Mike Centola came from a family “littered with autoimmune and autoinflammatory diseases.” As a child, he watched them go to doctors who just didn’t have the tools to treat those problems. And later in life, Mike himself developed irritable bowel syndrome and colitis.
All of that almost certainly explains why Mike ended up becoming a doctor and devoting his life to finding better solutions to those kinds of diseases. By the 1990s, he’d gone to work for the National Institutes of Health where his team cloned the first rheumatologic disease gene and essentially founded the entire field of autoinflammatory diseases. Years later, Mike started collaborating with other doctors with expertise in inflammatory diseases – Dr. Phillip Alex and Dr. Chris Sutton, among others. These doctors founded Haus Bioceuticals with a mission to use natural medicines to combat autoinflammatory diseases.
One of the compounds they developed was a combination of botanical extracts. What was interesting about this compound was that most treatments attack a single issue with a single medical ingredient. Theoretically, that would isolate the problem and treat it without the risk of unwanted side effects. But this new compound was complex and could potentially treat multiple conditions. So, Mike and team decided to test it under the most difficult and rigorous conditions they could imagine. They tested it to see if it could help treat sepsis. And after the first round of test, their compound had a success rate of 60-70%—results that had never been seen before.
That’s when we knew we were working on a potentially groundbreaking inflammatory treatment.
Mike and his team immediately started a program to understand the potential of this compound to treat all kinds of inflammatory issues: autoimmune disorders, infectious disorders, metabolic disorders, even things like arthritis, gangrene, and inflammatory bowel disease.
At one point they tried it with atopic dermatitis, or eczema, in a small-scale study. They saw promising results—enough to make them want to put it to a more rigorous test. Not that they needed to. It was just a compound of herbal extracts, and the FDA doesn’t regulate herbal extracts like it does medicine. They could have gone straight to market with the product at that point.
But, being the serious medical scientists that they are, they didn’t. They placed the compound in a large scale, double-blind study, just like any pharmaceutical company would with a regulated drug. The results were just as impressive. Other tests on psoriasis also yielded incredible results. And that’s when they started to see their way to the first commercial application of the compound that would eventually become known as MetaDerm.
The team at Haus knew they had a potential winner on their hands… if they could figure out how to scale their tiny little business into the thriving one they knew it could be.
Enter P&G Ventures.
As soon as Procter & Gamble scientists started looking into MetaDerm, they were intrigued. “The Haus group had an impressive amount of clinical data and science behind it…We could tell they were trained scientists, and that was attractive. Plus, we’d walked away from natural products like this before because none of them ever seemed to work. But according to this research, this stuff really did.” Not only did the compound work, but the research showed it worked better than the best products on the market at the time, including prescription drugs.
Within six months, Haus and P&G Ventures had struck up a deal to share information and explore the possibilities of working together. In addition to investigating the product formula and existing research, one of the first things the team did was work with P&G’s Amazon sales team to put together an even more effective marketing plan.
P&G Ventures also brought in the company’s quality assurance experts to evaluate product safety—and those experts uncovered a massive, potential setback. The key ingredients in MetaDerm are natural, botanical extracts, which means they come from plants and trees. Generally, that makes them incredibly safe as far as ingredients go. But the downside is that if not treated carefully, ingredients can come in with pesticides, fertilizers, fungus, or yeast problems. Microbial contamination might show up weeks or months after the product was produced and sitting on a shelf. Mike recalls, “The ingredients we were buying didn’t have that kind of rigor behind it. We didn’t have the background to know that…to guide a brand for decades. It was a craft we just didn’t have.”
After a couple of months, the P&G experts figured out a way to change the formula to make it less hospitable to microbes that could get introduced, and changed the entire manufacturing process to avoid contamination in the first place. Problem solved.
The team turned the marketing machine back on and saw an immediate spike in sales. In tandem, they discovered they’d need to supplement the product with two things to keep people using the product long enough for their skin to heal: a personal coach of sorts, and a guaranteed supply of the product showing up at their door. They started directly to consumers online, building out automated communications to scale coaching, and using social media groups for encouragement and community.
Everything was working wonderfully. So, when it was time to replace that exploratory contract with something more permanent, the team at Haus was eager to work with P&G Ventures, and P&G Ventures was excited about working with Haus—all the way up to and including the CEO of P&G, A.G. Lafley.
Lafley was so encouraged, he wanted P&G to buy MetaDerm outright from Haus which was how P&G had more traditionally worked. But Mike was hesitant. He’d had one of his previous inventions purchased outright before. Afterwards, the business was more successful than either party had assumed. Looking back, he wondered if he’d gotten the short end of the deal.
So the P&G Ventures team did two things to help Mike feel better about an arrangement. First, they offered changes to the contract that Mike felt protected him better and ensured he wouldn’t end up with the short end of the deal again. Secondly, they invited Mike to sit down with their financial analysts and literally went through the assumptions in their spreadsheets, one by one, until he was comfortable with everything behind the valuation and offer.
They agreed to a new deal by the end of the afternoon.
P&G Ventures really changed everything. They brought in all their experts: supply chain, manufacturing, marketing, intellectual property, regulatory, consumer research. They brought in the best of the best they had in-house. And if they didn’t have the best of the best, they found them as consultants and brought them in that way. They were amazing partners to work with.