Why this global life sciences COO believes relocation to Charleston, SC, was key to achieving next-level successThorne Healthtech makes name for itself globally from base in Charleston, SC see more
Compliments of Investment Monitor
After visiting 100 potential sites across eight different states, nutraceutical company Thorne HealthTech began a huge relocation to Charleston, South Carolina, in 2014 and has never looked back. Here, Thorne COO Tom McKenna explains what drove its decision and subsequent success.
There are many reasons why a life sciences business might make the monumental decision to relocate their company’s headquarters or manufacturing base either nationally or internationally. Choosing exactly where to move is a significant challenge that requires extensive research, visits and careful evaluation.
This was a challenge that Tom McKenna, chief operating officer at Thorne HealthTech, faced first-hand when he led the company’s relocation some 3,500 miles (5,600km) across the US, from a small town in northern Idaho to one within greater Charleston, South Carolina. Here, he shares his experience of the big move and why he feels the relocation was more than worthwhile.
Thorne was founded in 1989 as a manufacturer of premium-quality nutritional supplements. We have since created digital health solutions providing diagnostics and analytics to identify unmet nutritional deficiencies and provide world-class wellness and prevention education. Our goal is to help people at all stages of life to live and age more gracefully.
We believe the future of wellness is personal. For the first time in history, with the cutting-edge advancements in sequencing technology, artificial intelligence and nutritional research, we can now efficiently offer personalised approaches to wellness, which were previously reserved for late-stage disease care or academic research. We strive to be the differentiated leader in the wellness industry by deploying our scientifically rigorous approach to supporting personalised health and wellness.
What prompted the move from Idaho and what were you looking for in your new location?
In 2013, we recognised that by 2018 we would be out of capacity at our manufacturing facility. While there was plenty of available land in the area, our decision not to expand locally was based on utility capacity, lack of local labour and challenges in attracting talent, as well as the significant distance from the airport and major roadways.
We first looked at around 1,000 different options across all 50 states. We narrowed it to 100, and I personally visited every one of those over a two-year period. During that time, we were introduced to South Carolina’s then governor of state, [Nikki Haley]. She suggested the Charleston region and we looked at some sites. The place we ended up was a no-brainer compared with all the other options. After two years of trying to find a home, when we finally came to Charleston we thought ‘that’s it’!
The key criteria in our decision-making included a business-friendly environment; a robust, affordable and available talent pool with comparable salaries to Idaho; proximity to the local airport and major transit ways; an appealing area for staff to relocate; and attractive state and local incentives. Charleston ticked all these boxes.
What are the risks during a business relocation and how did you mitigate these?
One risk is losing or damaging a critical asset or transitional requirement among the significant multitude of moving parts. This required detailed, almost military-like planning and execution to move some 2,500 pieces of equipment, furnishings and tens of thousands of inventory items.Thorne HealthTech’s corporate office and manufacturing site is located at 620 Industrial Blvd, Summerville, South Carolina. (Photo courtesy of Thorne HealthTech)
To make sure there are no operational disruptions, you also need a certain critical mass of existing staff to move with you, in many cases early, and to stay at least for a while to initiate operations, recruit and train new staff. We worked with Charleston’s economic development organisation called Charleston Regional Development Alliance (CRDA). CRDA helped facilitate and participate in 14 ‘familiarisation’ trips for a total of 140 employees and nearly 300 persons. We would kick the trip off with a seminar on the area and the community, led by CRDA. We would then hop on a bus and CRDA would take us on a three-hour tour around different neighbourhoods and areas, down to the beach and out for a barbeque.
It was very informal and almost familial, and to their credit they showed up 14 times to do these things, each time with welcome bags. CRDA was very helpful in getting folks to see the value of the local community. In fact, CRDA was critical in helping us convince 40% of our Idaho-based staff to relocate to South Carolina. When we got here, they were very helpful on the hiring side too.
What attracted your employees to the Charleston region?
What the greater Charleston area provides is a culture that is perhaps not a lot different from the Pacific Northwest. Our employees love to be in the outdoors – they love to hunt, fish, camp and hike. You can do all those things that you could do in Idaho here in Charleston. The big difference is that instead of doing those things in a short window in the summer, in Charleston you can enjoy them for 12 months of the year, thanks to the climate.
The ocean was another big attraction for folks, as was the proximity to multiple downtowns. In Idaho, the closest city was a two-hour drive away. Here, you can generally be in downtown Charleston in 30 minutes or less, depending on where you live. At the same time, it is not a huge metropolitan area like New York City, Philadelphia or Washington DC, for example.
Are there any ways Thorne HealthTech is more competitive with operations in Charleston?
We are now able to attract more diversified and talented staff, in greater numbers. The proximity to the airport and interstate highway transit has greatly reduced our freight costs and improved our supply chain management and timelines. When we wanted to ship and receive materials in northern Idaho, the largest interstate was an hour away. Here, it is just blocks away.
Our new facility and others we are now expanding into have materially improved our productivity and lowered the cost of operations. We now produce more items in-house and have greater control over our supply, and as a result have dramatically reduced our order fulfilment timelines, which are now comparable to Amazon. We continue to feel we made the right decision in our move to Charleston.
Thorne undertakes IPO for growth in SC see more
A life-science company that packed up shop and moved the bulk of its business to the South Carolina coast from the mountainous West a few years ago has taken another big leap.
Only not quite as big as it had hoped.
Supplements researcher and manufacturer Thorne HealthTech Inc. launched its initial public offering last week, but not before dramatically downsizing the size of the deal.
The company had been hoping to haul in as much as $135 million by selling shares for as much as $15 each. It backed off that number last week and ended up raising $70 million.
The Nasdaq-listed shares started trading when the opening bell rang Thursday under the symbol “THRN” and stumbled badly out of the gate, falling 24 percent by the end of the session.
It was a decidedly chilly market debut for a company that’s aiming to make deeper inroads into the growing and highly fragmented personal health-and-wellness industry, where no single player has amassed more than 5 percent of the market, according to Thorne’s calculations. A report by Grand View Research earlier this year forecast the size of the dietary supplement business to nearly double to $271 billion by 2028 from $140.3 billion in 2020.
Against that backdrop, Thorne said its goal is to redefine “consumer health and building a brand with science-backed personalized products that meet the highest standards of quality, safety and efficacy.”
“We have a significant opportunity to continue to penetrate the product categories and channels we compete in today,’” according to its IPO filings.
The stock offering is the latest step in that plan. Up to $20 million of investor proceeds. along with existing cash reserves, will fund the development and testing of new dietary supplements as well as the company’s recently acquired Onegivity Health clinical research platform. As much as $30 million will go toward sales and marketing initiatives and Thorne’s expansion into new global locations. The rest will be used to pay off debt from a Japanese lender that matures next year and for other general purposes.
“Our organization has never been more excited about the future growth potential for and impact of our company as we are today,” CEO Paul Jacobson wrote in a letter to prospective investors.
While it lists New York City as its home office, Thorne is essentially a South Carolina business.
It was nearly five years ago when the company announced plans to move most of its key operations to a new 270,000-square-foot building in Summerville from northern Idaho. The deal included a $35 million capital investment and 350 jobs of all varieties.
“This facility consists of manufacturing and production, research and development, medical affairs, engineering, quality management, laboratory testing, brand marketing, inside sales, customer service, finance, legal, human resources, warehousing and materials management, procurement and safety functions,” Thorne said in a recent filing with the Securities and Exchange Commission.
It also noted that it recently inked a new five-year lease for an additional 115,500 square feet of storage and distribution space in Summerville.
“This will expand our finished goods warehousing and shipping capabilities to the eastern United States and international markets,” the company said.
The business went by Thorne Research when it embarked on its cross-country relocation quest in 2014. By then, it had outgrown its manufacturing base in Sandpoint, Idaho, and wasn’t sure it could add onto its building or even extend its lease. Over the next two years, it scouted dozens of sites around the country. The Lowcountry and York County near Charlotte emerged as the two top contenders.
Jacobson thought the Charleston region would be appealing to customers and other visitors. Also, Thorne thought it was a plus that the area was growing and home to several colleges, an established medical research community and a major U.S. seaport.
“It didn’t hurt any that Charleston is a culturally diverse and interesting place,” Jacobson said in a 2016 interview. “That’s important to us because it allows us to attract the kind of people we want to recruit.”
The former Goldman Sachs banker forged an equally unconventional path to the corner office at Thorne, which was started in Seattle in 1984 and relocated six years later to Sandpoint, not far from Spokane in eastern Washington. He recounted in his investor letter how he came to acquire the business with some partners in 2010, inspired in part by a former drug industry boss he met while serving on a board of directors.
“He was tired of me asking how big pharma could turn compounds that barely outperformed placebo or natural products into multibillion-dollar drugs, and one day turned to me and said, ‘If you think you’re so smart, go start a natural products company.’ He said that in order to do it right we would need to compile clinical data to demonstrate the efficacy of a more natural approach to health. ... This sparked my interest to determine whether he was correct, driving me to spend several years researching the natural product industry,” Jacobson wrote.
Thorne now develops, manufactures and ships about 300 different supplements, health testing kits and other wellness products that it sells to 3 million customers through wholesalers, retail stores, online resellers and a growing subscription business. The company also said it works with 42,000 health care professionals and thousands of pro athletes.
The IPO documents put some hard numbers on the Thorne’s financial trajectory.
Sales jumped 35 percent last year to $138.5 million, suggesting the company benefited from the health-and-fitness boom that emerged during the COVID-19 crisis.
And while Thorne hasn’t turned a net profit on an annual basis — it lost $4 million last year — it was in the black as of June 30 by a margin of $4.4 million. Meanwhile, revenue continues to climb sharply, rising 38 percent from the first six months to $87.4 million.
“We have experienced significant sales growth of our supplements and health tests through the acquisition of new customers and strong customer retention,” Thorne said.
While its debut on Wall Street was a bit on the cold side, Wall Street appeared to warm up a bit to the newcomer on its second day in the public markets. Shares rebounded 10 percent Friday to close at $8.35.
Over twenty experts to speak on major business issues see more
Subject matter leaders from across state, nation to cover what business needs to know to thrive despite pandemic, how to leverage state’s fastest-growing knowledge economy segment
SOUTH CAROLINA – September 2, 2020 – SCBIO will host a half-day virtual program September 23 -- Life Sciences Boot Camp: Building Your Brand & Business In a Pandemic – to inform and connect businesses, educators and professionals from across the state on leveraging opportunities, identifying trends and overcoming challenges that face organizations interested in tapping into South Carolina’s fastest-growing industry segment.
To be held completely online, the program will run from 8:15 a.m. until 12:15 p.m. on Wednesday, September 23rd. The program is delivered free to all SCBIO Members and Investors, and for a nominal fee of $50 to all non-Members. Students and media may also attend free of charge. Six sessions featuring over 20 noted presenters will precede a closing Virtual Networking Session for all attendees. Confirmed topics and speakers include:
- Search for a Cure: A National Update on the Global Pandemic – featuring a live national report from PhRMA executive Sharon Lamberton on success in battling the COVID-19 pandemic, and what lies ahead for America
- Marketing in a Pandemic: Building Your Brand & Your Topline – despite the economic turndown, some businesses are enjoying even great success – and are positioning themselves for an even better future. Learn the secrets to thriving, not surviving, during and after the pandemic from Henry Pellerin of Vantage Point, Heather Hoopes-Matthews of NP Strategy and Jessica Cokins of Thorne Research
- Best Practices in Talent Recruiting, Retention & Development – Nephron's Lou Kennedy, Arthrex's Jimmy Dascani and ERG's Matt Vaadi share how the state’s life sciences leaders are attracting, training and retaining top talent – and offer ideas your organization can deploy right now
- Partnering Effectively with Higher Education & Research Universities – tap into the wealth of resources, knowledge and experience prevalent in the state’s research universities to enhance innovation and success. Enjoy insights from Chad Hardaway of USC’s Office of Economic Engagement, Michael Rusnak of MUSC’s Foundation for Research Development, and Angela Lockman of Clemson
- Leading Virtual Teams Effectively – the pandemic has showed us that working virtually is here to stay. Find out how to make your organization collaborate seamlessly, efficiently and effectively -- wherever your colleagues are located -- from Annie McCoy of ChartSpan, Andrew Collins of Alcami and Jenni Dunlap of Parker Poe
- Pivoting with a Partner: Collaborating to Grow Your Business – learn how to successfully identify and partner with other organizations to expand and enhance product/service offerings. Hear incredible stories from the teams at Zverse/Phoenix Specialty and Rhythmlink, ZIAN and MUSC as they share their stories -- and how you can find your next great opportunity.
The program will end with a Virtual Networking session offering attendees to chat with leading economic development professionals including Stephanie Few of Womble Bond Dickinson, Tushar Chikhliker of Nexsen Pruet, and John Osborne of Good Growth Capital for conversations on Onshoring, Incentives, Accessing Capital and more.
To register or for more details, visit the Events page. Interested students and media members are invited to attend, with advance registration, at no cost.
SCBIO is South Carolina’s investor-driven public/private economic development organization exclusively focused on building, advancing, and growing the life sciences industry in the state. The industry has an $11.4 billion annual economic impact in the Palmetto State, with more than 675 firms directly involved and 43,000 professionals employed in the research, development and commercialization of innovative healthcare, medical device, industrial, environmental and agricultural biotech and products. The state-wide nonprofit has offices in Greenville, Columbia, and Charleston, and represents companies in the advanced medicines, medical devices, equipment, diagnostics, IT, and healthcare outcome industries. Life sciences is recognized as the fastest-growing segment of South Carolina’s knowledge economy.
For additional information on SCBIO, visit www.SCBIO.org.
Many major life science firms have made the move to the Charleston region, and more are on the way see more
Compliments of Industry Today
December 19, 2019
Charleston leads the nation for job growth in scientific R&D firms. In the past two decades, major life science firms have made the move to the Charleston region. Charleston is home to 75+ medical device and pharmaceutical manufacturers, research laboratories and service companies. Life science executives across the globe are discovering that the Charleston region offers what many other larger, oversaturated markets cannot: a lifestyle that attracts and retains top talent, easy connections to life science and healthcare executives, and business-friendly regional and state support.
Read the full article HERE.
Thorne scores TKO with UFC partnership see more
Las Vegas and New York – UFC®, the world’s premier mixed martial arts organization, today announced a new multi-year, global marketing partnership with Thorne that names the company as the “Official Sports Performance Nutrition Partner” of UFC. Thorne, one of the world’s leading health and wellness, technology, and supplement companies, also becomes an “Official Partner of the Performance Institute®”, UFC’s state-of-the-art training and research facility that has served more than 400 athletes since opening in 2017.
Under the terms of the agreement, Thorne’s line of NSF Certified for Sport products will be integrated into supplement plans created by UFC-registered dietitians for athletes training at UFC’s Performance Institutes in Las Vegas and Shanghai. Thorne will also have ownership of the Performance Institute Nutrition Stations, dedicated areas that provide individualized health and wellness solutions to UFC’s athletes. “Embedded,” the all-access video content series featuring Dana White and top UFC fighters, will also highlight Thorne as Presenting Partner of select episodes, with unique product integrations. Additional partnership enhancements include integrated digital marketing campaigns, VIP experiences, consumer sweepstakes, and hospitality.
Said Clint Wattenberg, Director of Sports Nutrition, UFC Performance Institute: “Thorne is the unquestioned leader in quality and innovation in the sports nutrition supplement industry, making them the perfect match to support the UFC PI and the athletes who choose to use our services. This UFC-Thorne partnership shows UFC athletes, as well as consumers, where to find the safest and highest-quality products available.”
Added Jeff Novitzky, Vice President of Athlete Health & Performance at UFC: “We’re thrilled to bring Thorne on board as our Official Sports Performance Nutrition Partner. Thorne is an industry leader with an unmatched reputation for quality and safety in their nutritional products and supplements, including what all UFC athletes should look for in making safe sports supplement choices, third-party testing for banned substances. Through decades of clinical research and science, Thorne has proven that its products are scientifically backed, safe, and free of banned substances.”
“Thorne has long been committed to providing scientifically backed natural solutions for the most unique and complex health and wellness issues,” said Paul Jacobson, CEO of Thorne and Onegevity Health. “When we were approached by UFC to assist in addressing athlete health and performance issues, we felt we could help by deploying our Onegevity health intelligence platform, including testing, data-based solutions and Thorne supplements. We are excited about this new partnership and honored by the trust UFC has shown in Thorne and our ability to help address both the immediate and long-term health needs of their athletes.”
South Carolina's life sciences industry is booming. Read on for details... see more
From pharmaceuticals and medical devices to research and laboratory testing, the state's life sciences field is booming. The Charleston and Lowcountry region is home to many established companies and start-ups making a mark on the biomedical and health industries. Read on for the full story from Charleston Business Magazine's 2018 State of the Lowcountry Report.