[August 24, 2009]

Drug therapies firm gains traction: Medication Management, using U of M technology, has won big customers such as General Mills.

Aug 24, 2009 (Star Tribune - McClatchy-Tribune Information Services via COMTEX) -- Breaking even wouldn't normally be cause for wild celebration. But considering the University of Minnesota's poor track record for spinning out companies, Medication Management Systems Incorporated's (MMS) feat seems rather impressive.

The Plymouth-based company, which offers software and services that help patients, employers and pharmacists manage drug therapies, estimates it will generate about $1 million in revenue this year -- about double 2008 sales -- and enough to break even based on operational costs. Its customers include General Mills, Wal-Mart Stores, and Coborn's Inc.

MMS, which spun off from the U in 2006, was the first company to emerge from a revamped technology transfer office.

"It really is a validation of our new system," said Jay Schrankler, a former Honeywell executive who runs the Office of Technology Commercialization. "For MMS to break even in a short period of time, I actually think it's amazing. Look at the customers they got signed up." The U's efforts seem to be paying off. As of June 30, university licensing revenue totaled $92 million, up 8 percent from the same point last year. Excluding the U's blockbuster anti-AIDS drug Ziagen, the school generated $8.67 million, an 11.1 percent gain from 2008.

Since 2006, the U has spun off four companies and will launch a start-up later this year featuring the first of several technologies based on Dr. Doris Taylor's work in regenerative medicine.

Despite a difficult environment to raise venture capital, MMS has managed to thrive thanks to careful financial stewardship and a sound technology thoroughly vetted at U-affiliated Fairview Hospital, the company's first customer, said Nate Schultz, MMS president and chief operating officer.

The company's core Assurance software helps patients and pharmacists better manage drug therapies by tracking types of medications, dosages, side effects, and, most importantly, whether they work.

MMS "is an interesting business and their work with Fairview with patient engagement was compelling," said Jodi Hubler, managing director of Lemhi Ventures, an Excelsior-based venture capital firm that specializes in health care companies. Lemhi evaluated MMS but declined to invest because of timing issues, she said.

Patients who don't take their medications properly cost the U.S. health care system an estimated $290 billion a year in avoidable medical spending, according to the report by the New England Healthcare Institute.

"For every dollar we spend on drugs, we're also buying drug-related problems," Schultz said.

MMS' strategy has been to recruit pharmacists to use Assurance and then package the software and pharmacists into a disease-management service employers can offer to their workers.

Earlier this year, General Mills in Golden Valley invited about 500 employees, spouses and children into the program who have chronic diseases and typically take five or more medications a day. The patients meet with pharmacists who can also share data with doctors.

The service recommended that nearly nine out of every 10 patients alter their drug therapies, said Jeanne Denz, director of global benefits for General Mills. The program is the "missing piece" in disease management, she said. "The pharmacist is essentially a health care coach. It's an incredible opportunity to help customers better understand their medicine." Because MMS charges more for this service, the company expects revenue to hit $2.5 million to $3 million in 2010. Schultz said he also expects the start-up to benefit from President Obama's efforts to reform health care by emphasizing effective clinical outcomes.

"By being able to better manage drug interactions or offer alternatives, the consumer and the employer may be able to get better care at a lower cost," said Peter Birkeland, chief financial officer for St. Paul-based Rain Source Capital.

Thomas Lee --612-673-7744 To see more of the Star Tribune, or to subscribe to the newspaper, go to http://www.startribune.com/. Copyright (c) 2009, Star Tribune, Minneapolis Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

[ Back To TMCnet.com's Homepage ]

Discussions: