Lifeline sells 'apothecary' business
subsidiary, Virtual Apothecary, as part of a new strategy to focus
on its products. The company is also looking for acquisitions.
Lifeline BioTechnologies announced last week that it had sold its subsidiary, Virtual Apothecary, in an on-going relationship with its new investment group.
Lifeline will receive $800,000 in cash, and royalty fees of $1.2 milion. The royalties will be dependent on Virtual Apothecary's future product sales.
Lifeline's president and founder, William Reeves, explained: "Virtual Apothecary was designed to introduce primary care physicians to the use of nutraceutical products. Although still under development, the concept is unique, but the sales effort required to introduce the Apothecary concept does not fit the call pattern of Lifeline's distributor network."
Reeves added that marketing efforts will use distributors who sell capital equipment to hospitals and surgeons, while the Virtual Apothecary requires a sales force more like those used by drug companies. "Drug companies' sales personnel have very small territories and are in constant contact with their doctors."
CEO Jim Holmes said that Lifeline has been modifying its business strategy.
"Virtual Apothecary is going to require additional funds to complete its system and development the market. Lifeline has decided to concentrate its resources on its products."
Holmes also said that the difficulty of estimating the time required to complete the research and development of its women's cancer products had led the company to seek new products and/or companies that could be acquired to produce revenues earlier.
He said they would be looking for opportunities that could take advantage of Lifeline's established network of national distributors. The funds derived from the sale of Virtual Apothecary could be used to assist to accomplish these efforts.
