Alexander Gurman plan for RARE DRUGS DISTRIBUTOR AEG

Alexander Gurman plan for RARE DRUGS DISTRIBUTOR AEG

2. Alex Gurman,
Odessa State University, Ukraine, Combined B.S. and M.S. in Biochemistry
Baruch College, New York, NY, BBA in Marketing, June 2003, Alexander@AlexGurman.com, cell phone: 917.825.8225,
10 Shore Boulevard, #3F; Brooklyn NY 11235

Primary Faculty Advisor: Vincent Grimaldi, Professor of Entrepreneurship at Baruch College/Zicklin School of Business,
President of the Grimaldi Group, vg2004@grimaldifinance.com
(212) 864-8961 P.O. Box 20648; New York, NY 10023

Secondary Faculty Advisor: Nermin Eyuboglu, Associate Professor, Department of Marketing, Baruch College/Zicklin School of Business, Nermin_Eyuboglu@baruch.cuny.edu, Tel: 646.312.3293, Address: One Bernard Baruch Way, Box B 12-240, New York, NY 10010-5585

Summary
1. Rare Drugs Distributor AEG NEWCO. Brief Description: rare drugs distribution product, B2C and B2B, U.S. and European patients, pharmaceutical industry, doctors, government, startup capitalization $90,000. Rare Drugs Distributor AEG NEWCO aims to streamline distribution channels in an effort to allow underserved customers’ uninhibited access to drugs for rare disease. Our goal is to become the leading wholesaler and retailer of Rare Products and Drugs, indiscriminately serving all clients. Additionally, Rare Drugs Distributor AEG NEWCO strives to provide an online forum for those who treat and suffer from these rare diseases.
Marketing and Sales Medicine's 'orphans' drugs for rare diseases. Those drugs are regulated differently from regular drugs because there are many small pharmaceutical companies that produce them and the market is very small for the companies just to distribute in one specific country.

2. Opportunity in the market Rare Drugs Distributor AEG Newco wishes to explore.
Business opportunity: We will create a web based company that would find patients who need orphan drugs and doctors who have patients who need orphan drugs and producers and manufactures of orphan drugs and we will facilitate distribution of those drugs. Because it could be a 10 people size small pharmaceutical company located in one of 200 countries in the world and the market size for them could be only 3000 patients around the globe and each pill can cost a couple thousands dollars, it would have to locate those patients in the world. In order to generate cash flow we would need to have about 20 suppliers and at least 5000 buyers to support 10 people distribution office and online club facility. Small pharmaceutical company has no resources to do marketing and sale distribution. Patients and their doctors have difficulty to locate the producers because it is difficult to distribute information for companies without a sales and marketing force around the world. But with our web base business we can connect patients, doctors and manufacturers together. As soon as chart room for these people star working, the company will harvest multiply results such as advertisement, connections, valuable statistic database, even a political influence and eventually pharmaceutical distribution starting in the NYC metro area.

3. How does your product/service address the problem or opportunity?
Mission statement
To streamline the distribution conduit to underserved customers for easier access to orphan drugs. To conserve human life by providing a distribution center for orphan drugs. To become the best distribution center for orphan drugs. and products wholesalers and patients to serve indiscriminately serve all patients with equal attention. Rare Drugs Distributor AEG NewCo provides a distribution center that takes serious concerns away from families to deliver an exceptional service.

4. Current and potential competitors, competitive advantage.
a. Rare Disease Therapeutics, Inc http://www.raretx.com
b. Neoforma, Inc http://www.neoforma.com/corp/company/index.html
c. Orphan Europe Inc http://www.orphan-europe.com/index_s.html?language=
d. Cardinal http://www.cardinal.com/
There are about 600 players in the market and about 12 major competitors.
The competitive advantage of our student team is that we require less profit than large pharmaceutical companies and small market size would be still sufficient market size for us and does not fit objections of large pharmaceutical companies. Rare Drugs Distributor AEG NewCo is different from the competition because we have unique location in NYC, we have more aggressive and hungry sales force than older companies. Rare Drugs Distributor AEG NewCo has better capabilities than competition in online presence. Alexander Gurman has extensive web design and programming experience and would be able to create technically advanced online market that competition does not have and could not have at equal cost base. Rare Drugs Distributor AEG NewCo has broad connections among pharmaceutical industry in the USA as well abroad. Over 200 people in advisory capacity provide us with unique marketing research opportunities at base cost to us. We have support and assistance of venture capitalists with examples of approvals in testimonials below. We will do delivery, help to complete necessary legal documents, research and location of prospects and locate charitable donations for little or no profit transactions that would be supported by hospitals and big pharmaceutical companies. Any small unknown drug can become a cure for diseases that are applicable to thousands of patients and than this drug and its distribution become extremely profitable afterwards. Many drugs start as orphan drugs become popular with general public later on.
Services: orphan drugs distribution, there is no one company in the world that does exactly what we would be doing, but there are about 650 companies that do similar services and we will address that in the competition overview in the business plan. Risky exploratory market, market size $ 3 billion based on discussions with industry experts that are listed among testimonials, market growth rate is about 28% per year. Distribution model is similar to the standard pharmaceutical distribution model. Sales would take place online, and with special delivery and marketing terms.

5. Target market (s) specifications (demographics) and size (# & $).
Opportunity: market size 6.7 Billions US, 26 Billions globally per FDA Orphan Act with 15% annual growth. The orphan drugs market includes U.S. and European patients, pharmaceutical industry, physicians, and the government. Startup capital is estimated to be $1.5 million, about $450.000.00 raised up to date. Rare Drugs Distributor AEG NewCo is an affiliate pharmacy and is getting national wholesaler licenses to conduct proper business practices. Rare Drugs Distributor AEG NewCo plan to offer a 450% return on investment over a 5 year period.

6. Marketing strategy to reach target market (s) & projected % penetration: years 1 - 5.
Rare Drugs Distributor AEG NewCo unique selling proposition is not only to streamline the distribution conduit to under served customers for easier access to orphan drugs, but also to conserve human life by providing a distribution center for orphan drugs. Rare Drugs Distributor AEG NewCo aspirations are to become the best distribution center for orphan drugs, product wholesalers and patients to indiscriminately serve all patients with equal attention.
Rare Drugs Distributor AEG NewCo target market is a niche market. This niche market consists of mainly doctors, pharmacies and medical centers. Even though patients are Rare Drugs Distributor AEG NewCo primary customer, they are excluded from our niche market due to the fact that doctors and pharmacies initiate the decision making process when writing a prescription.

Rare Drugs Distributor AEG NewCo will be positioned as a stress-free, easy to use drug access facilitator. We provide a distribution center that takes serious concerns away from families to deliver an exceptional service. Hospitals will be able to order orphan drugs through telephone, e-mail or the Rare Drugs Distributor AEG NewCo website. This process will greatly benefit hospitals and patients of orphan drugs by shipping drugs either from the Rare Drugs Distributor AEG NewCo storage house or through the manufacturer within a significantly short period of time.

Rare Drugs Distributor AEG NewCo marketing methods will include advertising through direct mail to many hospitals with information on which orphan drugs we will be distributing. Advertisements to hospitals through their daily and weekly newsletters and pamphlets will prove to be one of the most effective ways for doctors to discover us. Rare Drugs Distributor AEG NewCo website is created, Internet marketing can be used to advertise on strictly medical websites. Rare Drugs Distributor AEG NewCo will provide web banners that contain links to our website, which lists the specific orphan drugs that we distribute. Close relations between Rare Drugs Distributor AEG NewCo and possible clients, including existing clients, via phone and organized meetings will prove to be beneficial to all parties.


7. Business Model (supply/production/distribution strategy, projected revenue streams, and margins).

8. Summary of projected revenue/profit based on penetration of target market (s), market size growth, and estimated expenses for years 1 - 5; time of Break Even. For example:
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue
Profit

9. Management team and relevant experience.
Alexander Gurman, License series 7, 66, Life and Health Insurance. 14 years of experience in Consulting include 3 years of experience in Pharmaceutical Sales with Full Pet Services Inc in the USA in drugs distribution. 3 years of experience in Programming in the USA with major financial institutions. 7 years of pharmaceutical distribution in Ukraine with companies such as Monsanto and Procter & Gamble.
Education: Marketing BBA Baruch College alumni ‘03, participant of last three Baruch College Entrepreneurial Competitions with projects such as Biotechnology Research market place, international collection and billing project, software outsourcing to Russia. Combine Master and Bachelor Degrees in Biochemistry from Odessa State University, Ukraine ‘95. Computer Science major for 1 year at Polytechnic University.


10. Amount of money needed from investors, and for what purpose.
1.5 million
Capitalization Requirements: research and development require $100.000; personnel at least 3 partners; startup expenses $500.000. This $500.000 would be spend mostly on advertising and marketing to promote the company and service. It also include legal fee, technology expenses and day to day activity expenses. Alexander Gurman is willing to serve as partner with equity and can contribute $50000 cash at the earliest stage of the company start up. Team partners are confident that if we will have bullet proof business plan and will win the award from the competition at Baruch College. We can raise the rest of required money to start the operations and to survive until company will became profitable. Rare Drugs Distributor AEG NewCo has potential to grow into publicly traded company if one or more of orphan drugs that we will promote will become potential market for general public. That actually happened to a few companies in the market before and once they started to make profits in the general pharmaceutical market they moved away from the tight niche of orphan drugs. Orphan drugs distributors are taxed differently from regular pharmaceutical distributors. Pricing Structure; production/provision costs to support the office, web site, technology, and legal fees it would cost for the first year $50,000 and to advertise the service would cost $50,000; distribution costs are about 30%; profit margins would be 20%. Cash flows would be negative for the first 6 months and than by the end of the first year it should reach break even point, break even, return on investment over 5 years would be 40%. In five years we expect to make 2 million dollars in profits and expand operations to Boston and Silicon Alley.

11. Current State of Firm (e.g. product development stage, patents, contracts, current sales, profit level, equity/debt raised so far, etc.)

Printed Names/Signatures: 1. _____________2. _____________3. _____________
Date:


Testimonials: Michael Kenworthy venture capitalist www.techcommcorp.com (web site developed by Alexander Gurman) “interesting business concept with great prospects” phone 212 9720233.

Wilson, Loyal lwilson@primusventure.com, Loyal Wilson is the founder of Primus Venture Partners “Gurman Pharma is simply too early in its development. Pharmaceutical distribution companies do have an interest to us, but only after the development of significant revenue. Our capital is generally employed to drive growth after some level of profitability is established. Best wishes for the success of your plan.”

Malcolm Moss mmoss@beringea.com, Beringea is an international private equity and investment banking firm. “We think the idea of orphan drug distribution is an interesting market. Sincerely, Malcolm Moss”

Alex Barkas alex@prospectventures.com, Alex is a Managing Director of Prospect Venture Partners “we primarily invest in biotech and medical device companies. My advice is that given the cash flow nature of the business you are entering you will get to keep the most ownership of the enterprise if you bootstrap the capital needed rather than looking for venture funding. Also local investors or lenders are more likely to back you than national firms. Best of success with your plans.”

Advisors:
1. Dr. Efroim Gurman, PhD., Gastroenterology. Full Pet Services Inc.
2. Al Berrios, Managing Director, Al Berrios & Co.
3. Gary Ruinsky, Manager, Ernst & Young, LLP
4. Artyom Malkov, Baruch College, BBA in Marketing, expected in June 2005
5. Monika Rejman, Baruch College, BBA in Marketing, December 2003
6. Jenny Zeng, Baruch College, BBA in Finance, expected in June 2005
7. Bobby Moy, Baruch College, BBA in Psychology, June 2003
8. Mitchell Krasnerman, Baruch College, BBA in Finance, expected in June 2004
9. Tatyana Kozlovska, Baruch College, BBA in Finance, June 2002
10. Polina Tsal, Baruch College, BBA in Accounting, expected in June 2005
11. Michael Miller, Baruch College, BBA in Marketing, expected in June 2004
12. Volodymyr Turyk, Baruch College, BBA in Finance, December 2003