By giving known molecules new therapeutic potential, PROVEPHARM LIFE SOLUTIONS is building a global pharmaceutical group. Its strategy? Fast-track innovation and treatments that are accessible to all. We talk with CEO Michel Féraud.
A researcher eager to find solutions!
Michel Féraud nearly didn’t become a chemist. “I was studying organic chemistry at Saint-Jérôme University in Marseille, and a professor made it clear that if I wasn’t motivated then it would be preferable for me to transfer to a different course. That really got me thinking. From that point on, I saw chemistry as a kind of Lego set where molecules could be transformed into drugs to treat people or into perfumes to make them feel good”.
With this new motivation, Michel got a PhD and finished top of his class, as did his childhood friend Christophe Baralotto. The year was 1997. Together, with no equity or clients, the two of them decided to found their own business that would later become Provepharm Life Solutions. Before thinking about what they needed to find, the two new chemists drew up a roadmap in accordance with where they wanted to go. “We had no idea what we were going to do, but we knew exactly where we wanted to do it: all around the world. We also wanted to maintain our local roots in Provence. And that’s what we have done”.
To fill its order book, the company began by offering its services to other laboratories like L’Oreal, Johnson & Johnson and Aventis. At the same time, it looked for investors to obtain financing whilst scrupulously maintaining the independence of its shareholding structure. “For example, we generated funding by issuing convertible bonds, running completely counter to practices at that time. By taking risks, we were thus able to retain a majority stake in our company. In an ever-changing world, you can’t stand still!” This model, which consists in financing R&D via external capital whilst enabling the founders to retain control, didn’t deter investors.
In 2018, the Bettencourt and ArchiMed family fund – the leading independent European fund dedicated to this sector – took an equity stake. And Michel Féraud and Christophe Baralotto still own 67% of their company’s shares. These investors were all the more reassured given that they know how to work with two serial entrepreneurs. They were, for example, behind the creation of IT company MailinBlack, anti spam specialists.
Reinventing methylene blue
2007 was a pivotal year for Provepharm Life Solutions, with the reinvention of a secular remedy: methylene blue. This molecule, discovered in 1876, has numerously scientifically-acknowledged antiseptic and antioxidant qualities. However, because it also contains certain potentially toxic heavy metals, its therapeutic use was gradually banned. By patenting a process that enables these substances to be removed, the company quite simply created Proveblue® methylene blue and used it to develop a new antidote to severe blood poisoning – as well as a medical device used as a marker in surgical visualisation. Country by country, national drug agencies began giving this regenerated molecule marketing authorisation.
“It started with France in 2010, and today we have a presence in some 35 countries worldwide”. Among the most recent countries to grant marketing authorisation are Japan, Korea, and the United States via FDA approval. “In 2016 we signed a 7-year exclusivity deal to market Provayblue™ by obtaining orphan drug status”. This deal is conditional on ensuring permanent product availability over that entire period throughout the United States. “To meet this requirement, we currently have a strategic stock of 200,000 units in the US, i.e. a similar scale to Europe. This represents 6 months of treatments”. Michel does not see this as a constraint but as a normal requirement. “We are 100% focused on patients.
It is inconceivable that any person should have to forego their therapy because a laboratory has been incapable of properly managing its supply chain or – worse still – has undertaken financial arbitrage. All our research teams are fully focused on a shared objective; an innovation should help save lives. Our industrial teams ensure that our products are always available in order to meet this commitment. Although these inventory levels require substantial capital, they are indispensable”. To meet the American market’s new prospects, the Company has recently opened a subsidiary in Philadelphia. “The logical thing to do would have been to set it up in Boston, global pharmacy’s new Eldorado, but we wanted to economise our resources by choosing a city with less property pressure for the company, and for our employees because higher rents require higher wages. This approach represents a way of focusing our investments on human value, and thus on research”.
A socially-inspired philosophy of innovation
The reason Provepharm Life Solutions’ R&D teams are so efficient is probably because shareholders and management give them the time they need. “Our new projects aren’t steered by Excel spreadsheets where, at the end of the day, nobody really knows what they correspond to. This runs the risk of putting a stop to a good idea that could have been a success. Indeed, Viagra’s success was the result of a side effect of a drug originally designed to treat cardiovascular diseases.
This scientific error has provided Pfizer with billions of euros in additional revenue. At Provepharm Life Solutions, we instil a real desire to be enterprising in all our staff. In a world searching for meaning, we want to give intelligence real meaning and avoid sheep-like behaviour. The global outpouring of generosity that followed the fire that badly damaged Notre Dame Cathedral in Paris shows to what extent, when a cause is a just one, millions of people can quickly rally round. I believe that companies should convey a message. Ours is that there is a third way other than biotechs or generic specialists, and that way is the one that consists in reinventing molecules with ancient therapeutic virtues by making them compatible with health agencies’ stringent specifications.
This is a way to save enormous resources – both financial and natural – and, most of all, to more rapidly improve millions of people’s quality of life via new and efficient treatments. This highly pragmatic approach speeds up our innovation time. We avoid the need for major fundamental research work. There is substantial scientific literature on these molecules, so why not use all this publically-available knowledge?”
Michel Féraud CEO of Provepharm Life Solutions
Innovating is imagining new things but also giving a new lease of life to existing things.
€42.5 million to accelerate growth
The creation of a new 3,000 m² production unit – a €9 million investment – and the setting up of the new US subsidiary reflect the acceleration of Provepharm Life Solutions’ development. Indeed the Company’s revenue has increased by +27% over the year, to €38 million. To accompany its new projects, the Company has just obtained a €42.5 million syndicated loan.
To head the banking pool, the Company has chosen Societe Generale. “We have an excellent relationship and, more importantly, we share the same values. Just like with my teams, what makes this relationship so strong is a desire to work together. Although all the indicators are positive today, I haven’t forgotten that Societe Generale was there by our side when things were less rosy. They put their trust in me when I chose to retain our teams even though our revenue wasn’t aligned with our investments. So this year, when we needed to choose a bank to head this banking pool to enable us to obtain additional funds, we naturally turned to Societe Generale to steer it”.
Research into a cure for malaria with substantial social responsibility
Among its current research activities, Provepharm Life Solutions is working on a treatment for malaria that is already being supported by the US Army. This is a major issue. According to the World Health Organisation (WHO), 429,000 people died from this disease in 2015 and there were almost 212 million cases worldwide. The Company’s model for its research into these global treatments? A ‘No Gain, No Loss’ strategy.
“We’re not driven by financial profit, although obviously we don’t want to lose money either”. To accelerate its R&D, the Company is therefore counting on the fertilisation of the talent of its members of staff comprising a dozen nationalities and ensuring gender equality that has taken place naturally, with more women than men in the workforce. And women have a strong presence at strategic level too, with 3 female Board members.
The third way!
To end this interview, Michel Féraud is eager to share one of his key factors for success. “Whatever a person’s profession, their sector of activity, you have to be able to show common sense. This third way offers so many opportunities for both businesses and people. Most importantly, it creates social value that can be shared by everyone”. And in this field, Michel and Christophe know what they’re talking about.
Indeed, Provepharm Life Solutions has joined forces with Centrale Marseille to develop the “Dégun sans stage” operation. “Dégun” is local slang for Nobody, so the slogan means “An internship for everyone”. The aim is to develop a network of businesses and government authorities to give students from ‘priority education’ areas of Marseille access to internships. In 2018, the target was increased fivefold, with internships found for 500 students from 9 schools. This year the number will be increased to 800! Partners of this operation include major corporations like Vinci, SMEs and academic establishments such as the Institut de Mathématiques de Marseille.