The Press Democrat
|NeilMed makes its mark
'Oprah effect,' Web generate sales surge for SR up-and-comer's sinus remedy
May 25, 2008
NeilMed Pharmaceuticals workers package sinus rinse products at the
company's Santa Rosa facility. NeilMed has seen its sales triple in the
past two years.
Headquarters: Santa Rosa
Product: Over-the-counter sinus rinse and moisturizer kits
Owners: Dr. Ketan Mehta, president
Nina Mehta, CEO
Markets: Drug stores, big-box retailers and supermarkets in the United States, Europe, Australia, Canada and New Zealand
|With some help from Oprah Winfrey and the Internet, Santa Rosa's NeilMed Pharmaceuticals Inc. is in growth mode, tripling sales of its sinus products in just two years.
A family business that started in a doctor's office, NeilMed now has more than 250 employees and is looking for new space near Charles M. Schulz-Sonoma County Airport.
"We hope a lot of households will know NeilMed in the next decade," said Dr. Ketan Mehta, the Santa Rosa physician who launched the company in 2000.
NeilMed's sinus rinse kits are found in the top U.S. drug store chains, supermarkets and big-box stores, including Wal-Mart and Costco. In recent months, the company has expanded sales to Europe, Australia, Canada and New Zealand.
NeilMed is part of Sonoma County's $1.5 billion medical technology sector, which includes industry leaders such as Medtronic. The sector is growing as technology companies come up with new solutions to medical problems for a rapidly aging population.
Dr. Mehta, who left India in 1981 to study medicine in the United States, came up with the idea for NeilMed after years of
suffering sinus problems.
He found that rinsing his sinuses with salt water helped his symptoms.
Nasal cleansing had been practiced for thousands of years in his native India, but it wasn't popular in the United States.The market for sinus remedies is nothing to sneeze at. About 36 million Americans suffer from chronic sinus problems and millions more get occasional bouts of rhinitis, an inflammatory condition that causes stuffy noses.
Americans spend about $6 billion a year on treatments for sinus symptoms.
Dr. Mehta, 51, a pulmonary and critical care specialist in Santa Rosa, decided to develop a natural system that would make it easy for people to take care of their own sinuses.
His nasal rinse kit includes a plastic squeeze bottle and premeasured packets of a sodium compound to mix with warm distilled water. Users squeeze the solution into one nostril at a
time until it drains out the other nostril.
Study shows good results while the procedure may feel uncomfortable for beginners, it becomes routine after a few tries, Mehta said. The saline mix is formulated so it doesn't sting or burn, he said.Doctors and their patients have reported good results with the natural treatment. Last year, a University of Michigan medical study showed sinus patients who used a nasal rinse reported fewer symptoms than those who used over-the-counter sprays.
By 2001, Dr. Mehta was selling 6,000 of the $9.95 kits each month, mostly in Long's drug stores, Walgreens stores and Kaiser Permanente pharmacies in California.
NeilMed, named for Mehta's 14-year-old son, got a boost in 2005 when its products were part of a segment on sinus treatments on ABC's "Good Morning America." By mid-2006, its sinus kits were in additional stores and NeilMed was selling 60,000 units every month.
The company moved into a 54,000-square-foot building near the airport that year and grew to 125 employees. Meanwhile, it had secured several patents and applied for others.
The Oprah effect
Since 2006, the company has introduced four new products, including a gel, mist and spray for moisturizing dry sinuses.
NeilMed also came out with an updated neti pot, an ancient Indian device for rinsing the sinuses. NeilMed's version, which looks like a small teapot, lets users pour the salt water solution into one nostril at a time. The neti pot is for people who prefer its gravity flow to the squeeze bottle.
Then came Oprah.
Neti pots became a consumer sensation in April 2007 after Dr. Mehmet Oz, a physician and regular guest on Oprah's popular TV talk show, did a segment on them. A sinus sufferer demonstrated their use and the rest is history.
Neti pots began appearing in blogs, message boards and YouTube videos. Viewers looking for them on the Internet quickly discovered NeilMed's Web site, and orders took off. Neti pots, which were 1 percent or 2 percent of NeilMed's sales, suddenly grew to 10 percent or 15 percent.
"The Oprah segment created a lot of awareness," said Nina Mehta, Dr. Mehta's wife and NeilMed's chief executive officer. "Major retailers began asking if they could buy our neti pot."
NeilMed was in good position to respond to the neti pot craze because it had a strong distribution system in place, Ketan Mehta said.
Today, NeilMed sells 180,000 units of its products every month, at prices ranging from
$3.99 to $18.99. The basic sinus rinse kit now sells for $11.49.
The private company doesn't disclose revenues or earnings, but Ketan Mehta said it has been turning a profit since 2006.
He credits much of the success to his 47-year-old wife, a former physical therapist who leads the company's marketing and distribution efforts.
"She works with tremendous passion," he said.
Later this year, NeilMed products will appear in Kmart, Target and CVS/pharmacy stores.
At the company's Santa Rosa headquarters, workers prepare the powders,
gels and liquids used in NeilMed products. They assemble and package the kits for shipment all over the world.
They also operate a call center at the Aviation Boulevard location. The company is now looking for more warehouse space and is developing new products, according to Dr. Mehta.
It's also planning to automate the manufacturing process, he said. While some manufacturing jobs will be eliminated, NeilMed should keep the same number of employees because of internal growth, Dr. Mehta said.
The company is hiring for about 20 positions, ranging from chief financial officer to customer service representatives.
NeilMed has attracted potential buyers, but the Mehtas said they aren't interested in selling.
"We want to run it ourselves right now," said Ketan Mehta. "Our goal is to create a legacy."