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True Nature Holding, Inc. (TNTY) Seeks to Acquire Two ‘Compound’ Pharmaceutical Groups

  • Research reports the global compounding pharmacy industry will grow to $9.7 billion by 2021, exhibiting a six year CAGR of 5.3%
  • TNTY’s goal is to acquire two industry groups in the Southeast, then go national
  • Company names new president and CEO, intends to create three wholly-owned subsidiaries

True Nature Holding, Inc. (OTCQB: TNTY) has identified two acquisition opportunities in the fast-growing and high margin ‘compound’ pharmacy industry. They include the Southeast Group, a company of three units which did greater than $25 million in 2016, and the Florida Group that generated $2.7 million in 2016. Half of their all-cash business is in the veterinary market. Both are described in a TNTY 10Q filing (http://nnw.fm/aELF1).

TNTY is a development stage company seeking opportunistic acquisitions, beginning in the Southeast, of ‘compound’ pharmacies, pharmacies that formulate special therapeutic compounds to serve unique needs of a patient. Through combining or processing appropriate ingredients, compound pharmacies can change the form of a medication, from a solid pill to a liquid for example. It can also mean altering the taste or texture.

The goal of TNTY is be national, delivering economies of scale to the compound pharmacy industry, generating organic growth while acquiring such pharmacies through a four-step proprietary process that ends in profitable commercialization.

Global Market Insight sees the domestic market for compound pharmacies as $8 billion in 2016, and projected to grow at a 5% compound annual growth rate (CAGR) from 2017 through 2024 (http://nnw.fm/9caQ2). Persistence Market Research (PMR) found that the global compound pharmacy industry was projected to reach revenues of $7.09 billion by the end of 2016, exhibiting YOY growth of 4.5% (http://nnw.fm/z2uAE). PMR said the global market would achieve annual revenues of $9.75 billion with a CAGR of 5.3% over the forecast period 2015-2021. It says that the market’s CAGR will be stable and the North American Market is expected to dominate global growth.

Driving that growth, PMR says, will be blockbuster drugs going off-patent in 2016, a rise in demand for geriatric drugs, increased adoption of topical applications as well as cosmetic dermatological therapies.

TNTY believes there are more than 5,500 compounding pharmaceutical groups with combined annual sales of $5.6 billion and profits exceeding $1.5 billion. TNTY has identified a number of acquisition opportunities and plans to use debt and raise funds through a Regulation D offering.  After an initial acquisition is made, TNTY then plans to merge with an existing OTC traded company, then become a reporting company through an equity exchange transaction. To continue to grow, the company would then attempt to raise additional funding by registering its shares on an S-1 form, creating a market for them on NASDAQ.

TNTY has recently begun a restructuring. The company intends to create three wholly-owned subsidiaries: TN Retail, LLC; TN Compounding, LLC; and TN Technologies, LLC. It has named Thomas Burnell as its new president and CEO. Burnell has more than 25 years of experience in the health care and veterinary marketplaces, according to Dr. Jordan Balencic, chairman. Earlier, Burnell had been president of Boston Heart Diagnostics.

For more information, visit www.truenaturepharma.com

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