This summer the New Orleans Business Alliance released its ProsperityNOLA plan, a comprehensive strategic plan for the economic development of New Orleans over the next five years. The plan focuses its strategy on the development of five distinct clusters that will lay the groundwork for the economic growth of the city: Advanced Manufacturing, Bioinnovation & Health Services, Transportation, Trade & Logistics, Creative Digital Media, and Sustainable Industries. Throughout this series of articles EMH Strategy will be profiling local companies within each of these sectors to show what has made, and what will make, New Orleans the place for companies in these spaces to do business.
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Image from Forbes.com
For the final post in our ProsperityNOLA cluster series, we catch up with our neighbors in the New Orleans Bioinnovation Center (NOBIC), Theodent. Theodent is a unique biotech company that has harnessed (and patented) the power of Rennou™, a powerful substance found in the cacao plant. Yes, it’s true, Theodent has made a toothpaste out of chocolate (although only Theodent Kids is chocolate flavored). The revolutionary toothpaste is more powerful than traditional fluoride-based toothpastes, as it actually works to build up tooth enamel over time. Theodent has proven to be one of the most exciting companies to come out of NOBIC in the incubator’s first two years; the company has won the internationally acclaimed Red Dot Design Award and has been featured in Forbes, Cosmopolitan, Time, Marie Claire, Men’s Health, and Inc., just to name a few. Attendees of the International Emmy Gala in 2012 were also lucky enough to find a tube of Theodent 300, Theodent’s highest-quality product, in their gift bags. The company has enjoyed retail success through Whole Foods Market, and also has many exciting international licensing opportunities on the horizon. EMH Associate Robert Bray sat down with President and CEO Arman Sadeghpour, PhD, to learn more about the company and its experience in New Orleans.
Q (Robert): Can you tell me a little bit about Theodent’s background, and why you are located in New Orleans?
A (Arman): Theodent was born out of what you might call a “meeting of the minds.” 6 years ago I was at Tulane where I was working with Tetsuo Nakamoto from LSU and Skip Simmons from UNO on my dissertation. I was studying the effects of chocolate extract, specifically Rennou, on human teeth. Once we discovered Rennou and the potential impact it could have on global dental health, we decided to build a company that would harness the power of Rennou in a revolutionary toothpaste. That was always the goal. So we had our start in New Orleans, but we also chose to stay here because of our dedication to the city. All of the founding team had stayed in New Orleans after Katrina. In the company’s beginning stages we had the opportunity to relocate in California, but we decided to stay here and build the company locally. As everybody knows, entrepreneurial buzz was, and is, really palpable in New Orleans right now, and biotech is obviously an industry that is on the city’s radar. We were able to take advantage of Louisiana’s angel investor tax credits and the incredible support from NOBIC. I can’t imagine a better home base for this company, and we look forward to continuing to build our company in Louisiana.
Q (Robert): Have you found that there are any downsides to operating your company in New Orleans?
A (Arman): Certainly. Theodent has tried to raise money here in New Orleans several times, but there is really not a lot of risk capital here. People understand more established industries, like restaurants and real estate, but the intellectual property market is not something people have really gotten their head around yet. For a lot of people, biotech is seen as too dense. Firms here don’t understand that we are doing something that can globally impact healthcare. People know Tabasco and Abita (as I can certainly appreciate as a local), but when it comes to the science that could affect global oral healthcare, that is an area where we as a city still have a lot of work to do. I think that it will take one big success story to open more eyes in the city. Up until now, the vision for biotech has been low. If New Orleans can produce a successful company, and investors realize that missed opportunity, I think the tide will change.
Q (Robert): Where are you right now in your progress? Any exciting opportunities immediately ahead of you?
A (Arman): I can’t go into too much detail right now, but we are currently pursuing some international opportunities. We have some exciting potential for licensing ahead of us—stay tuned to find out more.
Q (Robert): What do you think New Orleans needs to offer to attract future entrepreneurs to develop a biomedical industry here?
A (Arman): As Theodent was getting off the ground, the angel investor tax credit was a huge benefit for us. I think that will continue to be true for entrepreneurs in the state, but perhaps the credit could be made to be a little more aggressive. Perhaps the cap could be raised from 5 to 10 million. I think that could go a long way in helping more investors cross over the line to support young companies, and it could really increase the sources of risk capital here.
Q (Robert): Based on your experience with starting a company here, what is your honest opinion on the future of the biomedical industry here in New Orleans?
A (Arman): I think the potential for New Orleans can best be summed up by Peter Kellogg. Peter sits on our business advisory board, and he has also been Chief Financial Officer and Executive Vice President of Merck since 2007. When Peter came down to New Orleans to tour NOBIC for the first time, he mentioned that what he saw in New Orleans was incredibly similar to what happened in New Jersey several years ago at the beginning of its pharmaceutical boom. New Jersey, like New Orleans, built biotech incubators to take ideas that were developed from universities and commercialize them. Twenty years later, New Jersey was the center of a thriving pharmaceutical hub. I have that same vision for New Orleans. Why can’t we be the oral care epicenter of the world? If we stay here and demand that the technology is housed here, we could build the next revolutionary oral care company, and other companies coming out of NOBIC and New Orleans can be industry leaders as well.
Q (Robert): What advice would you give entrepreneurs in the bioinnovation space that are looking to build their company in New Orleans?
A (Arman): Don’t compromise on your valuation, take advantage of tax credits, and work hard play hard. New Orleans is good for that. Don’t underestimate how far-reaching your technology can go, and don’t underestimate the global potential of your business.
Theodent is a company that New Orleans should be excited about. Not only does Theodent have potential to make a global impact on oral healthcare, but it also remains loyal to the city where it was born. As Arman points out, success stories like Theodent can go a long way to building a more substantive and sophisticated risk capital market in New Orleans by attracting the attention of investors who previously might have shown little interest in the city’s biomedical industry. Theodent can’t seem to stay out of the news, so make sure to follow their progress as they grow both internationally and here at home.
As Arman was generous enough to provide EMH with a few samples of Theodent’s products, we can personally attest to the quality of the product—it is in fact possible to feel (and hear) the difference of Theodent’s toothpaste. Not only that, after you finish your first tube, you are left with something that you can set up practically anywhere in your house as a piece of art, and it’s sure to turn a few heads. Not too shabby for a tube of toothpaste.