Entrepreneur of the year
Nuvothera Inc. was founded in March 2014 in Tarrant County by Art Clapp and launched its first product – Prosoria Daily Psoriasis Treatment System – in March 2018.
There are only three employees – CEO Clapp, CFO of Operations Mike Yankovoy and Director of Marketing Bev Hope, but more than 30 people are involved in outsourced activities such as consulting, manufacturing, distribution, fulfillment, packaging, website development and digital advertising.
The company develops, markets and sells innovative over-the-counter consumer health care products for skin conditions.
Clapp, Yankovoy and Hope replied to questions from the Fort Worth Business Press:
What differentiates your company from others in a similar business?
Nuvothera is a virtual over-the-counter skincare company that outsources most of its operations while maintaining strategic planning and coordination roles using the core management team. We primarily utilize digital marketing and social media to cost-effectively create and generate sales demand while using Amazon for cost-effective product fulfillment to our customers.
We are a pioneering company who are changing the paradigm of how consumers treat their skin conditions. Our goal is to make a difference in the quality of life of people suffering with skin conditions such as psoriasis.
"Our passion for how our products can impact people's lives is what drives us. Nothing makes us happier than hearing from our Prosoria users and seeing their amazing results," says Hope.
All businesses go through some tough times. What was your greatest challenge and how did you respond to it?
Developing an effective and safe therapeutic solution for treating psoriasis. Biological systems are unpredictable and present clinical challenges that need to be optimized, taking longer time and more resources than planned. Solved with perseverance, testing and team efforts from our resourceful and generous Fort Worth community plus a bit of serendipity.
The business climate is changing rapidly. What do you foresee as challenges?
As our current sales channel is internet commerce, state taxation laws are rapidly evolving as taxation income from brick and mortar retail business is declining while untaxed internet income is rapidly growing. We expect to see states continue passing laws to regain tax income from interstate sales on the internet.
Currently the focus is on the larger companies having significant internet income. Smaller companies are currently spared interstate taxation unless they have nexus in any state where their products are warehoused and distributed. An example is having nexus as the result of storing product in Amazon warehouses across the country. State tax remittance is a challenge for all internet sellers, especially Amazon sellers, says Yankovoy.
Being veterans of the pharmaceutical industry, governmental regulation is not new to us. The Food and Drug Administration continues to tighten its regulatory hold on health care products including drugs, cosmetics, medical devices and over-the-counter products. As the FDA issues tougher regulations, we are prepared as we take a conservative approach with our background in pharma and steer to the highest standards. This is important as we will someday plan an exit and court potential pharma partners who require companies to maintain the same high FDA standards that they embrace before being considered an acquisition target.
Access to capital may become more difficult if we start entering a declining economy or recession. Timing is everything. However, health care and health care products are often shielded somewhat from the effects of a downturn in the economy.
Access to labor is good in the DFW area for our industry. There is a high number of graduating scientists and post-doctorate degree holders who would like to stay locally. There is a wealth of talent in the tech area and in digital marketing across the Metroplex and experienced talent can be found throughout Texas. There is also huge infrastructure of contract manufacturers, distribution vendors and service providers that rate with the best across the country and are found locally and they are great to work with.
The internet is still a fast-growing and ever-changing organism. Facebook, Google and Amazon are a few that require a full-time education just to keep pace with the changes. However, these companies are making it possible to compete with large corporations and have shown they can help create successful companies starting with limited resources, which was a dream only several years ago.
In general, do you see the present business climate as challenging, uncertain or optimistic and why?
We see the current business climate for Nuvothera as optimistic. The timing is right to be offering alternative OTC treatments to consumers as the health care system and insurers shift the burden of health care costs more on the consumer. Cash payment will become more of the norm and consumers are already seeking more self-treatment options as rising drug costs, insurance reimbursement, high copayments and high deductibles have a greater impact on their disposable incomes.
If you could make one and only one change in the present business climate, what would it be and why?
If we could see a single change in the business climate, it would be an even more rapid adoption of e-commerce by consumers. The internet offers a greater variety of products and services, which is good for the consumer. It is leveling the playing field and creates opportunities for companies like Nuvothera. However, retail drug stores like Walgreens and mass merchandisers like Walmart and Target won’t go away anytime soon, so retail will be our next sales channel, which will allow us to reach even more customers and a greater target market for our current and future therapeutic skincare products. The internet is a very important stepping stone.
1120 S. Freeway, Fort Worth
Number of employees: 3; more than 30 outsourced