LEARNING CURVE: R & D LABORATORIES : Filling a Niche : Entrepreneur Caters to Kidney Patients
Rhoda Makoff founded R&D; Laboratories in 1989 after developing a vitamin therapy for kidney patients--a market that had been passed over by much larger pharmaceutical firms. Since then she has learned that almost no market niche is too small for a growing company. Makoff was interviewed by Karen Kaplan.
We make replacement vitamins and minerals for kidney patients who suffer from acute renal failure. Kidney patients need a great deal more calcium carbonate, for instance, than the regular population. They also have to replenish other vitamins and minerals that they lose while they’re on dialysis, having their blood supply cleaned by a machine since their kidneys can’t do it for them.
I got my Ph.D. in biochemistry and specialized in diabetes and renal disease. My husband is a practicing kidney specialist. When I was thinking about starting a company, my husband suggested that there ought to be a specialized vitamin replacement therapy for kidney patients.
I did some research and it turned out there was a lot of frustration that none of the pharmaceutical companies had come out with anything like that. In fact, the market is so small that to this day I don’t know of any large pharmaceutical company that is making vitamin supplements for kidney patients.
The number of kidney patients in the United States is now about 200,000 to 225,000, which is so small it’s considered an “orphan population.” The government has special incentives to encourage companies to develop therapies for orphan populations because otherwise the market is so tiny that big companies wouldn’t want to invest time and money on it. It just falls below their radar.
I worked on creating a good vitamin recipe in my spare time while I was an assistant professor at UCLA and later when I was doing contract research. In 1989, I decided I really had the basis for my own company, so I raised $300,000 . . . and started building a management team.
We started out by formulating our own vitamins. Now we are starting to license therapeutic products, like essential amino acids, that can be used by patients with acute and chronic renal failure. They require longer, more expensive clinical trials than you need for vitamin supplements, but now that we are a bigger company we can afford to pursue these kinds of things. Even though they are small products for the companies that developed them, they could be big products for us.
I think that any market is viable if you’ve got a good idea. You don’t have to have a huge potential market out there for it to be worth it. Even a couple hundred thousand people is big enough, if you get enough of the market. You don’t have to set out to be a $3-million or $4-million company.
On the potential of small markets . . .
“You don’t have to have a huge potential market out there for it to be worth it. Even a couple hundred thousand people is big enough. . . . “
On opportunities left to small businesses . . .
“Even though they are small products for the companies that developed them, they could be big products for us.”
On how she found her niche . . .
“My husband suggested that there ought to be a specialized vitamin therapy for kidney patients. There was a lot of frustration that none of the pharmaceutical companies had come out with anything like that.”
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AT A GLANCE
Company: R&D; Laboratories
Owner: Rhoda Makoff
Nature of business: Designs and markets vitamins and pharmaceuticals for kidney patients
Location: Marina del Rey
Number of Employees: 18
Annual Sales: $6 million
