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Sigma Global Corporation (SGGC) |
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CEOCFO
Interview Index |
This is a printer friendly page! BIO: Sigma Medical has built a successful mail order
pharmacy and is producing rapidly growing revenues and expanding margins by offering the
highest quality products and service, with a 100% order fulfillment rate at extremely
competitive prices. The Company is preparing to expand its pharmacy
facilities to accommodate its rapidly growing patient database by year 2006. Sigma will be
cash flow positive in the fourth quarter 2004 and will be self funding from revenue
generated from operations. Furthermore, all key management is in place to capitalize on
this successful platform. CEOCFOinterviews: Mr. Chance, what was your vision in founding Sigma Global Corp. and where are you today? Mr. Chance: “The vision of the company is to establish an organization that enhances lives today and tomorrow with respect to prescription medication and medical devices. Our company has targeted uninsured Americans and seniors and is helping them to better manage their chronic diseases and increase their patient compliance by making it easier for them to access more affordable medications. Currently we are licensed in all fifty states and in Puerto Rico. We have developed an integrated delivery chain of pharmaceutical products and medical supplies at very cost-effective prices to help the uninsured Americans.” CEOCFOinterviews: Will you give us an example of where you are in the process and an example of the successes? Mr. Chance: “There are 45 million Americans without health insurance today in our target market and there are 36 million Americans aged 65 and over that are consumers of healthcare. Of Americans aged 65 and older, about half of those pay cash for their medications so we are looking at a very large market. We developed a diabetic program where, for ninety-nine cents a day, our company will provide diabetic supplies and all diabetic medication for patients with diabetes, based on a once a day testing schedule. We will provide their strips, meters, testing devices and prescribed oral medications. There are eighteen million Americans with diabetes and as their budgets are constrained, the first thing they ration is their medication. That does not allow them to manage their illness at all. We partner with them through our compliance program and our cost-effective prescription medication.” CEOCFOinterviews: How is it possible to provide this service as such a low cost? Mr. Chance: “The second platform of our company is the seamless integration of our supply chain. We have recently completed the acquisition of two wholesale distribution companies. We also work directly with manufacturers, and we will be manufacturing our own comprehensive line of generic pharmaceuticals over the next five years. By the successful implementation of our strategic acquisitions, joint venture agreements and partnerships, this further enables us to pass tremendous savings along to consumers. Additionally, we lose the layers of bureaucracy that insurance companies require such as prior authorization, billing, collection etc. We operate on a cash business with our customers via credit card, check-by-phone or check-by-fax. We are able to offer a much more streamlined service.” CEOCFOinterviews: How do you reach the consumer? Mr. Chance: “We have been a publicly traded company since July of 2004. We generally partner with community health organizations and physicians. We have partnered with a very large Canadian pharmacy to bring patients back to the United States because it is more cost-effective here in the U.S.” CEOCFOinterviews: What other types of programs do you offer? Mr. Chance: “We have a Generic Express program where we offer generic medication for patients at the best prices in the market. To take it a step further, we specifically identify much of this by examining what is happening in Canada. The Canadian government has price control over medication and therefore brand name prescription medication, which has been protected by U.S. patent law for seventeen years, is substantially cheaper than it is in the U.S. However, generic medication is substantially cheaper in the United States than it is in Canada. If a patient uses three to five prescriptions, generally only one or two of those are brand prescriptions. What we have done is strategically partner with leading Canadian mail-order pharmacies and let the patients choose if they want to continue to access the brand medications from Canada at a cost savings or integrate them on a generic medication. How we offer our program strategically is we educate patients on the differences of brand and generics. For example, if a patient is on a blood pressure or heart medication, and their physician has prescribed a brand drug, we educate the patient that there is a generic equivalent that is about eighty-five to ninety-five percent the same as that brand drug. If the patient is rationing or not taking the brand drug because they cannot afford it, most physicians would say ‘yes it is better for a patient to take a 95% effective product at a generic level that they can afford as opposed to a brand product, which they are not going to take anyway’.” CEOCFOinterviews: What is involved with you being able to produce generic drugs? Mr. Chance: “We formed a partnership with Stason Pharmaceutical, a manufacturing company that is based in Irvine, California and we are extremely excited about this. We are initially preparing for submission to the FDA ten to fifteen generic drugs that are aligned with patients that have chronic diseases such as diabetes, hypertension, cardio-vascular and respiratory issues. We are filing for FDA approval to manufacture those drugs ourselves. The time frame for us to receive the licensure to manufacture those products is about eighteen to twenty-four months. Once we receive the approval to manufacture those products from the FDA, then we can move pharmaceutical products straight from the manufacturing floor to the patients’ homes. We emigrate directly from the manufacturer to the patient without any additional overhead layers of wholesalers and retailers. We can offer patients tremendous savings on their prescription drugs.” CEOCFOinterviews: How do you proceed to encourage physicians to look at your program and explain it to their constituency? Mr. Chance: “We take a unique approach. Several competitors in the mail-order arena and the delivery arena have focused on advertising. To me those resources could be spent on a much more effective way to enhance people’s lives. We are partnering with community health clinics and physicians that serve the uninsured, to meet those patients’ medication needs. For example, we may offer particular programs and partnership with certain clinics to identify patients as they come in and if this patient does not have insurance, here is what we would offer them. It is a delicate issue from a regulatory perspective because the physician cannot place the patient in my pharmacy or supply service but they can advise the patient about the programs and the patient can make the decision on their own. We partner with physicians to serve that population and identify problems and opportunities and ways in which we can assist people. From my perspective, I could spend fifty thousand dollars in the USA today and I could also channel a portion of that fifty thousand dollars to buy some medication and work with community organizations to supply medication to patients who cannot afford it and then in time, work with their cash-paying and uninsured patients. That is a much more effective use of my resources. I partner with physicians in that fashion and I partner with people and help them manage their chronic disease.” CEOCFOinterviews: What is the size of your current customer base and how is it growing? Mr. Chance: “Our customer base is growing extremely quickly with about 2,500 active customers. Our first Canadian pharmaceutical company that we partnered with has a database of 115,000 and those were cash customers that went to Canada for brand savings. We are going to integrate those patients back to the U.S. for generic drugs. You can look at numbers and extrapolate where we expect to go. On average, a patient 65 plus spends about 3,200 dollars a year in prescription medication. We have a real unique opportunity.” CEOCFOinterviews: How are you set up for this in the future? Mr. Chance: “We have a 14,000 square ft. call-center and pharmacy distribution center built about a mile from the Dallas / Fort Worth International Airport, which is the third busiest airport in the world. We have planned for this and we have an outstanding management team so we are poised and ready for the growth. Alongside the uninsured patients there is a significant payer change occurring in the Medicare system. Congress has passed a prescription drug act for patients in 2006. Those senior patients that are buying their medication with cash are going to have some governmental assistance in 2006. How is this relevant? Our business model is one of the most exciting things that we are doing and this is what fostered the Canadian dialogue. These Canadian companies have built their entire patient base on the senior customers and the Medicare program is not going to reimburse Canadian pharmacies for U.S. senior customers. The Canadian pharmacy opportunity should significantly deteriorate or dwindle between now and 2006. That is why we partner with the Canadians because we are integrating the seniors back into the U.S. distribution channel, allowing us to develop the relationship in which we can work with these patients in 2006. With the Canadian pharmacies that we have partnered with, we have joint ventured with them, so they have incentive to work with us because they are stockholders in our company. We are excited about that.” CEOCFOinterviews: How are you funded for your future development? Mr. Chance: “We have very strong financial partners that are funding us and preparing us for this growth. Thanks to those financial partners, we are scaleable; we do have the scale built out, our key management and staff are in place, and we are ready to proceed.” CEOCFOinterviews: In closing, why should investors be interested and what should they know about the company that they might not realize when they first look at the company? Mr. Chance: “Our company is poised to compete in a 95 billion dollar a year pharmaceutical delivery market. Over the next ten years it is anticipated that that market will be 1.5 trillion dollars; those numbers are from the Healthcare Financing Administration. We believe that with our strategy, delivering cost-effective delivery models directly from manufacturer to the patient, we have a great opportunity to capture pieces of that market share. Our creative approach in dealing with patients and transacting with individuals on a one-to-one basis, continuing to have the price leverage and the negotiation with the patient, allows us to integrate the delivery of products and our supply chain. We provide a phenomenal return in the growing market.” disclaimers |
“The vision of the company is to establish an organization that enhances lives today and tomorrow with respect to prescription medication and medical devices. Our company has targeted uninsured Americans and seniors and is helping them to better manage their chronic diseases and increase their patient compliance by making it easier for them to access more affordable medications. Currently we are licensed in all fifty states and in Puerto Rico. We have developed an integrated delivery chain of pharmaceutical products and medical supplies at very cost-effective prices to help the uninsured Americans.” - Bryan M. Chance |
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