For years, Markham-based gastroenterologist Pardeep Nijhawan heard similar complaints from patients who came to his office suffering from intense heartburn and acid reflux. Users of prescribed proton-pump inhibitors (PPIs)—a medication that enters the bloodstream and reduces stomach-acid production—were experiencing significant side effects, even though PPIs were the current standard of care. Along with persistent abdominal pain, diarrhea and garden-variety nausea, a mere half of patients find relief during their course. “As a physician, not being able to help your patients when they’re in pain is extremely frustrating,” he says. “But being an entrepreneur, the wheels started to turn.”
One gets the sense that Nijhawan’s wheels are rarely stationary. The 48-year-old’s knack for identifying business opportunities in the pharmaceutical space has heretofore led to the founding of multiple successful ventures. One of his most recent is Exzell Pharma, the number-one startup on this year’s ranking of Canada’s Top New Growth Companies, which has a two-year revenue growth of 6,204%. Born in Zambia and educated at the Mayo Clinic, Nijhawan always felt a certain split between his desire to help people and his entrepreneurial instincts. In grad school, he ran a company that staffed emergency rooms, aiming to streamline the sometimes-complicated shift-scheduling process. Nijhawan launched his first company, Medical Futures Inc., in 2002. He sold it just over 10 years later for $25 million, which provided a substantial capital boost for his follow-up venture. While Medical Futures specialized in over-the-counter prescriptions, Exzell’s focus is the acquisition of novelty pharmaceutical products to address areas of unmet need. The concept smacks of that trademark entrepreneurial idealism, but Nijhawan is more matter-of-fact: “We’re not different from the guy in the desert selling water. If the need is there and the product works, it’s really not a lot more complicated than that.”
Exzell’s marquee product—and the one Nijhawan is referring to—is EsopH, an all-natural, over-the-counter oral therapy alternative that can be used instead of, or with, PPIs. Developed in Italy, acquired by Exzell in 2017 and approved by Health Canada last year, EsopH works by coating the stomach rather than entering the bloodstream. Relief is faster and side effects are less of an issue. “We knew this was a winner,” says Nijhawan, flicking at the fact that, firstly, the efficacy of the product was already proven by multiple clinical trials and, secondly, that the market was hungry. Approximately 20% of North Americans suffer from gastroesophageal reflux disease (GERD), a condition that, alone, is expected to amass $4.5 billion in treatment dollars by 2025.
For Exzell, doubling down on its founder’s no-nonsense expertise has made the difference. “The over-the-counter consumer space is just littered with products that have a range of good data to next-to-no data,” says Carl Schwab, Exzell’s marketing director. In the area of new and unknown pharma products, cutting through the noise is incredibly challenging—perhaps now more than ever—when everyone from Dr. Google to Dr. Oz to Gwyneth Paltrow purports to have credibility. “You see on packaging ‘clinically tested’ or ‘clinically proven,’” Schwab says, “but the reality is that could indicate [results from] a very small data sample.” Schlepping a product that has undergone rigorous scientific testing bestows an obvious advantage. But once the product has been cleared for market, the challenge becomes how to translate all that complex medical data into a message of relief for ailing consumers.
The Exzell solution was avoiding the usual sales-rep route and putting its marketing in the hands of key opinion leaders (KOLs), notable pharmacists and specialists whose weighty co-sign has been one of the secrets to the startup’s success. “Demonstrating the science to people who can understand it is a great play,” says Dr. Joseph Ferenbok, co-director of the Health Innovation Hub at the University of Toronto. “It’s a slower process, but if you have the opportunity and the resources to launch a top-down marketing strategy through word-of-mouth, that’s invaluable in terms of credibility.”
The one-two punch of a solid product and a targeted marketing plan is critical, but the trouble with a top-down strategy is that, often, it takes time that a lot of startups simply do not have. “Obviously, there is pressure to get the product on shelves because, of course, you need to pay salaries, keep the lights on,” says Nijhawan, whose employee count now numbers more than 15. Exzell circumvented the issue by creating a reliable revenue stream before introducing EsopH. Right out of the gate, the company acquired the Canadian rights to three legacy brands: Swiss Naturals, the antibiotic ointment Ozonol and Myoflex, a topical pain reliever. The profits from these brands have kept Exzell in good financial standing while it executes the time- and resource-consuming introduction of EsopH.
To kick off the prescription’s rollout, Exzell flew in renowned Italian gastroenterologist Dr. Carmello Scarpignato, who is something of a rock star in the global gastrointestinal (GI) community (KOL status achieved), and who oversaw some of the drug’s early clinical trials. At a dinner with 25 of Toronto’s leading GIs in attendance, Scarpignato gave a presentation and fielded physicians’ questions. Whatever he said worked: “By the end of the evening, everyone was extremely on-board,” Schwab says. “I got notes afterward saying how excited everyone was about the product, which was a major win.”
Specialists form a far smaller pool than primary-care physicians, says Peter Weiler, Exzell’s president, “but those are the people who actually have time to read the literature and to look at the clinical trials.” With primary-care physicians, he explains, a sales rep might get one or two minutes. With their hectic schedules and the pressure to keep up in a variety of fields, physicians will often look to the specialists to provide a seal of approval. “If you can get one to recommend your product, that’s going to carry a lot more weight than a rep,” Weiler says.
In pharmaceutical retail, there is nothing worse than getting “D-listed,” which is what happens when a product isn’t selling, Schwab says. It’s relegated to the darkest, dustiest corners of the counter. “In most circumstances, you have about three months on the shelves,” says Schwab. In the antacid market in particular, those shelves are especially crowded. In fact, standing out amidst the Gaviscons and Maaloxes of the world was yet another key hurdle that Exzell faced in bringing EsopH to market.
“Part of targeting specialists was about building up demand before we put the product out to consumers,” Schwab explains. “We wanted to build a bit of a groundswell.” With EsopH, they made the product available only behind the counter, so customers had to ask for it or acquire it via a pharmacist’s recommendation. Again, it’s not the most expedient route, says Dr. Ferenbok, “but if you can build demand before supply, that makes a lot of sense as strategies go.”
Never quite content with slowing down, Nijhawan alludes to a slew of new Exzell-vetted pharmaceuticals poised to join EsopH on the shelves, though the only detail he will confirm “for competitive reasons” is that the “pipeline is robust.” Nijhawan also hints that Exzell will eventually expand its portfolio outside Canada. When it does, his rolodex of KOLs should watch their phones.