Can you stop an epidemic of antibiotic over-prescription by creating a supplement that makes people just overall more healthy? That's the belief that drove the surgeon-entrepreneur behind EZC Pak out of Los Angeles.
The entrepreneur said repeatedly that America faces a growing crisis of antibiotic resistant bacteria and that this problem keeps growing as doctors over-prescribe antibiotics for viral conditions because patients demand them. So... in order to make sure that people suffer less from viruses, the entrepreneur created a supplement made out of echinacea, zinc, and Vitamin C to boost the overall immune system. The entrepreneur says that, in his day job as a surgeon, antibiotic resistance has already become a problem, leading to resections and amputations that wouldn't have been needed had the infections been tamed by traditional antibiotic treatments.
Mark is the first to question the good doctor's premise that health care responds so willingly to consumer demand but the entrepreneur responds that he thinks this is the result of home gene testing kits, having too much information about themselves, and there being too much medical advice on the internet. He also thinks that much of the problem stems from consumer marketing. The entrepreneur hadn't set out to create his own product but, every time he went looking for one to recommend, none of what he found was based on any kind of study or was, in his opinion, in the wrong dosage or form.
Still, when Mr. Wonderful asks for hard numbers, the entrepreneur says that in the prior year, EZC Pak has generated $1,200,000 in sales, $850,000 in "gross" profit, and around $150,000 in "net" profit after a $750,000 direct to consumer ad buy. (If the math doesn't add up for you either, then you will understand the quote marks around "gross" and "net".)
The EZC Pak is intended to be taken daily and a 5-day dosage retails for between $15.99 and $19.99 with claimed 80% margins. The vast majority of sales has been through chain retail.
Making A Deal
Lori was the first to vocalize her support for the idea of over-perscription of antibiotics and the power of Zinc as an immune booster but, when the entrepreneur continues to talk without acknowledging her, she drops out of the deal because she feels ignored and challenges the entrepreneur to prove otherwise. When he responds that he likes her because she's positive and upbeat, Lori states that she feels "chavaunist feelings" coming from him because he wouldn't make eye contact with her.
Robert states simply that the product isn't for him and he drops out.
Mark takes issue with the entrepreneur dedicating his time to a product like this, something Mark Cuban is known to have strong feelings about, when the world could use more doctors. Guest shark Daniel Lubetzky though, says that he finds the entrepreneur to be a little to much of a know it all and, because he doesn't connect the product to being a solution for the problem described, is out. Mark then says he just flat out doesn't think it works and also leaves the deal.
With Kevin as the last shark, he begins by stating that the entrepreneur has not had the best pitch ever. In fact, he just didn't like the pitch but thinks that it's still a solid business. So, he offers $125,000 in exchange for 5% equity and a $0.60 per unit royalty into perpetuity. The entrepreneur has the balls to ask what level of effort he can expect from Kevin and Kevin responds that he will only get paid if the product sells so he believes that their "interests are aligned."
The entrepreneur then counters Kevin as a $1 per unit royalty that expires in three years, stating that he expects to move 200,000 units in the current year. Kevin seems open to it but wants the royalty to expire after earning $500,000. The entrepreneur responds with $400,000 and they end up splitting the difference at $450,000.
So not only does one of the least impressive pitches on the show land a deal with Mr. Wonderful, but he does so while ensuring that only $133,333 was lost from the value of his company
- Regardless of the merits of this pitch, your Stats Shark does agree that there are too many antibiotics being prescribed. And he agrees that, in this case, it is in part doctors responding to the demands of patients. Your Stats Shark, himself, has a friend who always asks for antibiotics every time he gets the sniffles and, for some reason, thinks they're also effective against viruses. And this is a smart, well educated man. If someone like him can't understand the difference, then perhaps, yes, there is a real problem. Whether this is the solution is a separate question.
- Queue big fart sound. Seriously... your Stats Shark takes issue with people who take issue with people having too much information, especially about themselves. Can we stop treating people like they're children?
- Your Stats Shark is unaware of any antibiotic marketing but... do message him on Twitter should an instance be discovered.
- Maybe it's easy to forget some times but Shark Tank is still a "reality" show and sometimes a lot of drama is manufactured by producers through leading questions fed to the participants or clever edits. Your Stats Shark has no opinion on whether this entrepreneur purposely ignored Lori but it certainly didn't look good on television.