Supplement Maker SC Thorne HealthTech Grows, Uses Science, Data to Increase Market Share | Business
SUMMERVILLE – The growth in telehealth services and online shopping spurred by the pandemic, combined with a trend towards more proactive consumer interest in their health, has enabled Thorne Healthtech Inc. to embark on its most ambitious expansion since moving its operations here in 2018 from the Pacific Northwest. .
The life science company that focuses on the research and manufacture of nutritional supplements is building a 360,320 square foot warehouse in the Omni Industrial Campus off Interstate 26 to give it more space to store and process materials for the dozens of products it manufactures targeting issues such as bone and joint pain, heart and brain health, and metabolism.
The new building, which will add approximately 50 jobs to Thorne’s 450 people, is located near the company’s headquarters and is part of a plan to increase Thorne’s share in the highly competitive but fragmented supplement market. No manufacturer has racked up more than 5% of the supplement market, according to Thorne’s calculations, and that market is expected to nearly double to $ 271 billion by 2028.
A recent initial public offering of $ 70 million – the company now trades on the Nasdaq under the ticker THRN – is another key, giving the supplement maker additional cash to manage supplies purchases and build the marketing clout it has. it needs to capture consumers where they live.
“Our belief is that healthcare comes to the home,” Paul Jacobson, CEO of Thorne, told analysts during the company’s earnings call in November. “We are leading a trend that is transforming healthcare from a disease-centric approach to a wellness-centric model focused on providing clients with the tools to better manage and maintain their health long before they fail. traditionally enter the health care system. “
This includes bolstering the company’s website with science quizzes that analyze factors related to gender, age, diet, and lifestyle to recommend specific supplements made by Thorne. Depending on the responses, someone taking the website’s stress support quiz, for example, might get a recommendation for a trio of vitamins and chemicals that improve adrenal function. Or that person might be referred to a hemp oil blend to reduce stress and fear.
Customers looking for a more in-depth analysis can opt for one of the nearly a dozen home health tests. For stress support, the test would use saliva to measure hormonal fluctuations in the adrenal gland. Once a home test is submitted and then analyzed by Thorne’s Onegevity artificial intelligence platform, the company will respond to the consumer with a targeted recommendation.
“To deepen our relationship with our customers, we are focused on obtaining high-quality data to deliver more personalized solutions tailored to their needs,” said Jacobson.
The growth of Thorne’s direct-to-consumer model depends in large part on the continued delivery of these personalized solutions through online subscriptions, in which supplements are delivered to customers’ homes at regular intervals. Thorne has more than tripled the number of such subscriptions since 2018, from around 61,000 to 218,935 at the end of the third quarter of this year.
The company has managed to sidestep supply chain issues other manufacturers face as most of its supplies come from the United States, said Tom McKenna, COO of Thorne.
Jacobson said the testing and personal engagement offered on Thorne’s website are “the ramps” to a lasting relationship – in other words, subscriptions – with consumers.
McKenna said the growth in the company’s online sales reflects the broader trend of e-commerce and “the change in the way we all behave now in terms of information gathering and purchasing decisions. “.
The pandemic has put health and wellness at the forefront of the thinking of many consumers, he said, and – as someone might be researching online to buy a TV – consumers are using their smartphones. and other technologies to research health problems and manage their own solutions.
“Our customers continue to trust us to guide them on their journey to healthy living,” said Jacobson.
Thorne is also working more closely with physicians – both on telehealth and in-person office platforms – to let them know what products are available and could benefit their patients. There are now approximately 42,000 alternative physicians and practitioners in Thorne’s physician network.
“We have never seen so many doctors take an interest in the work that we do,” said Jacobson, adding that this was in large part due to the pandemic.
“During COVID, we think we’ve seen the tipping point happen… whether it’s because the doctors themselves have seen preventative health techniques actually work or their patients are playing Dr.Google and coming in armed. a bunch of questions about supplements and wanting to know what works and what doesn’t, ”he said.
Working with physicians lends scientific credibility to Torne’s products, Jacobson said, which is important as the company tries to expand its market share through shopping primarily online rather than through big box retail stores or pharmacies.
Credibility has long been a concern for the supplement industry, which has seen cases of overrated claims and manufacturing missteps. That started to change during the pandemic when the Department of Homeland Security included supplements as part of essential critical health care infrastructure. The recent surge in demand is also a sign of growing consumer confidence in supplements.
But skepticism persists, and Jacobson said this was one of the reasons Thorne’s IPO raised only about half of the $ 135 million the company was hoping for.
“The way you prove to people that your products work is through data,” Jacobson said Dec. 2 during a presentation at the Evercore ISI HealthCONx conference. “We have the data that shows that the things we do actually work. We have a long history with physician offices that shows us the feedback they receive from their patients. So we know what works and what doesn’t. “
The investing community seems to be heating up in Thorne since the IPO, with analysts at Cowen, RBC Capital, Evercore and Bank of America taking a bullish stance on the company’s shares and giving it a target price of between 11 and 13. dollars per share. To date, the stock has traded between a high of $ 10 and a low of $ 6.65. It was trading at the lower end of that range last week.
While Thorne didn’t make a net profit on an annual basis – he lost $ 4 million last year – he was in the dark as of September 30 with a margin of $ 5.3 million. Meanwhile, net sales continue to climb sharply, increasing 32% from the same period a year ago to $ 135.4 million. RBC Capital said Thorne has the potential to grow its annual revenue by 30% over the next three years at least due to its recent marketing investments.