CEO & Owner of Nephron Pharmaceuticals Corp.
For more than 18 years, Lou Kennedy has worked for Nephron Pharmaceuticals. In 2007, Lou assumed the lead position as the company’s CEO. Experiencing mercuric growth, doubling the employee base in less than two years and completing a $12 million expansion in March of 2019 for an additional 50,000 square feet, Lou seeks the best high-tech equipment (95 percent of which heralds from Germany or Switzerland) to fill the state of the art facility.
You are an only child. Was your mother an educator?
Yes. My mother was a schoolteacher for 40 years. She was great with very unruly little boys and was an amazing first grade teacher for that reason. I think she was more comfortable around males. I probably have a little bit of that tendency. She is a very loyal woman and very protective of her family. She is also very direct and expects a lot. I believe that 100 percent of the reason I am a perfectionist and hard worker is because she expected a lot. That is not to say she was pushy. She would say, “I’m okay with any of your results, it just needs to be the very best you can give.” She never said, “I expect As.” She just expected me to live inside the rulebook.
You were recently inducted into the S.C. Public School Graduates and S.C. Educator Hall Fame.
Yes, I am proud of that award. I have no idea who nominated me. I get very tired of hearing that we need to work on education in South Carolina. I agree. We should always strive to be better. We have a lot of opportunity to improve, but we also have a lot of success. When we continually talk about what’s wrong, we don’t celebrate what’s right. There are quite a few of us that turned out to be okay, and we were educated here in South Carolina. Let’s talk about that. Not just what’s wrong, but what’s right.
Why did you major in journalism at the University of South Carolina?
Originally, I thought I might like to be a food writer or a television chef. This was before Paula Dean. I love to cook and bake. But broadcast probably wasn’t an option for me with this accent. I looked at advertising and the public relations side, and thought public relations was a good fit. I have a marketing minor from the business school because I am wired like a salesman or a marketer. I cannot stop thinking about how to create things.
You are the consummate creator with a competitive edge?
There is no question that winning and competition is a huge motivating force in every aspect of life. I hate to lose. The creative part is just in my DNA. It is my therapy and release. I absolutely love any kind of art and design. When I was a new single mom, for a short time, I supported my daughter and me in part, through painting. I feel like we should quit talking about STEM and talk about STEAM because it’s a proven fact that, when you weave the arts into the equation, you are more productive. I believe it gives us a better outcome when we think about things with both the left and the right brain.
You met your husband at a football game in 2000?
That’s right. South Carolina Gamecocks beat Georgia. It was a great year and not always the outcome when those two teams play. We met in the fall of 2000 at a local restaurant owned by his fraternity brother.
Was it something that happened immediately, or was it a friendship that evolved over time?
Well, my girlfriend who set us up called me the next day and said, “What did you think about our friend, Bill?” I said, “I’m a tall girl. He’s not so tall. I’m younger. He’s older. He’s probably not my type. I’m probably not his type. I don’t know.” She said this famous line: “Let’s review your type. How’s that working for you?” I said, “You have a point. If he calls me, I’ll definitely go out with him and see where it goes.” About the third or fourth date, we began talking more frequently about his business, politics and life.
So, it was his mind?
His brain is amazing.
Tell me about Nephron and you becoming CEO and president of the company.
When I first met my husband, I asked him what he did for a living. He said, “I’m a pharmacist, and I have a manufacturing facility.” As any mom will tell you, if your child has ever been on a medication, you immediately become an expert on that disease and medication. When he told me that he made albuterol, like any mom, I immediately said, “My child has had bronchitis and has been on albuterol.” I am also wired like a marketer, so I asked, “Who are your customers? Who do you sell to? Who do you market to?” His old company only had three customers: a nationwide home care company and a couple of other home care companies that worked out non-competes. The entire conversation happened within ten minutes after I met him. “Why don’t you diversify? I mean, three customers? Doesn’t it seem like you might need to expand on that?” I can’t help myself. This is just how I think. When we started dating, he said, “I really love single moms who get no child support or alimony. They work harder than anybody else to support their kids, and they’re the best employees.” I remember saying, “Thanks, I guess.” And I said, “I would never work with you if we are to continue dating.” About a year and a half later, I finally realized that it would make a lot of sense if we worked in the same place, so that if we wanted to go to a football game or anything, we’d be on roughly the same schedule. When I started with Nephron, he asked me to build a sales force so that we could diversify and move into other classes of trade, like hospitals. Later on, in 2006, we entered into the pharmacy or retail class of trade. The sales force was my baby. I had absolutely no clue how to build a sales force. I decided that if I liked to sell and I liked to close, I would fly around the country and meet people who have a similar work ethic. It seemed to me that should work, and it did. I do the sales training, and we grew the company very, very quickly. Now, it is much harder to carve out time. We started adding equipment and machinery, and in 2006, we opened Nephron up to the retail class of trade. By 2007, he asked me to take over as CEO. I learned very quickly that, as a right brain gal, I had a lot to learn about a pharmaceutical manufacturing plant. I am very comfortable selling, but I had to learn about the company. I had to get into our chemistry and microbiology labs and learn what it means to do an assay test, what osmolarity means and a few other things. I began to review each department to see how I could “put my stamp” on it—boost efficiency, lower costs, and in particular, make improvements in the area of quality. I began very grassroots and just rolled up my sleeves.
Tell me about the sales force.
We have sales reps all over the country, some with bigger territories than others. We have an inside sales force of about 20 who support the approximately 20 outside folks.
I love it. Because that’s my background, we do everything in- house from the original idea to creating the marketing collaterals. You have to remember too, that the 21-year-old part of our business is in the generics business. We don’t do the same type of marketing as a larger branded pharma might where you market directly to the consumer. We market to certain channels through conferences as well as directly to the hospitals. We offer value- added service around their needs through samples.
How many products?
We have 25 in the 21-year-old part of our business, which are all respiratory, nebulizer solutions. In the two-year-old division of our company, we have about 45.
How many employees does Nephron have?
We’re about to hit a thousand. We have four shifts and lots of automation here. When you walk through our facility, you don’t see too many people, unless you’re in our labs, because they’re doing a lot of regulatory functions and review of paperwork and things like that. It doesn’t look like a factory might have 50 years ago.
How do you and your husband divide the work load? Is it by skill, or do you share everything?
We absolutely can finish each other sentences. We share everything, but his focus is on business development. He looks at new products, companies to work with, licensing or purchasing product. He also focuses on the development of new products here in-house. We have a lot of European equipment here. When we were building this facility, he really focused on global currency for conversion purposes. He easily saved us 25 percent on our equipment costs just by doing that.
Your equipment comes from Switzerland and Germany?
Yes, I would say 95 percent of all the equipment that you see in this facility comes from Germany or Switzerland. We consider them our sister locations. Our packaging equipment comes from Bosch, which is located in Schaffhausen outside of Zurich, Wilco, Maropack in Zell, along with Rommelag in Germany. I am very impressed by the technology from that part of our world. The automation is amazing. We are currently looking at new equipment from other vendors in that area.
From 2000 to 2007, Nephron experienced tremendous growth.
I hate to say it, but we’ve been in tremendous growth mode for the last 19 years that I’ve worked with this company, truly. Beginning in January of 2017, we marketed $5,000 in products. Last month (2019), we shipped over 11 million. So, in two short years, we have grown exponentially. We just finished a $12 million expansion and received the certificate of occupancy for an additional 50,000 square feet of clean rooms and more office space last week. We had 425 employees last December, and we have almost a thousand now. Explosive growth is all I know.
Does it scare you?
No, I love it.
Do you ever have fear?
There’s one time of the year that we have all of the employees come together over a three-day period. It’s called Current Good Manufacturing Practices Training. When they are all together like that, I look out, and I see how many people are counting on me to make good decisions, and I get a lump in my throat. These are decisions that affect their families, their family’s insurance. Good decisions have to be made. You’ve got to lead the right way. I never think about it on a daily basis, but, at that particular time of the year, it’s very—I don’t know. I become very conscious of the responsibility. It’s right in your face.
It is a huge responsibility.
I don’t think about it every day. I push forward and want to win. But when I see those people, it’s a reminder that winning is good, and you’ve got to make the right decisions.
What brings you joy?
Well, a big win on the South Carolina football field is a big joyful thing. Nephron is a really young company, and it’s a joy to watch everybody that works in the various departments grow and achieve new and greater skills and knowledge. My daughter works here, and it is great to see her accomplishments.
Talk to me about manufacturing. What’s the biggest manufacturing challenge that you have in the 21st century in the United States of America?
Up until Trump made it into The White House, the single biggest challenges were the regulatory hurdles. Since Trump has been in office, they have really focused on deregulation and making the FDA easier to navigate. So, my answer’s a little different than it would have been two and a half years ago. You can purchase the automated equipment, and you can drive efficiencies. Those things are pretty easy. But because you have no control, it is still hard to navigate the regulatory waters.
I think I read a quote that either you gave or was attributed to you: “I’m a New Yorker with a Southern accent.”
Yes, I definitely have this accent, but in every other way, I’m like a New Yorker. I can’t tell you how many times people have told me that.
Do you have investors in this company, or is it private?
No. It’s private. My two stepdaughters, my husband and I own it outright.
Do you ever consider anything about divesting?
No, I would never want to take this company public. I don’t want to answer to anybody other than myself and my husband at this juncture in life.
What’s a 503B?
That is the new division of our company, which is the title of the regulations that Congress passed in 2013 in response to what happened in Boston with the New England Compounding Center. Some of their injectable medications were contaminated, and many people who were using those medications contracted spinal meningitis and died. Congress decided that it was time for the FDA to govern sterile compounding, while allowing the boards of pharmacy to still be involved. The ultimate governance would move to the Federal Government. 503B regulation sets forth the standards they expect. 503B sterile compounding is whatever the manufacturers, big pharma, generic pharma, must do to be considered a current good manufacturing practice facility. It is the assurance that, if you get any medication that was made by a sterile compounder, it was done in an environment like manufacturing.
How is the 503B doing?
It is the division of our company that’s grown the fastest. In January two years ago, our sales were $5,000, and now we are at eleven million in a month.
What do want to be remembered for?
Leaving this place better than I found it. Making sure that women in the South know that it’s okay to be a breadwinner. It’s okay to do things other than having a M-R-S Degree. It’s okay to work really hard. It’s okay to be a mother and a businesswoman; they don’t have to be mutually exclusive. We have a long way to go in many parts of the Southeast paving the way for women to work as hard as you and I do, have a family and be proud of both.
Have you instilled that in your daughter?
Well, I’ve tried to model that, and I have talked about it ad nauseam. Who knows what will happen when I’m no longer on the planet. But, she’s seen it by example. I wish she’d embrace it a little more because I took so long to really get started on this part of my life. I was in my late 30s before I started to get it right, and those were such great wasted years of working hard but not in the right way. I was losing a lot of my youth working really hard but not accumulating any wealth or doing the right things with it.
Tell me about that because your life seems so charmed.
I had a great upbringing, and then I made a poor choice in a husband. I got a great daughter out of it, but I made a poor choice in the sense of trying to build a happy home life, accumulate wealth and do something for my child’s future. Until I got out of that situation, which was extremely difficult, I had some really lean years. And I’ll tell you, I am forever thankful for those almost ten years because I believe it helped me to have an unofficial PhD in psychology. I have a zero-bullshit tolerance. I don’t allow any lying around me. I will fire people for a lie. I just don’t tolerate cheating or lying.
Were you abused?
Oh, verbally for sure.
Do you feel all of that made you what you are?
Yes. I actually was called names. I had to ask people what they meant because I didn’t know some of those nasty words until I was called them. I’d have to say, “What does that mean?”
Were there drugs involved?
So, you’re familiar with addiction?
Painfully so. Both drugs and alcohol.
Addiction is something you are sensitive to, but surviving it also made you who you are?
Yes, it helps me in everything I do today because I know what sets people off and what doesn’t. I can read temperament very well. It is like a PhD in psychology.
What lesson can you share with young women from the wisdom you have garnered through life’s ups and downs?
Always put your whole heart into anything that you do. Tackle anything with all the effort you can muster. Focus on winning or achieving, whatever needs to be done, and do it a hundred-plus percent every time. There’s no way you can’t have a great life if you do that. There’s no way. And faith is important. Have confidence and faith in yourself or God or your higher power, whatever you need, to muster that kind of resolve. Have a work ethic. That’s been so lost. I find a lot of the younger folks that I interviewed can’t self-start. They can’t make a decision without a syllabus or a roadmap. They don’t have problem solving skills, and I think if we could, as parents, get out of the way and let our kids fail a little bit, let them trip up a little bit, make their own decisions, we’d be doing them a better service. And then I would tell you that as a lady in the Southeast and a mom in the Southeast, we have a lot of opportunity to inspire young ladies to do anything they want. Not just certain career paths, but to be able to make it okay to be a working mom or a working woman without kids. A woman who can be married or be single, and it’s okay. There shouldn’t be just one cookie-cutter way of doing things.