The Power of the Patch: Serguei Melnik Shares How Nutriband Is Disrupting The Drug Delivery Business $NTRB

Serguei Melnik, President of Nutriband, details the company's journey and its groundbreaking transdermal patch technology, particularly the Avers system designed to prevent the abuse of potent painkillers like fentanyl. He explains the significant market potential and regulatory interest in their solutions. Melnik also provides candid insights into the challenges of market manipulation faced by public biotech companies and shares timeless advice on risk management, leadership, and balancing professional ambition with personal well-being, emphasizing the value of time, trust, and happiness.

Guest - Serguei Melnik, Founder & President Nutriband

Ticker: NTRB

Bio:

Mr. Melnik has been involved in general business consulting for companies in the U.S. financial markets and setting up legal and financial framework for operations of foreign companies in the U.S.

Mr. Melnik advised UNR Holdings, Inc. with regard to the initiation of the trading of its stock in the over-the-counter markets in the U.S., and has provided general advice with respect to the U.S. financial markets for companies located in the U.S. and abroad. From February 2003 to May 2005 he was the Chief Operations Officer and a Board member of Asconi Corporation, Winter Park, Florida, with regard to restructuring the company and listing it on the American Stock Exchange.

Mr. Melnik from June 1995 to December 1996 was a lawyer in the Department of Foreign Affairs, JSC Bank “Inteprinzbanca,”, Chisinau, Moldova, and prior thereto practiced law in Moldova in various positions. Mr. Melnik is fluent in Russian, Romanian, English and Spanish.

Full bio here: https://www.nutriband.com/team-1/serguei-melnik 

Transcript

⁠¶ The Origin Story of Nutriband

00:02

And welcome everyone to another Smart Money Circle episode. With me today is Sergey Melnick, who's the President and Chairman at Neutraband. I'm very interested to hear Sergey everything. Your story, I think, is phenomenal and everything you have going on at Neutraband. So welcome to the Smart Money Circle. Thank you. Thank you for having me here. So, Sergey, it was to begin. Can you please tell us your story and how you got to where you are today?

00:25

The story starts Thanksgiving 2015 when I met my my future business partner, Gareth Sheridan, who happens to be in Japan as of now. He was nominated for the Entrepreneur of the year in Ireland and by Ernst and Young and he was flown there the day before yesterday with the whole team of nominees. He also wrote a book and I was in Dublin just last week where he promoted his book and the it's called No from No to NASDAQ. And that's, that, that's the whole journey that we, we had

01:02

for the last 10 years almost. And so he started something like more or less of his college project, an idea of, of just making, you know, vitamin assimilation a bit easier through, through patches. And that grew up into a major idea. When we actually started working at the public company in the US, we went public by ourselves through a form 10, literally did everything ourselves, even legal work at the beginning with very modest funds.

01:36

And in 2018 we have acquired a company that had extremely something promising. I don't think we even understood the time for promising it was going to be. But it also has an idea, not even the patent yet. It was a technology that could go on a pain killing patch and you'll make it almost impossible for abuse or misuse. That idea was something that our investors and and the bankers got attached to. And since then we have been patented in 45 countries and we partnered with Cadeva, you know

02:15

former three M company. And for the last four years since the IPO in 2021, we have been working on actually getting the product to successfully place our technology on the fentanyl patch. So when you're going to see the next milestone that pretty much is going to be when we completed the feasibility and we'll have the product and we're ready to file the FDA submission. So that's in a national the story. Meantime, we we actually have a production company in in North Carolina.

02:46

So we do manufacturing, we actually revenue generating company, unlike other biotechs in our space. We manufacture for such companies as Reebok, A skatey tape and the and we have our own product too. It's called AI active intelligence tape that we sell. Our mosquito patches were just approved to be sold in Costa Rica. We, me and my friends were the Guinea pigs about a month ago in Costa Rica.

03:17

We climbed the two mountains, the tallest mountains, Sierra, Cherry Point Sierra and we use the the tapes on us and we did not have one mosquito bite in four days that were in the jungle. So we are very confident that that's going to be actually a a good seller and revenue generating, you know batch for for the company. So that's international about the company. We're extremely exciting that for the next 12 months it's coming up with full of milestones.

03:46

Those 12 months have to be also the ones we're going to have, not just the Ind meeting or should have the completion of the health study and the and the FDA submission. So we and our investors would be very, very happy.

⁠¶ Disrupting Drug Delivery with Patches

04:00

I love that. So just to summarize for the audience, what Nutribrand does is that you make skin patches almost like a nicotine patch, but you do it for other thing applications like the anti repelling the mosquitoes or enter any other type of issue there could be. Is that more or less what you do? Like the transdermal work where it's on top of the skin? Correct. Transdermal work is our, yeah, yeah, that's our main, main products.

04:22

And from sports tapes, I mean we'll have over the counter products and of course we'll have something that has to go through the FDA and that's the adverse technology that we're working with skin Dev on the fentanyl patch, pain killing patch. I love that. So there's patches and then there's smart patches like phones and and smartphones. Can you speak a little bit about the smart patches? The smart patches?

04:44

You mean like the? Like what you do where you take a patch and you're able to apply it for other things like painkillers or for mosquito repellents, correct? So how do? You who have done extensive studies and there is a rate of studies that you know is going to come up soon on the accidents that happen with the with painkilling patches, Dental is the 100% more potent 100 times important than heroin. So it's, it's all the residual left on the patches after they discordered.

05:13

I mean, there are some studies that show them going anywhere from 100 to $200 on the black market for for the addicts they want to buy. There are accidents. I mean, the children have actually died by picking up accidentally from the trash. So there are, there are, you know, hundreds of nine on one calls. I mean that all the things are going to be, are going to be actually appearing in our studies.

05:33

And so the technology that we have will make it will make the child or anybody else will try to use them and spit it right out. It's, it's, it's, it's based just on the make it extremely unpleasant to because most, most of the abuse is extremely unpleasant to have it inside your mouth. I mean, that's, it's a combination of Bitrex and the most bitter substance in the world and some other ingredients that once one day it just burns your tongue to the point that it, you just can enjoy it.

06:09

And so that's, that's a concept of the, of the patch. And we have in, in the studies showed and there were some analytical reports that we did before you've been engaged in the, in the feasibility study with Cadeva, It was a day a day request. We have done analytical studies with Advanced Health and the they expect actually to have insurance companies to pay premium for our product because

06:38

of the space. And also they expect the sales to be anywhere from 80 to 250 million on the within within the first years after the product comes on the market. And that is just based on the market that was of the time in 2020, I mean the market already significantly increased. I mean our like latest numbers have shown. And also that is based on the just the percentage of the

07:04

market, I mean 15 to 20%. However, also there was an asterisk in the analytical study saying that there is a chance that FDA may mandate it for all the painkilling patches on the market if we're successful. And in that case, I mean the from, from, from those years revenues I mean would have gone to 800 million from from 200 million. So that's that's significant also point to to make also a significant point to make if here that is just it's a

07:31

platform technology. It's not just from FanDuel patch. We also have done the study of glucomorphine patch and that also comes very significant numbers from 70 to 150 million also based on the same numbers that were in the same metrics that were used for the fentanyl estimates. And we expect that once it's successfully applied for one, I mean that's going to be the platform to apply for other pain killing patches and and patches that could present a risk to, you know, health or addiction for poor people. Love that.

⁠¶ Navigating Market Manipulation Risks

08:08

So let's talk about risk management. How do you handle risk and what are some mistakes you see people make with respect to risk management? In the risk management you mean do do you request just for the patches themselves or actually running the public company? So I know you had exactly, so I know you have a lot of background from legal work to business side to running the public company. The next part of the show for

08:31

the audience is timeless advice. So just in general, anywhere you want to go, the concept of risk in the biotech space, obviously it's very important. You have to make sure it's everything is by the book and FDA regulated so on and so forth. Business standpoint from no to NASDAQ, anywhere you want to go. For the next several questions I'm going to ask you, it's more from the timeless advice standpoint. So what? Any answer that comes to mind with respect to risk management?

08:56

The biggest risk that we have seen camps actually not from our you know, trial and error and there are some because I mean like we expected to have visibility completely within a year. Well, now we're in fourth year and, and that's, that's, that's a plausible risk. I mean, nothing is perfect. And it's not such an easy to put such a complex technology on such a complex patch that, you know, has to do with can kill a person literally.

09:25

So it's, it's, it's, it's, it's a very complex and, and, and, and process and it takes time. And we have been very successful and we're hitting the milestones as we expected just a little bit later than expected. And here comes the risk. The risk is if you take money from the market. We took them in 2021 at the NIPO when we were up listed and, and we're paying severely for that, for those warrants that, that

09:56

were issued at the time. The, the, the things that will have have have been done based on, on the hedge of those warrants from, from, from the people who owned them at the time was absolutely atrocious. We have purchased most of them. We're very lucky unlike other biotech companies. And and if you see our stock price, considering that we had a forward split, even it's higher than the price of the APO after four years. It's unheard of in our space

10:24

these days. If I look at all the companies, the same banker to public during the same space at the same time, all of them have been absolutely disseminated. I can give you all the symbols, but they're destroyed.

10:39

Those investors who invest, they lost everything, all the money, some of them have been delisted already and they were offering us, they were offering us $30 million like within three months after the 1st 5 million they gave or 6,000,000 I believe we raised in 2021 October and I just saw what was happening. I said we're never going to take money from you again ever and we didn't. So that's our risk management. I mean we just stay away from market manipulators.

11:06

We purchased most of the warrants outstanding. I don't think they even know that. So they still think that a million warrants are standing there. Not if they look at that, I mean, they're probably half left and they severely hedged against them. There is no way anybody's going to sell them stock. There's no way they're going to cover the positions through our races because we just have our own investors, I mean, who actually were very, very, you

11:31

know, supportive. And we just met with our biggest investors in Milan two months ago, explained to me exactly what was happening. And, and if they are not happy with the delay, but they completely support it when they know within the year we are going to have the product on the market. And also what's going to happen within a year those warrants they five year time is over.

11:53

So once the time is over, even if the stock does not jump after that, and I, I really doubt you will not with all the milestones and things that are coming up. I mean, you will hit the market, you will, you will hit the street. I mean, we're going to be, it's going to be there because you've seen that stock around from $3 to 12140 million shares in New Year's Eve 2021. I mean this happened, those things happened, then all of their positions are exposed.

12:20

And actually I want to speak about the New Year's Eve, if you can check that day at December 31st, 2021, it was extremely interesting thing that happened. We were about just three months public on NASDAQ, but I, what I mentioned at the beginning that would share the, the news with our bankers that you know, that, that they wanted to see the news when they're coming. So I would mention that every time the news hit, like we'll have the patent during that time, US patent right away.

12:48

There is like a suppression of, of, of selling even in pre market to keep the stock down. And, and, and then I mentioned one once it happened and twice it happened. Then I told my partner Gareth that let's just be quiet about the next news that comes. Let's not tell anybody. We even fired our PR company that I recommended. We didn't tell anybody. So December 31st, oh, we had a press release. I didn't put too much stock into

13:14

that. It was just a patent received for the South Korea. And on the US patent, the stock actually went down in in November. We received it. And so at 7 morning we put the news. I did not even look at the stock. And then I look at the stock right before the pre market stock traded millions of shares, it was already from $3.95 and during the day one to $12.00 and 140 million shares that day were the most traded stock in the US, more than Google, more than Tesla, more than anybody.

13:44

So it just shows you that the, the, the, the atrocious thing that I've done here. And then, yeah, within two weeks they were able to bring the stock down. So once they brought the stock down again from $12.00 to five within a week or two weeks, I, I remember, I mean, they were able to do that. I told my partner that we'll never be able to raise money in the market. I mean, that's not the way to go. They're going to destroy us. So we took a pay cut across the

14:09

board, about 50% everybody. That would save us $600,000 a year. That kept us alive for the next 2 1/2 years, I believe, until we raise another $2,000,000 from our biggest investor. And then last year, we're very, very close with everything. We'll raise another eight and a half, $1,000,000 from the same investors, a couple more that came on board. One, one of them is a billionaire actually. And, and that's how we're

14:39

keeping afloat. I mean, they still, I mean, we still in the severe manipulation of the stock. Like we'll have a, an analyst right now who's watching every trade on the stock. So during the shareholder meeting this year in January, we also had some news and the stock suddenly jumped. It jumped from under $5. It went again to $12.00 or 4 million shares. And then we checked all the trace, all the DTC movements and the real movement from 1 clearinghouse to another was

15:10

60,000 shares. Everything else was internal. It is possible, I think probably, but highly illogical and and we requested some, some, some explanations from DTC and we didn't get any and I don't think we will. So this point, I mean, the only thing we can do, we can control things that we can control. We're going to complete our milestones. If we're going to do everything that we can, you know, we're to avoid raising money in the market and we're very successful for the last four years.

15:43

If they did not get the idea yet, they were not coming back. I don't know what's going to make them there. So I don't think they will. They'll continue doing the things, whatever they're doing, and eventually we'll see who's going to come on top within the next 12 months.

15:55

Yeah. So what you're saying here from a risk standpoint is to make sure before you do a deal, whether it's with the banker or with anybody, your neighbor down the street, make sure you understand the entire 360 view of that deal and the consequences of the deal. Because even though early on the bankers were giving you money, the terms were bad and you could see some nefarious action going on. And the other people that took that money, all their stocks went straight down.

16:18

So you managed to survive. Well done. And that's kind of a risk that most people don't look at. Somebody sees the money, they just take it. And that's you're saying, hold on a second there, there's consequences. Make sure you understand those consequences that. There are severe consequences and and then I saw it. I mean one of the businesses was actually not a bad business. I mean they had probably about our size 1, maybe bigger. They had $2,000,000 in sales.

16:40

We had this half a million sales when we went in 2021 and and they grew up to 20 million or 30 million in sales, but their stock was disseminated, they had been delisted. So they don't own, I mean, whomever, whomever were the original owner of the company, they have been fired during the time, during those four years. So the concept, I mean, I already understood it. It's, it's quite simple. It works almost if you take money, it works like a magic.

17:09

I mean, they will destroy you. So for, for my advice, anytime somebody offers you a deal with warrants attached, be very aware because what's going to happen, they're going to sell the stock right away and they're going to short multiple times of above the warrants that have even that they can't, they can probably hatch one per warrant. I mean, I don't know, depend on how many shares the warrant providing they can buy, but they will sell multiple on that on the same warrant and, and they

17:37

will thank you. And then they will probably ask you to lower the price of the warrant like they asked us. So they can exercise, but they will not exercise. They will shorten more and they'll give you money at the pennies and, and, and, and eventually we'll, we'll complete the, you know, the original shareholders out of their stock.

17:55

So that's, that's the foremost, at least that's what I've seen and all that our peers, all the companies, I can give you the symbols that went public at the same time with us, were right around with us. And they're just absolutely destroyed. They have penny stocks right now. Yeah, understood the specs and all that kind of fun stuff, so I'm familiar with what you're talking about. Let's talk about timeless

⁠¶ Timeless Business and Life Wisdom

18:14

lessons, Sergei, and mistakes. What are some timeless lessons you've learned along the way and how do you learn from them? Timeless mistakes and how do you learn or avoid them that you want to share with the audience? Well, I mean, again, the biggest mistakes would be to go back to the market. But on a personal level, I mean, whatever happens in business is business. Whatever is personal is personal. And you know, life goes on.

18:40

Pay attention to your family, to your kids that grow up very fast and don't waste the moment with them or with your family in lieu of, you know, taking a meeting with somebody that probably is just going to be a waste of time. And most of it I just regard it like that time is the most precious commodity that we have in this world. Yeah, I couldn't agree with you more. It's it's the most precious value, most most precious commodity, most valuable asset, however you want a word at time

19:09

is really, really powerful. Let's talk about leadership. What makes a great leader, and what are some lessons that you've learned about leadership that you'd like to share with the audience? I don't think there is a match pill for being a great leader. It's from from my experience. I mean what success that we had on Garrus.

19:26

We just lead by example. We're the first ones to take all pay cuts on our biggest salaries and cutting them almost in half and, and showing that we're in the same boat with everybody else. And, and, and, and, and that's why we created an extremely powerful team and we have absolute trust in everybody who works with us.

19:47

And, and that actually allows us to have some more time like for Garrus to go to Japan right now and, and accept awards and, and spend more time as a family because everything works very smooth in this company. And everybody knows that task and and they're doing absolutely best knowing what's at stake. I love that. Let's talk about a final question for you. The best piece of advice you'd like to give the audience or your 30 year old self?

20:12

My 30 year old self, I mean, that's actually because I just when I was getting into business and, and boy, the mistakes I made at the time. So my 30 year old self, again, everything is related to time. Like, like Kipling was saying, you know, if you can feel unforgiving, you know, 60 seconds worth of distance run. It's, it's all about the time. Don't forget to be happy because at the end of this is the purpose of life and everything comes and goes.

20:42

Money, the value of money is just money at the end of the day. If anybody thinks that money is going to make them happy, they are fooling themselves. They probably never had money. So that's, that's, that's the biggest, the advice I will give, you know, myself, just continue to live your life and be happy. It's step by step and try to surround yourself with people that you can trust, absolute

21:07

trust. And that's, that's the most important thing because with, with the age, everybody understands and with the more deal they, they, they do. And I have my book tool. I wrote it in 2022 and it's a little bit longer than than than in a journey, Not by pages. And then Garrus's book. Garrus's book is just about, you know, from his college to because he had a much shorter life. He's just 35. Mine goes all the way to 80s when I was a kid.

21:34

And and the scars that you have in life and every experience that you have is going to scar you. But the scars at the end of the day is your wealth. You also have experience that help you navigate, you know, life, Father, and with every scar, you're going to be more protruded in the people you need and what they say. So that's that's not actually no, the advice. Just beware. That's really powerful. Well, thank you so much, Sergey, for taking the time.

22:05

People can learn more about your viewing website on nutribrand.com. I'll have that in the description, and the ticker symbol is NTRB. Hopefully we'll have you on again soon. Thank you.