Inside his gated, anonymous-looking office building in Arlington, Odes Mitchell snaps open a can of Diet Coke, even though caffeine is the last thing he needs right now. The 57-year-old pharmaceutical entrepreneur seems several cups of coffee ahead of his staff. “I’m a little hyper,” he apologizes more than once.
“Hyper” doesn’t begin to explain this driven, constantly engaged man, whose hard-scrabble rural childhood motivated him to put Palo Pinto County in his rearview mirror and found a successful pharmaceutical company.
An abhorrence of agricultural work, coupled with what he says is divine intervention, drove Mitchell to make a go of it, he insists. Then there’s his over-the-top work ethic. He worked 14 years as an American Airlines baggage handler, mostly at night, on weekends and holidays, so he could get his—quite literally—closet-sized drug company off the ground.
Mitchell’s GM Pharmaceuticals Inc. (“G” for God, “M” for Mitchell) racked up sales of $35 million in 2016, a 388 percent increase in two years. Thirty percent of that was net profit, he told D CEO. The kid who unloaded trucks for a living now drives a Porsche SUV, and his 7,300-square-foot home in Dalworthington Gardens—a New Deal-era community planned as an egalitarian, semi-agrarian community—is tax-appraised at $1.2 million.
In the early days, between baggage-handling shifts at DFW International Airport, Mitchell called on doctors to see what drugs would be useful for their patients. With an uncanny knack for uncovering effective but overlooked ingredients, he began with one medicine, then gradually added others until he was marketing entire lines of pain relievers and cough/cold medicines. Many have multiple attributes and are free of dyes, sugar, alcohol, and gluten, which is helpful for people who can’t tolerate national brand remedies. GMP develops and owns the drugs, which are then produced by contract drugmakers such as Method Pharmaceuticals in Arlington and Atlanta-based Mikart Inc.
Mitchell’s 24-employee, family-run company—his wife and two older children are part of the operation full time—has gone from that cramped closet to several buildings, and now he’s outgrowing those. GMP, which started with a handful of Arlington drug stores, now supplies major retailers, including the Kroger and HEB supermarket chains.
“What sets him apart in an industry where extended [payment] terms are a norm, and paying late is even more of a norm, is that Odes was always the one who paid early,” says Scott Tucker, founder of Arlington-based Method Pharmaceuticals, and formerly vice president of another GMP supplier, Great Southern Laboratories of Houston. “Everyone wanted his business because he always paid his bills.”
For more than a decade, the Southern Baptist who believes he is blessed with good fortune has been giving back by volunteering twice a week at the Assessment Center of Tarrant County, a shelter Catholic Charities runs for abused and neglected children. He and his wife Sandy also adopted a mixed-race girl from a similar background, and they’re in the process of establishing a philanthropic foundation.
‘He Was Never A Kid’
Three memories stand out in Mitchell’s childhood. With no kids his age to play with on the family farm southwest of Mineral Wells, Mitchell kicked and threw a football for endless hours in the front yard. One day a skunk chased him into the house, and he accidentally trapped it in the doorway. The critter sunk its teeth into his index finger and wouldn’t let go. Aroused by the boy’s agonized screams, his mother rushed over and choked it off his finger. The varmint took off—with his brother John and a propane delivery man in hot, but fruitless, pursuit. Unclear whether the skunk was disease-free, the 6-year-old Mitchell endured 14 days of painful rabies shots, no doubt contributing to his later resolve to leave the farm.
Then there was the time John pinned down Odes’ shoulders and spat in his face. Laughing over the adolescent episode, John Mitchell, now 64, argues that it toughened up and prepared his younger brother for the cutthroat business world: “I’ve told him more than a few times, ‘If I hadn’t held you down and spit on you, you’d never have made it.’ ”
As a teen, Odes Mitchell was surprised to learn that spring and summer vacations for classmates didn’t mean days baling hay and digging fence posts. He recalls a single family vacation—to Colorado Springs, Colo., where his oldest brother was then serving in the Army. “I hated farming,” says Mitchell, who was instructed to operate field equipment before the age of 10. “I was really a ‘city boy’ in a farm family.”
“He was never was a kid,” says Doug Montgomery, who met Mitchell at the pencil sharpener in first grade and today owns Ford-Lincoln, Kubota, and New Holland dealerships in the North Texas town of Stephenville. “Neither of us wanted a hot rod. We wanted to get out and get a job, better ourselves. We were ‘old men’ in high school. We worried about what was next; not interested in playing around.”
Montgomery, who has remained a close friend, says Mitchell easily stood out from the other students: “He was the type of guy that if he got in front of you, you were going to like him. He had that personality. At sports, though, he was going to out-hustle anybody he was in competition with.”
Odes–his father named him after an old friend named ‘Otis,’ but misspelled it–would be the family’s second to attend college, which he knew was his ticket out of Mineral Wells.
Mitchell’s father, who worked as a diesel mechanic at the U.S. Army’s Fort Wolters near Mineral Wells, after an early dinner would farm 70 acres of his own and another 80 leased acres nearby. He grew cotton and peanuts, later hay and wheat, bred a few cows, and had the family grow many of the vegetables, chickens, and hogs that they consumed. Mitchell’s mother was a salesclerk at Sears and later worked at a box factory, and was master canner of the farm’s produce. Neither parent had finished high school.
Mitchell made good grades. “He had trouble with reading, but was brilliant in math and science,” says Montgomery. “Odes would say, ‘I’ve got to read these things three, four times before I get it.’ ” (Mitchell says he still reads too slowly, but has learned to skim, and enjoys spending hours scanning government reference materials.)
Being a standout on the high school football, basketball, and baseball teams made him something of a local celebrity, which irked older brother Ronny while on leave from Korea. “I’d walk into stores in Mineral Wells and suddenly I was not Ronny Mitchell, but ‘Odes’ brother,’ again and again,” Ronny recalls. “I stayed out of town after that.”
Frank Riney, Mitchell’s coach from 6th through 11th grade, says he was easy to teach, because “he’s like a sponge.” Mitchell “had success written all over him,” Riney adds. “He was the premier baseball pitcher in town, and I knew from an early age that he was quarterback material.”
He made the varsity baseball team as a freshman. “The seniors hated me,” Mitchell recalls. But he won them over “by learning how to tell jokes.” During his sophomore year, he scored on a 70-yard run for the junior varsity football squad. Although he eluded tacklers, Odes was far from fast. Riney said he joked after the epic run: “You scored, but we got a game-delay penalty for being so slow.”
Odes—his father named him after an old friend named “Otis,” but misspelled it—would be the family’s second to attend college, which he knew was his ticket out of Mineral Wells. He could have been a quarterback at a two-year college but, he says, “Above all, I wanted an education.”
At the University of Texas at Arlington, he studied marketing and became a walk-on punter. The team already had a starting kicker, and even when Mitchell beat him in practice competitions, he was kept on the bench until two embarrassing losses. Mitchell excelled when he was finally played, and a scholarship helped his first two years. But he quit the team when he realized that he could cover costs and have something left over by unloading trucks at $13.85 an hour. A summer job as a drilling site roughneck also helped the muscled, 6-foot-1 student who was accustomed to physical labor.
UTA allowed Mitchell to be interviewed by corporate recruiters as a junior, and the 26 companies he spoke with over 18 months made him comfortable and confident by the time he sat down during his senior year with Pfizer, his top choice. Although the pharma giant preferred its sales prospects to have high grades—and, frankly, to be female—the recruiter was impressed with how Mitchell had worked his way through school and hired him.
He snared Fort Worth as his territory, and found he could finish his rounds of doctors’ offices well before noon. Pfizer refused his pleas for an expanded area, so he began selling oil well investments in the afternoon. Within weeks, he quintupled his Pfizer pay, then went into the energy business full time. But it was six months before the 1986 crash, and soon he was without work.
Although he was again offered jobs in Big Pharma, Mitchell wanted to join a company where the more you sold, the more you made. That led him to Arkansas-based Dunhall Pharmaceuticals, a now-defunct niche player. But he quickly came to dislike the company’s top executives.
“I was miserable, but thought, ‘If these guys can do it, I can do it,’” Mitchell recalls. “I felt God put me in this … company to show me how to find drugs inexpensively. And I had met doctors and dentists who after three, four years, loved me to death.”
After Dunhall jettisoned its entire drug line to concentrate on an $895 tooth-brightening kit (soon overtaken by national brands), Mitchell plotted his exit.
North Texas doctors, who confided in him what was needed for their practices, trusted this personable, earnest, country-reared entrepreneur enough to write prescriptions for his eventual line of cough syrups and pain killers. The UTA football team dentist, who knew Mitchell as a player, rented him a closet for $50 a month to store the drugs in. It was March 1991.
There were early tribulations. Tens of thousands of dollars were used by an early associate of Mitchell’s to pay personal bills. Distributors wouldn’t stock his cough-syrup brands, and pharmacists were skeptical. “It’s just a ‘me-too’ product,” one druggist sneered. “And besides, I bet you don’t even have liability insurance.”
Mitchell bluffed, insisting that he did. Then he called his supplier and asked, “What’s liability insurance?” Luckily, GMP was covered by the manufacturer’s policy.
North Texas doctors, who confided in him what was needed for their practices, trusted this … country-reared entrepreneur enough to write prescriptions for his eventual line of cough syrups and pain killers.
From sales strategies honed at Dunhall, Mitchell would convince doctors to try his generic, hydrocodone pain medicine, VanaCet, which cost patients 25 percent less than rival brands. He’d drop supplies off at local pharmacies, telling them which doctors would soon write prescriptions. Then he would tell wholesalers to invoice the already-stocked drug stores—handing them an easy sale.
He became a one-man supply chain and sales force who tossed passengers’ bags at DFW Airport at night, while coaching his children’s sports teams after school.
One early success for Mitchell was Carbatuss, a spearmint-flavored cough syrup with an immediate throat-numbing effect. “I was off to the races,” he says. “This was a product everyone loved.” Costing Mitchell $4 a pint, he wholesaled it for $35, while pharmacies charged patients $16 for four ounces, or $64 a pint. “Suddenly I needed a loading dock and room for 56 pallets,” Mitchell says.
And he needed capital. But he never took out a bank loan. How could he tell a bank he was running a drug company out of a storage closet? Instead, he loaded up his credit cards, paying off the smallest statements, then the next biggest one. But it was a struggle, he says: “At one point, I had to sell the four-wheeler I had bought my son for Christmas.”
When his wife pulled an April Fool’s Day prank, telling him DEA agents were at the door because of mishandled hydrocodone, Mitchell was ready to throw in the towel, weary from working two full-time jobs and coaching flag football, baseball, and roller hockey. “It’s over. I’m sick of it,” he told his wife. But the pain in his chest subsided, he said, when she admitted punking him. “Since I didn’t have a heart attack,” he says, “I ended up making my company work.”
Ups And Downs
Even with a successful drug like Carbatuss, there are pitfalls. “When sales for a product reach $1 million, competition comes out of the woodwork,” Mitchell says. “You get ‘generic’d.’ As small as I am, I get copied on everything I do.” Annual sales that once hit $5 million had fallen to $500,000 by 2004, he says: “You can tweak the product—replacing artificial dyes—but there’s no real protection.”
Then there was a ruthless competitor whose sales reps told doctors that only their cough medicine was “FDA-approved,” and implied that prescribing other brands carried risks, says GMP’s national sales manager, Michael Pegram. They’d also say GMP’s products were not covered by Medicaid, when in fact they were. GMP’s sales dropped as much as 40 percent until that company’s flagship product itself was overtaken by rivals.
Then, nearly a decade ago, GMP lost a quarter of its sales when CVS Pharmacy cancelled all its orders with Mitchell. The national chain had just agreed to pay $75 million in fines and to forfeit $2.6 million in profits for not properly keeping track of a decongestant (found in Mitchell’s and other products) that could be used illicitly for meth production. But a major discovery soon came to Mitchell’s rescue.
GM Pharmaceuticals’ most popular over-the-counter products
DayClear Allergy Relief
This liquid is said to provide relief of allergy, sinus, cold, and flu symptoms for up to eight hours “without any extra ingredients.
DayClear Sinus Pain & Pressure Relief
Described as a “power-packed” liquid formula, this GMP product is said to open up nasal passages and quickly knock out sinus pain.
TexaClear Daytime Cough, Cold & Flu Relief
GMP says this formula delivers non-drowsy relief to “control a cough as big as Texas” and fight allergy, cold, and flu symptoms.
TexaClear Nighttime Cold & Flu Relief
This TexaClear offering is said to “work fast to relieve nighttime cold and flu symptoms” and, like the daytime version, is gluten-free.
DayClear One Dose Medications
This formula is available in both DayClear and NightClear versions to help relieve pain and allergy symptoms and as a sleep aid.
An ingredient called Chlophedianol Hydrochloride “changed my world,” Mitchell remembers. The obscure, non-narcotic ingredient had three key properties for a cold remedy: it numbed the back of the throat, dried nasal passages, and stopped the cough reflex. By comparison, ingredients used in popular brands then had just one of the attributes.
Mitchell, an inveterate researcher, had found the ingredient in the Food & Drug Administration’s list of 300,000 over-the-counter drug products, a sort of “recipe book” known as the OTC monograph, which covers acceptable ingredients, dosage, formulations, and labeling, according to the agency’s website. Crucially, if a drug company used a product correctly, it can be marketed without further FDA review, saving millions of dollars.
Darlene Boudreaux, founder and former CEO of the Grand Prairie-based manufacturer PharmaFab, and now executive director of business incubator Tech Fort Worth, said anyone in theory could have made the discovery by poring over the OTC monograph, which can be a mother lode of potential riches. But the one who did it was Mitchell. The hard part is being able to market an effective product, she adds.
Boudreaux says Mitchell has maintained an extremely low profile, which is not unusual in the wary pharmaceutical trade. One of GMP’s niches that particularly impressed Boudreaux were GMP’s DayClear line of cold and antihistamine products suitable for highly allergic children (the drugs were free of dyes, sugar, flavor, alcohol and gluten).
Chlophedianol had been approved in 1970 by a small (and now defunct) company called Ulo, which stopped marketing it three years later for unknown reasons. “If there had been a problem, it would have been yanked” from the FDA list, Mitchell says. After further research, he concluded that it was effective. Moreover, it was less sedating than many popular cold remedies, allowing children who used it to go to school and adults to work and drive. “Not only was it viable—no one else in the world was making it,” Mitchell says.
But when he approached a Houston manufacturer, Mitchell was met with skepticism. Scott Tucker, then-executive vice president at Great Southern Laboratories, said, “If this is so good, how come someone else in Big Pharma hasn’t started marketing this product? What makes you so smart?”
A few days later, Tucker called back and told Mitchell he was right: “No one is making this ingredient.” Great Southern sent Tucker to Italy to arrange for manufacturing, requiring Mitchell to buy 100 kilograms (or 220 pounds) a year for two years—a highly risky commitment for GMP.
Chlophedianol couldn’t be patented, but combinations with other cold medicine ingredients could. Mitchell has filed for 113 matchups, which cost him upward of $100,000 in legal costs and filing fees, but hopefully will protect GMP until 2034.
“This is a game changer for me. Before, I didn’t want to grow a new product only to see it ‘generic’d’ by a competitor six months later,” he says. “From then on I started to work only with almost all patented products. That’s why we’ve been blowing up and getting increasingly national.” GMP is strong in Texas, Oklahoma, and Florida, and some of its individual products are sold in 40 states.
In 2007, the year Mitchell learned of Chlophedianol, GMP revenues were under $2 million. They remained around $5 million a year until they jumped in 2014, hitting $9 million, then $22 million the following year, and $35 million last year. The ingredient was used in a major seller for GMP called VanaCof—as in “makes coughs vanish”—and in some of its DayClear over-the-counter line items.
“Chlophedianol changed my life. It’s a gift from God as far as I am concerned,” says Mitchell, who is all too aware of the danger of complacency. Four new drugs are in development now, and former “Dating Game” host Chuck Woolery has signed on to promote a DayClear allergy product.
“You quit researching, you die,” Mitchell says, pondering GMP’s future. “You can have too many sales reps, but not too many drugs.”