Pharma’s Next Frontier?

With a focus on “clean” medicine, Atlanta-based startup Genexa looks to disrupt the over-the-counter drug market
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In the past decade, so-called “clean” products—from mascara to diapers to household disinfectants—have crowded their way onto store shelves. Although this buzzword doesn’t have an official definition, consumers are increasingly seeking out products that they perceive as healthier or more pure. Genexa, a “clean” medicine startup that bills its products as better-for-you alternatives to standard over-the-counter drugs, hopes to capitalize on this new wellness trend— while disrupting an OTC pharmaceuticals industry  worth $175 billion worldwide. 

The company was founded in 2015 by David Johnson and Max Spielberg, who were at the time both new parents distressed about exposing their kids to chemicals and artificial ingredients. Spielberg, who had grown up battling allergies, was particularly wary of potential allergens. They began studying the back labels of children’s medicines, and they weren’t happy about what they saw.

“There were a lot of unpronounceable words and crazy colors inside the bottles,” says Johnson. “We asked ourselves, ‘Why?’”

Despite having no experience in the pharma industry, the pair figured they could do better. They began meeting with drug manufacturers, looking for a shot at developing OTC alternatives with fewer allergens and synthetic ingredients. Breaking into the highly regulated and consolidated industry of pharmaceuticals wasn’t easy, but in 2017, they launched their first retail offerings. 

Today, the company sells 14 products meant to relieve common ailments ranging from allergies to nasal congestion to motion sickness. Some of Genexa’s products contain the same active ingredients—the components responsible for therapeutic benefits, like calming a cough or bringing down a fever—as standard big pharma offerings, though most are considered homeopathic remedies. (While homeopathic products are FDA-regulated, the agency does not assess whether they’re effective or not.) 

The company’s main focus is on the inactive ingredients, additional components used to preserve medicines, make them shelf-stable or easier to swallow, improve the flavor, or help your body absorb the active ingredients. While these filler ingredients are usually considered harmless, Johnson and Spielberg point to a 2019 study from researchers at the Massachusetts Institute of Technology that found most medications contain some ingredients that could cause allergies or other adverse reactions in patients. This simply isn’t necessary, argues Spielberg.

“There’s no reason that there should be an excess of the other stuff,” he says. “A lot of the feedback we get is ‘I finally have a product that my kid won’t have an allergic reaction to.’” Genexa says its “clean” inactive ingredients are less likely to cause these reactions; their products are free of more than 30 artificial ingredients and common allergens, including propylene glycol, milk, soybean oil, and high fructose corn syrup. And Genexa’s product packaging touts plenty of other trendy terms: their remedies are non-GMO, vegan, gluten-free, and certified organic. 

“We’ve seen a change in the food industry, and that’s what we’re trying to push here,” adds Johnson. “It’s not just about changing the flavor of your product from Orange Crush to elderberry.”

Genexa developed its products with input from a medical advisory board, and the company is focused on winning over both physicians and consumers—particularly millennial moms. “I think there is a general movement towards lowering exposure to chemicals and unnecessary dyes and additives, and therefore everyone is evaluating all of their products,” says Taz Bhatia, MD, an Atlanta-based member of the company’s medical advisory board who is focused on holistic medicine. 

There are signs that their strategy is working. Earlier this year, Genexa conducted its own survey of U.S. pediatricians, and announced that based on a review of the ingredients in each product, more than two-thirds of the participants said they preferred Genexa’s children’s pain and fever remedy over Children’s Tylenol.

In 2019, Genexa brought on chairman Brian Perkins, an industry heavyweight who spent more than 30 years at Johnson & Johnson, where he was worldwide chairman of consumer pharmaceuticals. Since then, the company has grown rapidly. Last year, their products were available in 22,000 retail outlets—this year, it’s 45,000 stores, including big players like Walmart, Target, CVS, and Walgreens. 

Their aggressive growth strategy is one reason Johnson and Spielberg recently chose to move most of Genexa’s operation from California to Atlanta. At the end of 2021, they had 50 employees at their new headquarters on the Westside. That number could soon expand exponentially. Genexa currently uses seven U.S.-based manufacturing facilities to produce their drugs, but Johnson says they hope to consolidate the process by building a partnership with a locally based manufacturer. 

“Georgia is really about incentivizing companies to hire and helping them grow and build out diversity,” says Johnson. “That was a big selling point. And unlike in California, which is a heavy creative market, you can find great candidates here for every role, including operations and manufacturing.” 

In July, Genexa announced it had raised an astonishing $60 million in Series A funding, the largest amount ever raised by an OTC pharmaceutical company. In addition to prominent investors like Monogram Capital and Unilever Ventures, the company also attracted the support of wellness-focused celebrities including Gwyneth Paltrow, Chris Pratt, Regina Hall, and native Atlantan Donald Glover. Four months later, Deloitte named Genexa to their Technology Fast 500, a list of the most innovative, fastest-growing technology companies in North America. 

Above all, Johnson and Spielberg say that Genexa’s business approach is about driving change in the industry for the benefit of the consumer. “We see ourselves as part of a movement that’s demanding change throughout every industry, including pharma,” says Spielberg. Their people-first ethos is also why Genexa pursued certification as a B Corporation, which places an emphasis on giving back to employees, the local community, and the environment.

“I believe that this is the way all OTC drugs will be formulated when you look out 10 years,” says Perkins. “It’s not easy and it won’t happen overnight. But we think we can really reshape the OTC medicine aisle.”

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