Chaska-based Lifecore Biomedical was ready to hit one out of the park. The company had spent more than a decade pouring money into a product to prevent post-surgical adhesions (painful internal scarring). In 2002, the FDA approved it, and Lifecore’s marketing and distribution partner, Ethicon, Inc. (a Johnson & Johnson company), began selling it in the U.S. A year later, the game was over. Ethicon voluntarily withdrew the product to study reported adverse effects. It was the right thing to do—but the timing was all wrong for Lifecore.
“That product was going to be our home run,” says Dennis Allingham, who became Lifecore’s CEO in 2004. “So now what?”
Lifecore’s board asked him that same question. His game plan? Shelve the adhesion product and focus on developing the two other divisions—dental implants and hyaluronic acid (HA) products—for which he was responsible at the time. “Simply put, my plan was to grow the business, and make money,” he says. The two divisions had an ideal demographic in the aging Baby Boomer population.
“We have a generation of people who have wealth like no other generation before. They are living longer, and they want to look better.”
Dental implants are today preferred over dentures; HA, a complex sugar, natural to the body is a lubricant used in cataract surgeries (to protect the delicate inner eye), to ease the pain of osteoarthritis in joints and, most recently, to smooth out wrinkles.
The new focus took Lifecore from $47 million in revenue in 2004 to nearly $70 million today, with share prices rising from south of $5 to $18.
“For anything you do, you have to have passion,” he says. “But you can’t let passion cloud your objectivity when you’re running a publicly traded company.”
Upon his rise to CEO, Allingham first sat down and asked his dental implant development team for a flagship product that will help Lifecore to compete with the industry’s heavy-hitters. “Lifecore had been known in the dental implant industry as the cloner. We took other people’s products, knocked them off, and sold them cheaper,” says Allingham. “I didn’t think that was the right way to go.”
The answer was “Prima,” a simplified implant system launched in December 2005. Allingham did two things to accommodate the product’s launch. First, he readied his sales organization by boosting his domestic sales force by a third and adding six distributors in another 14 countries, including a new French subsidiary. Currently, Lifecore products are sold in 50 countries worldwide.
Second, with Prima’s introduction to the market, Allingham and his team re-branded Lifecore’s dental implant division, changing its name from the Oral Restorative Division to Lifecore Dental. The tagline: “With purposeful innovation.”
“The global re-branding, the expanded sales force, the new product line—all of these things are designed to position Lifecore as a player long-term,” says Allingham.
On the HA side of the business, too, Lifecore is looking for long-term prosperity. In April 2007, Lifecore entered into an exclusive license agreement with Cleveland Clinic, whereby it can use a patented cross-linking technology that allows hyaluronan-based products to last longer. Says Allingham: “This new technology platform will drive our future product development … allowing us to make a plethora of different products for different applications.”
Still, Lifecore faces “formidable” competition on the dental implant side (the largest player is 15 times the size of Lifecore), and even though Lifecore competes with only six other suppliers of HA products, the supply is much greater than the demand. But Allingham believes it’s the firm’s stellar customer service that will propel it to success over the long run. “We really truly try to be responsive to our customers’ needs, and we empower our people,” he says.
“We’ve had a nice run the last few years,” he says. “But too often I get singled out. I always like to make sure that our people get the credit. I take responsibility when things don’t go well, but when things do go well—it’s because of our team.”
