Sunpeaks Ventures Hits The Ground Running
Zacks Equity Research
Sunpeaks Ventures, Inc. (
completed its initial financing in March 2012 and hasn't looked
back since. Sunpeaks, and its wholly owned subsidiary Healthcare
Distribution Specialties LLC ("HDS"), is focusing on value-added
distribution of specialty drugs and over-the-counter (OTC) branded
multivitamins to the healthcare provider market across the U.S.
Sunpeaks is a new player in the over $300 billion U.S.
pharmaceutical market. The company is currently focusing on gaining
market share in the secondary wholesale market - and estimated $45
billion opportunity. Quite simply, Sunpeaks does not need to
capture big market share to generate significant revenues in the
coming years. HDS is a wholesale distributor of a wide range of
over 6,000 specialty drugs. HDS currently provides three primary
distribution services and owns one over-the-counter (OTC) product.
In additional to the company's distribution business, HDS owns and
markets Clotamin, the world's first specialized over-the-counter
multivitamin product designed exclusively for use by patients on
warfarin and other blood thinners. Blood thinners, including
warfarin, when combined with Vitamin K, can cause dangerous shifts
in a patient's international normalized ratio (
) level - the time it takes a sample of blood to clot. If your
ratio is too high, it means it takes longer for your blood to clot
and you may have an increased risk for uncontrollable bleeding. If
your INR falls below the normal levels, your blood may clot too
quickly and increase your risk for a stroke.
Physician's prescribing blood thinning agents may recommend
patients also take a daily multivitamin. However, off-the-shelf
multivitamins contain Vitamin K, a blot clotting agent. Clotamin is
a unique formulation of 12 essential vitamins customized for
patient on blood thinning agents, without Vitamin K. Over 30
million prescriptions are written each year in the U.S. for
warfarin. We see a sizable opportunity with Clotamin. A two month
supply retails for $25.99. That's a peak opportunity of $4.7
billion for HDS.
Over the past few months, HDS has been working to expand the
distribution channel for Clotamin. The company has locking in
agreements with Walgreens (
), Navarro Discount Pharmacies, Bravo Supermarkets, and Winn-Dixie.
The company is conducting a national advertising campaign to spread
awareness and education on Clotamin. We expect this to include
television commercials, infomercials, direct-response commercials,
and Internet-related media marketing. Former NBA basketball coach
and nominee for the Naismith Basketball Hall of Fame, Paul Silas,
is the national spokesperson for Clotamin.
In early April 2012, HDS entered into a strategic sales and
marketing agreement with Acosta Sales & Marketing, one of the
leading sales and marketing agencies in the consumer packaged goods
industry. Acosta has a long established track record of helping to
grow products into major national brands. The company has over $50
billion in system wide annual sales and close to 20,000 associates
that call on over 100,000 retail stores per month. Acosta
represents more #1 and #2 brands in North America than any other
agency, and has major retail customers including Procter &
) and Walmart (
Former NBA head coach Paul Silas isn't the only sport-marketing
avenue is seeking to leverage. On April 5, 2012, the company signed
a Pass-Through Sponsorship Letter Agreement with Portland Trail
Blazers. HDS gets the right to use the Trail Blazers name and logo
on in-store promotions in all the Walgreens stores in the entire
State of Oregon and the Southern Washington area, and will receive
advertising space in the Rose Garden Arena for home basketball
HDS is also looking outside the U.S. for potential growth with
Clotamin. In early April 2012, the company signed a letter of
intent with PharmaLife for the placement of Clotamin with leading
pharmacies in the Russian Federation. PharmaLife, an integrated
total healthcare solutions providers in Russia, is expected to
secure timely product registration within the Russian Federation
for Clotamin distribution and conduct local market research to
support a successful product launch. If successful, HDS could see
Clotamin distributed by several pharmacy and retail chains at over
400 locations in the Russian Federation.
For the new Sunpeaks Ventures to execute on its business strategy
and capture what we see as a significant opportunity with Clotamin,
the proper management must be in place. Through HDS, Sunpeaks has
established a senior management team with over a decade of
experience in various positions from procurement to sales.
In February 2012, Mr. Machie Barch was named the company's CEO. Mr.
Barch, the company's majority shareholder, is a co-founder of HDS.
Before launching HDS, Mr. Barch was a co-founder of Global
Nutritional Research, which manufactures OTC products for specific
disease states based on Rx/OTC interaction. Mr. Barch experience
ranges form pharmaceuticals and the secondary wholesaler market, to
the financial services industry. He graduated the University of
Colorado-Boulder with a BA in Economics. Barch currently is an
elected official in the State of Maryland, serving as a City
Council Member in Kensington, MD. Barch was the President of
National Blood Clot Alliance Chapter in Washington, DC, hosting
charity events to raise awareness about prevalence of Thrombophilia
and clot prevention. Mr Barch also serves as the company's CFO.
Other key senior management positions are held by Matthew Swift,
the company's Vice President of Sales and Justin Barch, the
company's Vice President at HDS. Mr. Swift is a co-founder of HDS,
and was a key participant to the overall growth of two
pharmaceutical wholesalers, Global Pharmaceutical Sourcing (
) and Premium Rx National (
). At GPS, Swift was able to grow sales to over $30 million 5
years. He has over 10 years of senior sales position experience he
has developed an experienced and competent sales force for the
company. Mr. Swift is a graduate of the University of Maryland,
College Park with a Bachelor of Arts, Business Administration.
Mr. Justin Barch is a co-founder of HDS and CEO of GNR. Before
founding GNR, Justin was an Investment Advisor at Morgan Stanley
Smith Barney in Bethesda MD, where he built investment portfolios
for high net worth families. Prior to joining MSSB, Justin spent
five years at the private investment bank Johnston, Lemon & Co.
Inc in Washington, DC where he was an investment advisor. Justin is
a graduate of the A.B. Freeman School of Business at Tulane
University where he majored in finance and minored in accounting.
In his spare time Justin advocates for blood clot awareness, and
was recently elected to the board of directors of the National
Blood Clot Alliance.
PROCTER & GAMBL (
Since the acquisition of HDS in February 2012, Sunpeaks has been
active in securing financing to execute it's business plan with
Clotamin. In March 2012, the company issued a three-year 10%
convertible note in with an original principal amount of $200,000
to an investor. The note is convertible into shares of our common
stock based on a conversion price that is equal to a 20% discount
to the average market price over a 10 day period immediately prior
to the conversion date (March 1, 2014).
In April 2012, the company entered into a Convertible Promissory
Note in the principal amount up to $700,000 with an interest at the
rate of 10% per annum. The note is convertible into our common
stock, at the election of the Holder, at a conversion price equal
to 80% of three-day average closing bid price of the common stock
prior to the conversion. Sunpeaks has since executed a draw down on
the note in the amount of $175,000.
Sunpeaks Ventures has a current market capitalization of
approximately $750 million. The company seeks to become a
significant player in the $45 billion secondary wholesale market.
With only 1% market share on its over 6,000 products, Sunpeaks can
achieve annual sales of $450 million. Even with 0.5% market share,
the revenue opportunity remains meaningful at $225 million. With
Clotamin, the company's unique multivitamin designed for patients
on warfarin and other blood thinners, we see a peak potential
opportunity of $4.7 billion. With 1% penetration, the company can
achieve sales totaling $47 million with Clotamin.
Specialty pharmaceutical companies and wholesalers typically
command a price to sales ratio of three to four times sales. With
peak opportunity, we think Sunpeaks Ventures could be easily worth
$1 to $1.5 billion in market value.
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