Episode #28 – John Lai

Welcome to The People of Animal Health Podcast. The host of our podcast is Stacy Pursell. Stacy is the leading executive recruiter for the animal health industry and the veterinary profession. She’s the founder of Therio Partners and the VET Recruiter. Stacy has placed more professionals in key positions within the animal health industry and the veterinary profession than any Executive Search professional. Along the way, Stacy has built relationships with some outstanding people who are doing incredible things to make a difference.

The people of Animal Health podcast features industry leaders and trailblazers who have made a significant impact, or are making an impact, in the animal industry or the veterinary profession. Stacy chats with them to learn more about their lives, their careers, and the unique and interesting things that they have done to contribute to the animal health industry or veterinary profession. She’s here to share their stories with you. Now here’s the host of our podcast, Stacy Pursell.

Hello everyone, and welcome to The People of Animal Health podcast. On today’s show, we are talking with John Lai. He’s an entrepreneur who has had a fascinating career in the animal health industry. He’s the CEO of PetVivo. Welcome onto The People of Animal Health Podcast. And how are you today, John?

Thank you, Stacy. I’m doing really well.

Well, I’m so glad to hear that and so glad to have you here on our show today, John. I know that you have had tremendous success throughout your career, but I’d love to start off at the bottom in the very beginning of your career, what was your life like growing up and where did you grow up?

Well, I grew up in Minneapolis, so hung around the lakes all my life. So big hobby in golf and lake and boating. When I graduated from the University of Minnesota, I started my career out on Wall Street in different capacities, and as a child, believe it or not, I knew what I wanted to do with my career, was to be on the Wall Street side. And I was on there for many years before jumping over to the private company side, where I looked at companies where they had a unique technology niche that somebody with more money couldn’t over run. So I was looked at something that in the future would become the standard of the industry.

Well, tell us about that. I’d love to hear more about the story of the very beginning of your career. How did you get started?

So as a 16-year-old, I had the drive to reach out to all the major brokerage firms and investment banking firms saying, “Hey, I eventually would like to get a career in there.” And they thought it was kind of interesting that a 16-year-old kid would be that focused on that career. So it opened a lot of doors for me because I showed the initiative. And started out in New York and then later was in Chicago on LaSalle Street, and then later out back up to Minneapolis.

But throughout that whole phase, I always had a strong interest in companies that had a unique niche in technology that I felt the industry would eventually go that route, and that’s where I focused the balance of my career, is I would put money into these early companies along with a group of friends. They were clients back in the day, but now we become friends because we invest together in situations. And then later on as you get experience and maturity, you realize, okay, a lot of these situations you have to take an active role like going on the board of directors or becoming the executive of the company. And that’s how I got into PetVivo.

Well, tell us more about that. Tell me more about your transition into the animal health industry going from Wall Street and business, and how did you get into the animal health industry?

So I was contacted by the second-largest law firm in the Midwest, basically, and their patent council called me up and said, “Hey, I got this interesting company. We have a lot of patents around it. The science was developed at the Mayo Clinic in Rochester, Minnesota, and the first 8 million was funded by NIH in the human side of the market.” I looked at the data, I go, “Wow, this is very impressive data and clinicals, but I really don’t want to get involved in a company trying to launch human products because I’ll need 300 million in marketing and advertising just to get going.”

So finally convinced the CEO at the time. It took a while because I said, “The only way I would come in is you let me take it to the animal health space,” because with the clinicals, they had enough evidence to support a human medical device designation on these particles. So that gives you automatic clearance to be able to sell and market the product in the companion animal side.

So we decided to go that route or he decided to say, “Let’s go that route. You’re coming in as CEO,” and we identify our particles. We launched the first product called Spryng with OsteoCushion Technology, and what it is the particles mimic cartilage and tissue. It’s naturally derived. So we don’t have side effects or adverse events or anything like that. There’s always a small chance of adverse events, but the numbers are so low it’s non-significant.

And we found doing the injection… So we sell the product to veterinary doctors, they do an interarticular injection. So it’s a very powerful tool in the management of osteoarthritis and lameness and rehab for dogs, horses, and cats.

We started out in the equine industry because equine vets see the horse much more often than a small animal vet, and we’ve been getting great results where our vets have been injecting the horses and they’re finding out they don’t have to use a lot of the other pharmaceuticals, which is a goal of human medicine as well as veterinary medicine because pharmaceuticals have side effects, and generally pharmaceuticals are targeted at symptoms versus our product. At the root cause of osteoarthritis or joint issues is the wearing a way of cartilage.

So when we inject the matrix particles into the joint, it starts the form of scaffolding. So it mimics the cartilage that’s there. It’s like an extracellular matrix. The difference with our product is that it lasts. We’ve seen it in our human studies. We track the humans for a year. We say the product lasts approximately a year, but in real world applications, we’ve seen it last beyond a year and after the injection of the spryng particles, we have seen a dramatic reduction in the need of NSAIDs and other types of products like hyaluronic acid because the particles are doing what it’s supposed to, mimic cartridge and tissue.

So it’s wet and lubricious so when the dog’s running, the particles are actually moving and creating lubrication between the joints, and it’s also creating a mechanical function where it’s preventing the bone on bone contact. That’s the uniqueness of the product.

Then the product is considered a veterinary medical device. So if you have pet insurance, most likely it’s covered under that. And also we’re seeing success where I don’t see other products tackling and what I call is joint life extension. So if you have an older dog, like a lab that’s 10 years old and has hip dysplasia or a knee issue, you go in, you see the vet, the vet says the dog is really suffering from a pain, you really have two options. One is to spend a couple of hundred dollars and put the dog down, or you do a $7,000 or $8,000 surgery and then your dog has to go through a series of rehabs and so on.

With our product for about $800, we can focus the injection on the joint, and we have seen the joint life extend well beyond a year. So you don’t have to do the surgery, but you’re also improving the mobility and the reduction in pain of the animal, and that’s pretty much across the board.

So we feel we’re really expanding the total addressable market since there is no product in that space. So from the osteoarthritis side, the low end of the estimate of the market in the United States is 4.8 billion. The high end is 11 billion. So we feel, over time we’re going to start grabbing market share as the product gets better known, and that we have multiple studies coming out, not for the FDA, but for marketing purposes because we’re doing shoulder studies on the dogs. We inject the shoulders, we inject the hips. We’re showing how it works better than the current therapy. And many of those studies, six of them I believe, will be out before year-end this year. So we’ve got some exciting times and catalyst is coming up.

Yeah, that is fascinating, John. I’m curious, since you’ve been in the animal health industry, what has been the most surprising thing to you during your career so far in animal health?

Well, it hasn’t really been surprising because I think we’ve been pretty on top of the trends. Now, COVID obviously created a shift because we had a study at Colorado State University being done. They had to shut the campus down for nine months. So that really changed the timing of when that study is going to be done and dogs that were in it had to be released from the study. So that was something we never expected, but we did expect a pickup in pet adoption, which we saw, because prior to that, it was about 67% of household had a pet. Now we’re north of 70% that has pets. So it’s a big market share.

United States, there’s about 10 million horses, 83 million dogs and 65 million cats. So this is a really meaningful and impactful product we’re bringing the market to improve the quality of life.

So the other surprising thing that really caught my attention was dogs gained weight during COVID along with their people, because I thought people would be out exercising more, but no, they sat on home and watch the TV and the dog sat on the couch with them, and they got a lack of exercise. That adds to the development of osteoarthritis. When a dog’s overweight, it hurts the joints. So that market is growing at about 6.7% a year, which is very high growth when the rest of the pet industry is growing at about 5.4.

So we see tremendous opportunity and our product, eventually the veterinary doctors as part of the education process, will learn that it’s a very good prophylactic from having the joint disease progress.

So at first signs vet should be looking at possibly using our product instead of waiting until the affliction becomes very serious where it’s immobilized. Because right now, as a newer product, everybody uses it on their initial use after they tried everything else, and it’s not working anymore. So we’re getting the train wrecks, but we’re getting grade results, what we call train wrecks, and we had one of the doctors early pioneer said, “John, for the first six months, I only used the product on dogs that didn’t have any other option, and it was worth it. So I gradually went on to hip dysplasia. I gradually went on to elbows.” So there’s a time process and adoption, but once you get the adoption, you got a lifetime customer because the product’s working extremely well.

Wow, that’s so interesting. You already mentioned one thing, you talked about the growth of pets during COVID. How else have you seen the animal health industry change over the years that you’ve been involved?

So the other side that we have changed is the humanization of their pets as part of the family. Here’s a metrics for you to consider with your people. Back in 2012, the average dog owner would spend $1,700 before they would stop treatment for the dog. In 2020, it was $10,700. So that’s a dramatic bump in the dollar that they’re willing to spend, and a lot of that has demographic drivers behind it.

So if you look at less and less people are getting married, less and less people are having kids. So their pets become their kids, and they’re willing to spend whatever it takes to improve the quality of life of those animals. So we feel our timing of the product launch and the education series that we’re putting together will give us a great potential for market share.

And one of the indications, if you look at our team that we put together, we put together pretty much the best of the best within the industry.

Our salespeople all came with 20 some years of experience with the top players in the world, Merck Animal Health, Zoetis, Covetrus. They’re like the three top players. We pulled seven regional salespeople with 20 plus years experience that have great track records. The doctors were pulling Dr. Tom Yarbrough, he was the chief surgeon at Dubai Equine, which they handle the most expensive horses in the world, and he was the chief surgeon, and he handles the royal families’ horses. Dr. Maureen Dower, 20 some years at Zoetis. She’s with us. She was in multiple aspects, Dr. Joe Manning, Merck Animal Health, 40 years in the business. So the people we’re bringing as the best of the best.

And our latest director, Stanley Breithaupt, he was the executive VP in sales at MWI Animal Health, the largest distributor in the world, and they do just in the United States, they do $5 billion a year. When he retired from there, we were able to get him to come on our board of directors, and he’s also chairman of the Animal Health Corridor, which is the top 25 animal health and pharmaceutical biotech companies in the world.

Well, you probably remember one of the reasons I reached out to initially was I noticed your hiring. I reached out and congratulated you on some of the people that you were adding to your team. I said, “You’re hiring some impressive people.”

Yeah, yeah. Oh, actually, I forgot about Dr. Kaplan. He’s one of the young brilliant scientists in biomaterials. He worked under the godfather of biomaterials, Dr. Langer at MIT. So he was quite an unusual catch because he contacted us, well, same with Maureen Dower, and so they were getting outside people contacting us. I just hired a person from Merck Animal Health social media because he married a woman from Minneapolis. He was here for the holidays. He is based in Michigan. We hired him, and he starts on Monday, but he’s a specialist in social media for animal health industry.

So it is the right time to bring people like that in as the product is being used by a lot of doctors, and we’re getting a lot of great stories on social media, we need to consolidate these stories and make them more available to the consumers because when the consumers see these great stories, they start talking to the vets and getting the vets interested in looking at our product. And we also have a nonprofit called petvivocares.org where we donate syringes to other nonprofits. We donated to military dogs, police dogs, military horses, just rescues in general. And we’re getting great stories coming out of there.

I love to hear the stories of how you’re giving back to the community. That’s really great to see that. I’m curious, John, what does your crystal ball say about the future of the animal health industry?

So we’re going to see continued growth. There’s several new products that’s hitting the market. They’re currently very expensive. They do work, but once again, it’s more of a short term. It’s six months to a year, and it’s pretty, like I said, a couple of thousand dollars versus ours. So we feel we’ll compete very well going forward in the marketplace, and that we have the unique product that’s addressing the root cause of the problem of osteoarthritis.

Well, you’ve talked about some of the things, but I’d love for you to share with our listeners about some of the other projects that you’re up to right now.

Sure. So we got the Feline Study that will be published sometime later this year. There will be a presentation on it at one of the conferences in late September, and we’re pretty confident that’s going to be a very good study because it’s independent study so we don’t see the data, but the clinician told us the top journal in the feline space has already agreed to publish it. I don’t think they’re going to publish a bad study. So I feel good from that standpoint generally that are clues.

And then as we roll forward next year, we’ll be going into looking at treating urinary incontinence with our particles as part of our NIH funding that we did on the human side. We did pig studies on urinary incontinence, where after we injected the four quadrants of the sphincter muscle, so we basically stopped stress urinary incontinence. So that would be a pretty big market for the dog space.

And then we announced recently, we’ve gotten CRO reports, which they’re independent bodies that evaluate your product pipeline and then tell you what you need to do to get through FDA, and also the path to take to get insurance reimbursement on the human side of our human products, because most of the work prior was done on the human side that the initial funding before I joined. So now it’s a time I felt we’re in a good position to start looking at monetizing some of these human product pipelines to help the human side as more data comes in on the animal side, because we have, like I said, six studies by the end of the year that’ll be completed, and that will help solidify the human side as we go and testing on the human side.

Wow. Well, I’d like to pivot the conversation now. Part of the podcast is our listeners are very interested in learning about trailblazer, successful people, entrepreneurs, people that are making a difference and doing really interesting things in the animal health industry. And our listeners want to know what are things that people do to become successful, and what are some of the habits that have caused them to become successful? So John, I’m curious about you personally. What are some of your daily habits that you believe have allowed you to achieve success throughout your career?

I think I’m one of those people that just works 24/7, even though I’m not, I still go out and enjoy myself. I go out on the lake and relax on the boat or meet with friends for live music, but everybody thinks I work 24/7. Then I’m always thinking about the industry where it’s going. So I’m trying to keep ahead of the industry and look for potential issues that could come up and how we’re serving a future need. I think that’s the biggest asset you can have, is identifying something that’s unique that your company has and then positioning it so when the market goes that route, you’re the leader in that space. And that’s what I’ve always focused on throughout my whole career, is looking for companies. Sometimes I’m too early.

One of the early companies I invested money in and wasn’t in management, was a pay at the pump credit card, but this was 1987, so that meant every gas station have to have two dedicated phone lines per pump. It became cost prohibitive. The idea was very good. So the company went bankrupt and Visa bought the patents, and as you know, everybody’s paying with a credit card at the pump these days because the cost, the technology caught up.

And in other times, I’ve been pretty on time. I had one wireless radio modem company that I focused on. I told everybody it was five years out and seven months later it got bought out for 10 times what we put in because somebody else saw that the technology was going to be a little faster. So I’ve been involved with some really cool technologies over the years, and that’s what my principal focus was.

I always liked the niche market, and that’s not for everyone. A lot of people do just fine running a business that is a me too-company. So I’ve never invested in a restaurant, so I missed the Starbucks and McDonald’s because I said, “Who am I to guess which one of these brands are going to catch on and which fat’s going to catch on? I have no idea. Or even movies. I’m terrible at movies.

Well, is there a mentor who has made the biggest impact on your career, and if so, would you share that story?

No, not really. I was just always self-driven and focused. I don’t think there’s too many kids around 15 and 16 knew exactly what they wanted to do and focused the whole time on it and getting the connections and relationships with the people in the industry.

Well, what has been the biggest challenge or the biggest adversity that you’ve had to work through during your career?

Well, I think a lot of it is the technology. One company was downloading software on the internet in 1997. There was only 3% of the people using DSL, so they told me I was nuts to be into that company. And then Gartner Group a year later comes out and says, “7% adoption. We’re going to see rapid adoption.” So it became possible to download software. That company became Norton Antivirus, but if you were on dial-up back then, you could never download the software. It would be a steady tone for 20 minutes, and then they boot you off and you got to start over. So the success rate was like zero, and I was early, but it paid off.

What advice would you give the younger version of yourself?

I think the advice, if I could go back and give myself, is to be much more patient on stuff and just walk through the process slowly. Instead of charging so fast. I tend to have a tendency of just charging. But now that I’ve matured, I actually think through the whole process before charging, and that was in my twenties and thirties.

I can relate to that. I’ve been accused of doing the very same thing. What message or principle do you wish you could teach everyone?

Ideally is you got to do something you love. Every company I get involved with, I’m fortunate because I do have a decent track record. I’m able to choose the companies I want to go into and get involved. To me, it’s not work. It is a lot of fun. And when you’re seeing the success and you’re seeing the events happening, it just keeps driving you. I don’t think I’ll ever retire, to be honest with you, but I really should.

I feel the same way. Retirement I don’t think is in my future. I always say that I’ll do this until they find me in my chair. So some of our guests on our show have talked about a key book that really helped them approach their mindset. Do you have a key book in your life that’s impacted you the most?

No, I do not. In college I read every book on law and money and banking and economics, but those are weird books for people to really get deep into. But I was deep into understanding the different relationships between the money markets and interest rates, fed funds and so on. So I still have a lot of fun watching the Fed, what they’re doing and how Wall Street’s guessing this and that.

Yeah, it’s very fascinating right now. I agree, to watch all of that. Well, John, you’ve got the mic. What is one thing that you want to share with our listeners of The People of Animal Health podcast before you drop the mic today?

So I just hope people stick to our website, follow the results and the events that are happening at PetVivo and that they share what we talked about Spryng with OsteoCushion Technology because I think we can reduce the cost of animal care and help a lot of animals get much better outcomes than currently they are.

Well, John, thank you for the work that you’re doing in the animal health industry to make animals’ lives better and humans’ lives better. And we’re so grateful that you took the time to be on our show today. I know you’re a very busy person, so thank you for being here today, John.

Thank you, Stacy. Bye-bye.