CEO Interview: Medical Nutrition USA, Inc. - Frank A. Newman

• On 1:39 pm EST, Monday November 2, 2009

67 WALL STREET, New York - November 2, 2009 - The Wall Street Transcript has just published its Pharmaceuticals Report offering a timely review of the sector to serious investors and industry executives. This 76-page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Small-Cap Specialty Pharma - Patent Expiration - Pending Health Care Reform - Cultivating And Expanding R&D Pipelines - Chinese Drug Manufacturers - Brisk M&A Activity - Indian Pharma VS. U.S. Pharma - Competition From Generics - FDA Approval Process - Clinical Research Outsourcing Market - Stem Cell-Based Technology - Cancer Radiation Therapy - Expansion Into Asian Markets - Traditional Chinese Medicine VS. Western Medicine In Chinese Pharma

Companies include: Aeolus Pharmaceuticals (AOLS.OB); Nutra Pharma (NPHC.OB); Quick-Med Technologies (QMDT.OB); Abbott Labs (ABT); Alexza Pharmaceuticals (ALXA); AmexDrug Corporation (AXRX.OB); Aurobindo Pharma (AUROBINDOP.BO); BioClinica (BIOC); BioPharm Asia (BFAR.OB); Biocon (BIOCON.BO); Cephalon (CEPH); China Sky One Medical, Inc. (CSKI); Claris Lifesciences (CLARICH.BO); Cortex Pharmaceuticals (COR); Daiichi Sankyo (DSKYF.PK); Dr.Reddy's (RDY); Elan (Elan); Eli Lilly (LLY); Forest (FRX); GeoPharma (GORX); Glaxo (GSK); Glenmark (GLENMARK.BO); Johnson & Johnson (JNJ); Lupin (LUPINSL.BO); Mannatech (MTEX); Matrix Laboratories (ATRIXLAB.BO); Medical Nutrition (MDNU); Merck KGaA (MKGAY.PK); Mylan (MYL); NeoStem (NBS); Novartis (NVS); Pfizer (PFE); Piramal Healthcare (PIRAMALHE.BO); Provectus Pharmaceuticals (PVCT.OB); Ranbaxy (RANBAXY.BO); Salix Pharmaceuticals (SLXP); Shire (SHPGY); Telik (TELK); Winston Pharmaceuticals (WPHM.OB).

In the following brief excerpt from the 76-page report, Frank A. Newman, CEO of Medical Nutrition USA, Inc., discusses the outlook for the sector and for investors.

FRANK A. NEWMAN has served as Chairman and Chief Executive Officer of Medical Nutrition USA, Inc., since 2003. He has been a Director of the company since November 2002. Previously, he was President, CEO and Chairman of Eckerd Corporation. From the Eckerd IPO in August 1993 to its sale to JC Penney in March 1997, shareholder value increased 500%. Prior to that, Mr. Newman was President and CEO of F&M Distributors, a drug store chain he took public in 1992. He also served as EVP, Retail-Household Merchandising (Household Finance).

TWST: Please tell us about Medical Nutrition USA, its concepts and its products.

Mr. Newman: We're a rapidly growing nutritional medicine company focused primarily on nursing homes, dialysis clinics and hospitals. We use proprietary technology to develop unique and highly effective concentrated liquid, shelf-stable nutrition medicines that are superior both from a cost standpoint and an efficacy standpoint to currently available alternatives.

TWST: What is this market's current growth potential and actual size?

Mr. Newman: The institutional nutritional supplement market is about $4 billion in the U.S. and growing at over 12% a year. That rate of growth is likely to increase as the over-65 age cohort in the U.S. increases from under 40 million today to 55 million by 2020, and over 70 million by 2030. We are in a position to benefit significantly from that demographic shift because of our particular focus on geriatric care in nursing homes, acute care facilities and dialysis clinics

TWST: When you look out at the market for your products, what's the competitive landscape like?

Mr. Newman: The principal competitors are Abbott Labs, Nestle/Novartis Medical Nutrition (MDNU) and Hormel HealthLabs. They are the large, successful companies that tend to have broad product lines and significant market share. Fortunately for us, their size may also inhibit their ability to innovate. You could say that all of our growth has come at their expense, which I think is testimony to the superiority of our products.

TWST: What's the hurdle or barrier you confront when describing your company, it's activities and strategies to the investment community? Are there any misperceptions you encounter on a regular basis?

Mr. Newman: I think it takes a while for people to get their arms around the nursing home market. It's one of the very few industries in which such a small percentage of the facilities are part of large chains. Only about 20% of the 17,000 nursing homes in the U.S. are operated by chains of 100 homes or more. The rest are operated by small chains or independents, each of which has to be sold individually. The challenge is just getting to each of them. Their individual dietitians and nurses need to be educated on the benefits of the product and change their internal procedures to accommodate new therapies, resulting in a relatively long sales cycle. By the same token, facilities tend to be very loyal users once they have been converted. I think those unique characteristics of the nursing home business make it difficult to grow exponentially. We have a healthy five-year compound annual growth rate in revenues of 25%, but there are some in the investment community who would like to see exponential rather than steady growth.

The Wall Street Transcript is a unique service for investors and industry researchers - providing fresh commentary and insight through verbatim interviews with CEOs and research analysts. This 76-page special issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online .

The Wall Street Transcript does not endorse the views of any interviewees nor does it make stock recommendations.

For Information on subscribing to The Wall Street Transcript, please call 800/246-7673

Buzz up!