The COVID-19 pandemic, like past crises, has created winners and losers in business. One of the biggest winners was Alex Lucio, co-founder and former CEO of 3B Medical Inc., a Winter Haven-based medical supplies company.
3B Medical specializes in oxygen and ventilation devices, as well as infection-fighting products, so the pandemic has been the perfect boost for growth.
“We were a $20 million company in 2018,” says Lucio. “We came out as a $100 million company two years later. We were a respiratory company in the middle of a respiratory pandemic. Our ventilators, we couldn’t keep them in stock. And then, at As patients were discharged from the hospital, they had to be discharged on oxygen, so this division took off.
Now 59, Lucio planned to retire following the sale of his business to React Health, a company created by a group of investors specifically to acquire 3B Medical. (The company was officially rebranded as React Health in May, although it remains based in Winter Haven).
But just like Michael Corleone in “The Godfather Part III”, Lucio was taken out.
“We sold, we pulled out and we gave all that money to our shareholders,” says Lucio. “I thought I was going to retire. But when you make a lot of money for people, they want to give it back to you so you can start all over again. So all of a sudden everyone is calling me, saying, ‘OK, what next?’ And I’m like, ‘Well, I’m sitting by the pool reading a novel.’ »
He adds, “I tried to retire for about three days, and it didn’t work out.”
Lucio continued to monitor activity and trends in the medical device industry and noticed a gap in the market for intravenous fluid bags, a critical product for hospitals around the world. With funding from the initial group of investors who backed 3B Medical, it launched Assure Infusions in January. The company’s $20 million, 60,000 square foot manufacturing facility is currently under construction in Bartow, Polk County, and is expected to employ 100 people when it opens next year.
A central challenge? The billion-dollar intravenous fluids market is dominated by a duopoly comprised of Baxter International Inc. and B. Braun Medical Inc. These companies, according to Lucio, collectively account for about 90% of industry sales. It is in this mature and consolidated market that Assure Infusions, as a newly created startup with no track record, will aim to make major strides.
Business strategy begins with the nature of the product itself. Intravenous fluids, says Lucio, “are an essential part of the healthcare infrastructure. Almost all hospitalized patients will have an IV bag. So when you don’t have IV bags, it puts the hospital in a difficult position.
Many hospitals were in such a position in 2018 when Hurricane Maria devastated Puerto Rico, where the lion’s share of IV bags are produced. Lucio says he has taken note of the fallout from this supply chain disruption, which has caused hospitals to restrict admissions.
“It’s a commodity that shouldn’t be missing, because it’s too essential,” says Lucio. “Every minute, the two manufacturers with the most market share are running at 100% capacity; these are 24/7/365 operations, so there is no extra capacity you can activate in case something goes wrong.
Assure Infusions will specialize in four IV fluids: sterile water, sodium chloride, dextrose and Ringer’s lactate solution, which is similar to saline and can be used to treat a range of conditions, including dehydration and low blood pressure.
“These are the building blocks of healthcare,” Lucio says, adding that he’s not worried about being overtaken by big space competitors; in fact, he thinks the healthcare industry, due to the Hurricane Maria fiasco and the pandemic, is more receptive than ever to new providers.
“Everyone realizes now that there is a risk [buying from] a single source,” says Lucio. “Everyone we’ve spoken to – and we’ve spoken to some major buyers in the space – they’ve all said they’ll put us on their formulary right away, which means your drug is approved for purchase at a certain price, and it’s on a list that buyers can choose from.It’s a big step to registering for the form in a large hospital system.
He adds, “They basically say, ‘The doors are open — your product will arrive. I can’t tell you how much we can use, but you can come in. That’s at least half the battle.