” exclaims Berholtz

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Comments

Cassander April 25, 2018 @ 10:25 a.m.

About the only product missing from this list is Vitameatavegamin.

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Don Bauder April 25, 2018 @ 2:11 p.m.

dwbat; This goes back a long way. Donizetti's comic opera "Elixir of Love" revolves around a so-called medicine that gave one a buzz, mistaken for a cure, in the daytime. It premiered in 1832. The libretto is a bit silly but the music is very good. However, the concept of hootched-up patent medicine goes back centuries and makes good theater.

I had a distant great aunt who won first prize at the county fair every year for her grape juice. A traveling salesman came through one winter and wanted to buy some of that grape wine. My great aunt , horrified, threw out her stock of the stuff and never entered again. Best, Don Bauder

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SportsFan0000 April 29, 2018 @ 1:45 a.m.

How about hooched up soda...Some sodas used to contain cocaine and other drugs.

And, Parisian chemist Angelo Mariani combined coca and wine and started selling it, a butterfly did flap its wings. His Vin Marian became extremely popular

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MURPHYJUNK April 27, 2018 @ 7:49 a.m.

right up there with the anti-depressand damitall

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Don Bauder April 28, 2018 @ 6 p.m.

Murphyjunk:: Or Schitt's Cure-All. Best, Don Bauder

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Don Bauder April 25, 2018 @ 11:52 a.m.

Cassander: The trouble with a product named Vitameatavegamin is the length of name. The company spends most of its marketing dollars in newspapers. How do you squeeze Vitameatavegamin into a headline? Best, Don Bauder

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swell April 25, 2018 @ 7:32 p.m.

"…according to a clinical test, says Innovus"

And who paid for that 'clinical test'? Thank goodness I know enough now to stay far from any of their scam products. There are honest companies that develop leading edge health formulas for health based upon a wealth of research. None offer sex products, unfortunately. But those companies are vastly outnumbered by the me-too companies who jump on any theoretically useful ingredient and market the sh!t out of it.

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Don Bauder April 25, 2018 @ 8:53 p.m.

swell: Here's a comparison: Innovus had $8.8 million in sales last year with 28 products and plans to have 35 to 38 this year. Procter & Gamble had $65.1 billion -- that's billion -- in 2017 sales and 65 products. Best, Don Bauder

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swell April 26, 2018 @ 10:02 a.m.

Don Bauder: I won't be investing in either. I do invest in health supplements, quite a bit actually. But every one is founded in substantial scientific research by unbiased researchers. My sources do advertise, but responsibly and with a minimum of hype. My primary source also conducts research in association with universities worldwide via their non-profit affiliate. Their main interest is finding ways for older people to maximize health and well-being.

In contrast, it seems that Innovus is simply looking for profits using any gimmick they can think of. P&G are very good at that, as you point out.

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Don Bauder April 26, 2018 @ 11:53 a.m.

swell: (Possible conflict: I have about a thousand shares of Procter & Gamble). I followed the company carefully when I was Cleveland bureau chief for Business Week from the late 1960s to early 1970s. I was quite impressed then but couldn't buy the stock because I covered it. It has done poorly the last several years and I am sure I have lost money on it, but I think it has value at the current price. It has huge market shares worldwide in products such as soap, baby care and cosmetics.Yes, it is primarily a marketing company but spends a lot on research and development, too.

As to Innovus. I don't buy any San Diegeo stocks or bonds because of the conflict of interest. But in this case, I wouldn't touch it because I don't buy penny stocks. Also, as the column reflects, this company is growing entirely too fast. I question the efficacy of several of its products. Best, Don Bauder

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swell April 27, 2018 @ 5:54 p.m.

Don Bauder: I notice that many investors these days are interested in companies that make the world a better place. 'Green' companies, etc. And also innovative companies who expand the boundaries of what is possible. It's not just about money money money for such investors. You see a lot of that at places like Kickstarter but there are also funds that focus on such criteria. These are exciting times and this trend could make a big improvement for future generations.

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Don Bauder April 28, 2018 @ 6:05 p.m.

Swell: Yes, there are a lot of green stocks but many more greed stocks. Best, Don Bauder

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SportsFan0000 April 28, 2018 @ 1:43 a.m.

Too many products with too low sales. Marketing strategy is weak. How many of these products actually work?! Lots of questions about their products and lack of a coherent business strategy.

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Don Bauder April 28, 2018 @ 6:08 p.m.

SportsFan0000: The world has gone go-ga over brands so companies are rebranding old products and branding new ones. There's a traffic jam. Best, Don Bauder

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AlexClarke April 28, 2018 @ 9:10 a.m.

First come the products then comes the profit and then comes the lawsuits.

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Don Bauder April 28, 2018 @ 6:10 p.m.

AlexClarke: Prophets, products, profits, litigation. Best, Don Bauder

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