Pet Med Outsourcing: PE’s New Doggie Bag: Not only recently but also In 2009 Huntington Capital invested in Eaton Veterinary Pharmaceutical Inc. d/b/a as Roadrunner and estimated the veterinary compounding business to be a $125 million dollar business and growing--so how much money does veterinary compounding bring in these days; and if Eaton was filling 800 to 900 prescriptions a day and shipping them around the country to 9000 nationwide clinics in 2009 (which grew to 11000 in 2012) why isn't Congress dealing with Veterinary compounding in the current legislation?

• October 29, 2009, 5:14 PM

By Beina Xu

Attention, investors: there’s a new emerging market.

Veterinary compounding pharmacies. Put simply, they’re outsourced medication pharmacies that compound, or adjust the size and dosage, of drugs for your pets. And it’s caught the attention of one mezzanine firm.

San Diego-based Huntington Capital invested a mezzanine loan in Phoenix-based Eaton Veterinary Pharmaceutical Inc., or Roadrunner Pharmacy, which specializes in compounding back-ordered and discontinued pet medications. Partner Tim Bubnack said the commitment was on the low end of the firm’s typical sweet spot of $1.5 million to $5 million.

“It’s a business that’s grown fairly quickly in a market that’s really emerging right now,” he said. “People want better products for their pets, and they’re willing to pay for them.”

Eaton fills 800 to 900 prescriptions a day and ships them around the country. The company will use the growth capital to expand its sales team and develop of its own assortment of in-house drugs that will undergo tests through clinical trials, Bubnack said. Eaton, founded in 1999, sells to over 9,000 veterinary clinics nationwide.

The market for pet medication compounding is a bit tough to measure as many vets still handle the process themselves, instead of outsourcing, but Huntington estimates it to be approaching $125 million and growing. Bubnack says vets are finding it increasingly difficult and costly to carry large inventories of drugs. “They’re there to treat the animal, not build a business around prescriptions,” Bubnack said.

“They’re moving away from handling that in-house to the outsourcing model.”

The trend has also been propped up by the increasing complexity of pet medications, including modifications for specific breeds, Bubnack said. “The regular off the shelf drug might be right for the cat you have, but maybe not for the pit bull down the street.”

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Fourth Question of the Day October 1, 2013 Does having a degree in interior design, nursing and culinary arts and being the owner of a boutique qualify someone to own a veterinary compounding pharmacy or to make veterinary compounded medications? Should animal owners be more aware of who the makers and owners of veterinary compounding pharmacies are? Should there be requirements as has been suggested on the blog before that veterinary compounding pharmacies be a speciality in pharmacy schools and special licenses be required to make these types of compounded preparations?

Linda Obele

Phoenix Business Journal

Bold businesswoman builds ode to girliness

Sabrina Eaton always has enjoyed wearing different hats -- which makes sense, considering she owns a north Phoenix boutique that features more than 3,000 square feet of accessories and fashion items. But when she talks about wearing many hats, she could just as easily be discussing her varied business interests.

"I've always been very curious about a lot of things," said Eaton, owner of Sabrina's Boutique at Seventh Street and the Carefree Highway. "And I've always loved a challenge. If something interests me, I just go for it."

Her formal education includesdegrees in interior design, nursing and culinary arts. She's worked as an interior designer, a nurse and owner of a medical lab/pharmacy.

In 1995, Eaton and her husband, Robert, decided to capitalize on her medical training by founding Eaton Labs and Road�Runner Pharmacy, which customized medications for people and animals. She still runs both the lab and the pharmacy, and is working to secure a patent for a medication that treats dry eyes in pets.

Three years ago, realizing they had outgrown their quarters, the Eatons designed and built Tuscani Pointe, a 90,000-square-foot retail center that houses the lab, the pharmacy and Sabrina's Boutique, her ode to girliness.

For more: www.sabrinasboutiqueaz.com.

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Question of the Day September 2, 2013 How many employees, pharmacists and certified technicians does a compounding pharmacy need to have before it is considered to be doing more than traditional compounding? This one has 170 employees, 24 pharmacists and 40 techs according to its website.

Roadrunner Pharmacy began in 1999 with one pharmacist and one salesman in Phoenix, Arizona.  Today, Roadrunner Pharmacy employs over 170 employees including 24 Pharmacists and over 40 Certified Technicians.  Our Sales reps in the field continually update the vet hospitals on the latest medications & delivery techniques.

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UPDATED Question of the Day September 1, 2013 How Many Clinics Does a Compounding Veterinary Pharmacy Have to Sell To Before It is Considered Doing More than Traditional Compounding? This one claimed to sell to 9000 veterinary clinics nationwide in 2009 and 11000 in 2012.

Huntington mixes up the right prescription for Roadrunner Pharmacy

[PRESS RELEASE]  San Diego, CA, October 26, 2009 – Huntington Capital mixes up the right prescription for Eaton Veterinary Pharmaceutical, Inc. (dba “Roadrunner Pharmacy”).

Huntington Capital Fund II, LP (“Huntington”), a San Diego based private equity mezzanine fund focused on providing growth capital financing to established lower middle-market businesses throughout California and the Southwestern U.S., is pleased to announce its recent investment in veterinary compounding company Eaton Veterinary Pharmaceutical, Inc. (dba “Roadrunner Pharmacy”).  The purpose of the financing is to support growth and new product development. Founded in 1999, Roadrunner is one of the leading compounding pharmacies in the nation, providing veterinarians and their patients with off the shelf and custom pet medications. Unlike human medical doctors, veterinarians do not have the luxury of a wide variety of commercially available pharmaceuticals.  Eaton has a staff of highly trained pharmacists and prescriptions are compounded in house and shipped out next day air free of charge.

“Roadrunner is the exact type of growth opportunity that we are looking to support in this type of environment,” noted Huntington Partner Tim Bubnack.  “The company is led by an entrepreneur that has done a fantastic job of bootstrapping the business while successfully leading exponential growth over the last few years. In general, we believe that consumers are going to continue to spend money on non-discretionary type items, including medication for their household pets, no matter what is happening in the overall macro environment.  We continue to see this play out in the company’s overall performance.  Outside of their core business, we are also very excited about the potential of several FDA approved medications that are currently in development stage by the company.”

Eaton Veterinary Pharmaceutical, Inc (dba “Roadrunner Pharmacy”)
Roadrunner Pharmacy is one of the leading veterinary compounding pharmacies in the nation.  Located in Phoenix, Arizona, the company currently sells to over 9,000 veterinary clinics nationwide.  Roadrunner is committed to providing the highest quality custom medications at reasonable prices, with all new prescriptions shipped next day air free of charge.  For more information, please visit the company website at www.roadrunnerpharmacy.com.

Huntington Capital
Based in San Diego, CA, Huntington Capital is a leading mezzanine capital provider to lower middle market companies throughout California and the Southwestern United States.  Founded in 2000, Huntington is currently operating out of its second fund, Huntington Capital Fund II, which it raised in 2008 with $78 million in capital commitments from a group of leading institutional investors.  Huntington seeks to invest in established lower middle market businesses generating between $10 million and $75 million in revenues across a broad range of industries; investments are typically structured in the form of growth capital, buyout or acquisition financing ranging between $1.0 million and $6.0 million.  The firm has invested in approximately 35 companies since its founding.  Partners Morgan Miller, Barry Wilson and Tim Bubnack lead Huntington’s management team. For more information, please visit the company website at www.huntingtoncapital.com.

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See here for figure of 11000 in 2012