By Liz Wilson, Marketing Director, Ben Franklin Technology Partners of Central & Northern PA
The Center for Disease Control claims that 17 million people reported allergy symptoms last year, but only a fraction of them were able to actually receive Allergen Immunotherapy (AIM). Today, there are fewer than 6,000 board-certified allergists and immunologists in the United States, and their ranks are getting smaller every year. While this number continues to shrink, the number of people who visit a doctor because of seasonal or year-round allergies caused by pollen, mold, or dust mites is on the rise. Allergies represent the fifth most prevalent chronic reported disease.
Most people start off trying a variety of medications – over the counter and prescription – but typically find little or no sustained relief. So, what is Allergen Immunotherapy or AIM? AIM slowly conditions the immune system to accept that the allergen (cat hair, pollen, etc.) which is causing your runny nose or itchy eyes is harmless. In short, immunotherapy changes the way your immune system reacts to the allergen, which is a curative approach, as opposed to masking symptoms with a pill or a nasal steroid.
Headquartered in Erie, PA, Direct Allergy LLC is a medical services company that offers comprehensive allergy testing and treatment that patients can receive directly from their family doctor or primary care physician (PCP) rather than an allergy specialist. Direct Allergy has an agreement in place with two licensed manufacturers of allergenic extracts that will allow the company to provide a full-line, turnkey operation. For the PCP’s, this is a great opportunity to enhance their clinical offerings, improve patient satisfaction, and boost revenues without disrupting their everyday operation. For the patients, it’s more convenient and less costly. People usually select a PCP close to where they live or work, and visiting a family doctor incurs less out of pocket cost than seeing a specialist. The speed of service provided by the Direct Allergy program improves compliance and therefore creates better outcomes.
The company’s management team developed what they call a “Clinical, Competent, and Comprehensive” method of delivering allergy treatment. Founded in 2012 by three pharmaceutical industry executives with 90 years of collective experience, the company soon recruited a fourth partner, Jay Gruhlkey, MD, to fill the position of Chief Medical Officer. Dr. Gruhlkey is the current President of the largest primary care allergy society in the nation, the Pan American Allergy Society, and offers Direct Allergy’s services within his own medical practice.
By early 2013, the founder and President of the company, Bob Schultz, a Fortune 100 leader and innovator, who has more than 25 years of experience with both large and small pharm-companies, started to see a great deal of interest for their business model from primary care physicians, especially in Western Pennsylvania. Because of the high potential to scale this model regionally and nationally, Mr. Schultz recruited a well-known and respected figure, Lt. General, US Army (Retired) William “Gus” Pagonis. General Pagonis, who acts as the company’s Chairman and Chief Executive Officer, is an expert in business logistics and supply chain management. The retired three-star General is widely recognized for his logistical achievements particularly during Desert Shield/Desert Storm, winning high praise from General Norman Schwarzkopf. After leaving the army in 1993, he was hired as Head of Supply Chain for Sears Roebuck & Company.
Despite the high demand for quality allergy treatment, the existence of companies that provide support to physicians for treatment is highly fragmented and the services offered typically are restricted to a certain patient population or include only initial blood sample kits. Even though the market conditions were ripe for a new approach, Direct Allergy needed money in order to launch a test site. The company had attracted some initial investors, but most said even though they were interested, they wanted to see the results from a “proof of concept” engagement. It was at this time, that Bob Schultz and his team met Ben Franklin Technology Partners of Central & Northern PA www.cnp.benfranklin.org. The Ben Franklin Program, which is often the first institutional investor to participate in a new deal, is part of a statewide network that has been providing seed capital to entrepreneurs and small manufacturers for more than 30 years.
Ben Franklin’s investment of $350,000 helped the company launch not only their alpha site at the Titusville Area Hospital, but also a beta site in suburban Pittsburgh in September of 2013. Both locations are still in operation, and their continued success has confirmed for the team that their business assumptions and practices are on target. In fact, a physician’s office in Olean, New York, recently signed on, and the site opened March 10, 2014. The company is also currently in negotiation with multiple independent practice associations and hospital systems.
Bob Schultz commented, “With sites in Texas, Western New York, and Western Pennsylvania, as well as a signed letter of intent with a large independent practice association in Arizona, we’re very excited about our progress to date. We believe we’ve developed the very best PCP allergy model in the United States, as it’s a win-win situation for the doctors and the thousands of patients who suffer from allergies. Our initial business approach was to clear all the regulatory and legal compliance hurdles right out of the gate, making it likely that our shareholders will reap the rewards associated with making a sound business investment. Many thanks to Ben Franklin Technology Partners for having faith in our team and jumping in early.”