Apothecary by Design is selling off its retail pharmacy to better focus on its growing specialty medications business.
The retail pharmacy, located at 84 Marginal Way, will be sold to a local partnership that includes two employees and rebranded as Coastal Pharmacy & Wellness once the transaction is complete. The business will continue to operate as an independent compounding pharmacy, nutraceutical provider and coffee shop.
“We think this will be a seamless transition,” said Mark McAuliffe, Apothecary’s chief executive. “Customers won’t notice any changes in services offered.”
The split will allow Apothecary by Design to focus on its specialty medications and compounding business, which has experienced significant growth over the past two years. The specialty division, which operates from 141 Preble St., provides services regionally and nationally to patients with chronic, complex diseases such as infertility, AIDS, hepatitis C and organ transplants.
“This definitely allows us to focus on the specialty part of the business, where the growth is,” McAuliffe said. “We will be looking to expand and acquire additional specialty pharmacies.”
In September, BelHealth Investment Partners acquired a controlling interest in Apothecary by Design, to position it as the corporate parent for other specialty pharmacies that the New York investment firm intends to acquire. McAuliffe said there are two or three specialty pharmacies they are looking at now in various stages of review.
“What we want to do is create a regional network of specialty pharmacies,” he said. The company is considering specialty pharmacies along the East Coast and toward the Midwest as potential acquisitions, he said.
The private equity firm has experience in the specialty pharmacy sector, having previously acquired Aureus and Linden Care specialty pharmacies. It acquired Apothecary with the intent of capitalizing the $2 billion-a-year-and-growing fertility industry.
“(Apothecary by Design) is well-positioned in the fragmented fertility segment of the pharmacy market and we look forward to establishing the company as the pre-eminent specialty pharmacy in the U.S. specializing in women’s health,” BelHealth Managing Director Nathan Kronforst said in a statement released at the time of the acquisition.
McAuliffe said that although Apothecary by Design is already a specialty pharmacy leader in women’s health, it expects to continue developing expertise in other diseases and conditions.
Apothecary provides case management services, as well as specialty compounding services, and advocacy for people suffering from complex and chronic conditions. With specialty medications typically costing $3,000 per patient per month, the staff also assists with insurance authorization and patient benefits, to optimize treatment at the lowest possible cost, according to its website.
Terms of the sale of the retail division were not disclosed, but McAuliffe said he expects the deal will close by Feb. 29.
When it does, the retail operation will be owned and operated by Joe Lorello, a compounding pharmacist and co-founder of Apothecary by Design; Cassi Brooks, currently the operations manager for the company’s retail and compounding pharmacy; and Stephen Drapeau, who has practiced as a pharmacist for 20 years, most recently in South Portland. The retail pharmacy employs about 25 people.
“We are most excited about the endless opportunities that lie ahead of the entire team,” Brooks said of the impending change. “We look forward to building upon the relationships that have already been created.”
She said the new owners will work with a local lender to help with financing needs.
McAuliffe said he was delighted that BelHealth saw the value in having the retail operation stay with one of the company founders and continue to serve its established clientele.
“They were very supportive of 84 Marginal Way, wanting to retain those jobs and continuity of services,” he said.
The specialty division, which employs about 80, has already begun hiring to support its expected growth. It recently hired a director of information technology and is looking for a vice president of sales and other key positions.
Since its founding in 2008 as an independent, compounding pharmacy, Apothecary by Design has experienced exponential growth. In 2009, the company reported sales of $3.6 million, which grew to about $90 million in 2014.
McAuliffe said the company closed out 2015 with more than $166 million in sales. It has consistently landed on Inc.’s fastest-growing companies list.
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