Profit and Loss Statement Revenue FY1 FY2 FY3 Low $249,600.00 $299,520.00 $324,480.00 Medium $1,965,600.00 $2,358,720.00 $2,555,280.00 High $811,200.00 $976,040.00 $1,054,560.00 Sterile $0.00 $0.00 $780,000.00 Adherence Calls $6,000.00 $8,000.00 $10,000.00 Total Sales $3,032,400.00 $3,642,280.00 $4,724,320.00 Cost of Goods FY1 FY2 FY3 Low $124,800.00 $149,760.00 $162,240.00 Medium $1,310,400.00 $1,572,480.00 $1,703,520.00 High $561,600.00 $673,920.00 $730,080.00 Sterile $0.00 $0.00 $624,000.00 Cost of Goods $1,996,800.00 $2,396,160.00 $3,219,840.00 Gross Profit $1,035,600.00 $1,246,120.00 $1,504,480.00 Operating Expenses FY1 FY2 FY3 Rent $4,000.00 $4,000.00 $4,000.00 Renovations $50,000.00 $0.00 $10,000.00 Supplies $7,000.00 $5,000.00 $5,000.00 Bank Fees $32,000.00 $35,000.00 $38,000.00 Software $37,000.00 $7,000.00 $7,000.00 Accounting $8,500.00 $10,000.00 $11,000.00 Attorney Fees $18,000.00 $15,000.00 $18,000.00 Delivery Expenses $10,000.00 $11,000.00 $12,000.00 Internet/Phone $2,500.00 $2,500.00 $2,500.00 Equipment $77,0000 $2,000.00 $16,500 Sterile Equipment $0.00 $0.00 $15,000.00 Vehicle Expenses $9,000.00 $2,200.00 $2,200.00 Payroll Expenses FY1 FY2 FY3 Pharmacists $300,000.00 $315,000.00 $325,000.00 Technicians/Drivers $108,000.00 $130,000.00 $152,000.00 PCCA Training $16,500 $1,000 $1,000 Taxes/Service Fees $79,000.00 $89,000.00 $95,400.00 Benefits $125,000.00 $133,500.00 $143,100.00 Total Expenses $883,500.00 $762,200.00 $862,700.00 Net Profit $152,100.00 $483,920.00 $641,780.00 Central Compounding Alyssa Lear, Spencer Schlecht, Julianna Slomer, Katie Van Golen Faculty Coach: Karen Pater, PharmD, CDE Independent Coach: Dan Asti, RPh Pennsylvania Pharmacist Association Achieving Independence Competition 2018 CONCEPT/OPPORTUNITY LOCATION MARKETING/STRATEGY SERVICES OFFERED FINANCIALS TECHNOLOGY Services: • Non-sterile and hazardous compounding; sterile compounding added FY3 • Delivery to pharmacies by company van on days MWF • Adherence/refill reminder calls/texts • Call-in counseling with pharmacist • New-to-therapy calls • Open 6 days a week (7 am-7 pm M-F, 9 am-5 pm Sat) USP General Chapter <800> becomes official on December 1, 2019 and will have major effects on independent compounding pharmacies. Significant and costly renovations will be required for pharmacies to be compliant, likely causing many to eliminate their compounding service altogether, creating a greater demand for compounding pharmacies and requiring innovative solutions to fulfill patient prescriptions. Central Compounding is an independent central fill compounding pharmacy that provides surrounding pharmacies with the ability to fulfill compound prescriptions for their patients. Our mission: Affordable, personalized, and quality compounds at your local pharmacy Our Phased Marketing Approach: USP Compliant Measures: • External ventilation with roof access, including HEPA filters • Negative pressure between 0.01-0.03 in. WC in HD room • HD storage (including negative pressure) • CSTDs used for handling HDs Compounding Software: PK Software The CompounderRx package Problem: USP <800> will require pharmacies to make renovations which may cost over $100,000 Impact: Remodeling costs have zero ROI and may force pharmacies to eliminate compounding service Solution: Centralize compounding services to reduce cost burdens and generate profit Demographics: Allegheny County Population estimate: 1,223,048 Number of PCCA-member pharmacies: 32 Number of hospitals: 29 Number of hospice centers: 21 Central Compounding is located within Allegheny County with easy access to compounding pharmacies that may choose to partner with us. Central Compounding services our five founding pharmacy partners during our opening year. Central Compounding continues to grow & partner with more pharmacies during FY2 & FY3. *No storefront or access to the public Pharmacy receives patient Rx for compound Rx is billed then sent to Central Compounding through PK Software Central Compounding compounds and packages product Compound is delivered to Pharmacy Pharmacy is billed for compound via monthly statements Advertising: • Personal outreach to local pharmacies • Monthly newsletter for pharmacies • Networking through organizations (PPA, PSHP) Central Compounding adds community sterile compounding during FY3. Clean Room Non-Sterile/Sterile Room Hazardous Room Storage Delivery Office Space Demographics: Washington County Population estimate: 208,261 Number of PCCA-member pharmacies: 2 Number of hospitals: 4 Number of hospice centers: 3 Rx Fill Process: Top reasons patients require compounded medications: • Hormone replacement therapy • Pain management/hospice care • Dermatology • Neuropathy • Sports medicine • Veterinary • Pediatrics • Infertility Pricing of products: • Compounds are categorized based on complexity and priced based off of a minimum cost for each category • Ex) Testosterones have a minimum cost of $30 to make 34’x13’ 34’x10’ 34’x17’ 12’x24’ 12’x16’ 16’x40’ The pharmacy will be financed through 2 phases of equity investments from personal funding and our pharmacy partners. Phase 1: We have allocated $700,000 in investments in exchange for 75% of the company split between our 5 pharmacy partners based on their investment while the remaining 25% is split between us, the 4 pharmacy owners, who will be attributing the remaining $100,000. Phase 2: After FY2, in order to finance the ability to sterile compound, another round of equity investment up to $100,000 in future pharmacy partners will be acquired. • Positive pressure between 0.02-0.05 in. WC in sterile room • Separate HD/Non- sterile/sterile rooms • PPE garbing area easily accessible Our initial five founding pharmacy partners are located in Allegheny and Washington County and are within 12 miles of Central Compounding.