National sales success moving Luna to expansion phase

BIRTH OF AN IDEA: Dan Aziz, president of Luna Pharmaceuticals, envisions the company branching out beyond prenatal vitamins to lactation and fertility. / COURTESY LUNA PHARMACEUTICALS
BIRTH OF AN IDEA: Dan Aziz, president of Luna Pharmaceuticals, envisions the company branching out beyond prenatal vitamins to lactation and fertility. / COURTESY LUNA PHARMACEUTICALS

Dan Aziz always knew he wanted to be an entrepreneur, but he didn’t know what type of company he’d start until he spent a little time in a Providence supermarket. Interviewing customers for a Brown University class in the nutritional-supplements aisle of a local Whole Foods, Aziz heard persistent complaints about the size and taste of vitamin pills for pregnant women, sparking an idea. Aziz created Premama, a drinkable, prenatal supplement that’s now on the shelves of the same Whole Foods where he was interviewing customers, as well as in Target and infant chain Buy Buy Baby. In September, Aziz’s Luna Pharmaceuticals Inc. closed on the first half of a $1 million funding round led by Cherrystone Angel Group, which allowed the Providence company to hire its second full-time employee and move to expand.

PBN: This may be obvious to many people, but why is it better to drink prenatal vitamins than take them as pills?
AZIZ: These pills are large – they’re called horse pills – and are hard to swallow. The ingredients sometimes make you feel more sick, so drinking water actually helps deal with the nausea. Our powder mixes into water and juice, so they can take it with whatever they can stomach, but the ingredients we have help soothe the symptoms of morning sickness.

PBN: Are prenatal vitamins essential or, like some other supplements, is this something that’s optional to take?
AZIZ: Prenatal vitamins are the only ones that doctors without a doubt recommend still. There is a lot of talk about vitamins and exactly what they do, but particularly folic acid in prenatal vitamins has been proven time and time again to prevent the chance of a child having neural tube defects and spina bifida. All OB GYNs will recommend women take prenatal vitamins three months before she conceives and throughout her pregnancy, then in the later trimester to get iron to further prevent anemia.

PBN: Do you have any competitors in the drinkable, prenatal vitamin space?
AZIZ: There have been a couple new ones come out in the last several months. We were the first to create it and go nationwide.

PBN: Sounds like you are making a lot of progress raising funds. Can you describe the new investments?
AZIZ: Initially we won the $50,000 Rhode Island Business Plan Competition and then we raised our first quarter million in February 2012 and launched our first product in March 2012. Then from spring 2013 to the start of 2014, we raised $275,000 in convertible debt and a bridge loan. In early 2014 we started talking to Cherrystone Angel Group [about the $1 million funding round] to market and hire and make sure we take advantage of this target launch. We got the term sheet signed in June and [in September] Cherrystone had their cap call and they are putting in $300,000 of the $1 million. Then we got $100,000 from the New York Angels and another $75,000 committed from Toronto and we are now in discussions with Boston Harbor Angels and a couple of smaller equity firms in Canada about closing out the round. The first half is there and we are trying to close out the second half by the end of December. With that money we have brought in a brand new hire, a chief marketing officer.

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PBN: Are you ramping up inventory?
AZIZ: We already have our inventories built out. We try to have a three-month rolling inventory on hand.

PBN: Where is Premama made?
AZIZ: All along the East Coast. We have a contract manufacturer in upstate New York and a co-packer in New Jersey. And then it is all warehoused in Cumberland … at the Allied Group.

PBN: Do you do R&D here in Providence?
AZIZ: We have medical and pharmacist advisers that help us come up with formulations.

PBN: Does the creation of Luna Pharmaceuticals signal an intention to eventually expand beyond Premama and prenatal vitamins?
AZIZ: We do envision the possibility of branching out beyond prenatal further down the road. Right now we want to own the prenatal space, but it is possible we extend into general women’s multivitamins in powdered form and more products for women outside the prenatal space.

PBN: Any markets outside of prenatal vitamins that interest you?
AZIZ: Aside from vitamins we are going to be dipping into the lactation and fertility markets, possibly into sleep and energy, all geared toward pregnant women.

PBN: Where do you see Luna in five years?
AZIZ: My hope by then is to be in 17,000 stores in the U.S. We’d have about 10 products out, most under the Premama brand and be doing international sales across Asia and into South America. And at that point I think I am going to be looking to sell the company or, who knows, buy the original investors out at market value and let them part with their money and keep running it in Rhode Island. But I think realistically it is more of a build to sell. •INTERVIEW
Dan Aziz
POSITION: President and founder of Luna Pharmaceuticals
BACKGROUND: An Ontario, Canada native, Aziz studied to be an entrepreneur at Brown University, where he first came up with the idea for a prenatal nutrition product.
EDUCATION: Bachelor’s in commerce, organizations and entrepreneurship from Brown University, 2011
FIRST JOB: Grocery store deli counter
RESIDENCE: Providence
AGE: 25

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