Jean Hoffman has been busy in the 10 months since she led her former pet pharmaceutical company, Putney Inc., through a $200 million all-cash acquisition.
In that time, she’s purchased a commercial building in Portland, launched a family foundation that will be helping local nonprofits, and, most recently, invested in and joined the board of a local healthcare startup.
Last April, not long after Putney was sold to a British pharmaceutical company, Hoffman told Maine Startups Insider that she planned to take the summer off before getting more involved in helping build other companies in Maine.
“I’m sure I’ll be investing or becoming a board member, and looking at other opportunities going forward,” she said at the time.
Her first angel investment was announced this week. Hoffman has invested an undisclosed amount in MedRhythms, a healthcare startup based in Portland that has developed a medical device that combines sensors, neuroscience, and music to help people recover from neurologic injury or disease. The company has already filed a provisional patent for the device, which uses sensors to collect patient performance data in order to individualize music therapy treatment.
Hoffman’s investment is part of a pre-seed investment round that included a mix of current and former entrepreneurs, according to Owen McCarthy, MedRhythms’ president. A portion of the round ($313,400 to be exact) was used to match a $248,700 Development Loan from the Maine Technology Institute the company received in October, McCarthy said.
Hoffman declined to reveal the amount of her investment, but confirmed for Maine Startups Insider that MedRhythms is the first company she’s invested in since departing Putney in April 2016.
Asked what specific aspects of her experience and skill set she thinks will be most helpful in her role on MedRhythms board, Hoffman said: “I think it would be having built two companies from the ground up and having a network of contacts amongst healthcare investors and principals.”
Prior to Putney, Hoffman founded and built Newport Strategies Inc., a proprietary healthcare information technology company that was acquired by Thomson Reuters in 2004.
MedRhythms’ three-member board now consists of CEO Brian Harris, McCarthy, and Hoffman.
Harris, MedRhythms’ CEO, said he’s eager to leverage Hoffman’s expertise as the startup develops its first product and go-to-market strategy.
“Jean’s strategic vision and proven track record in building successful businesses are critical assets to MedRhythms’ growth,” he said.
MedRhythms expects to file for FDA approval of its medical device. Hoffman is intimately familiar with the often-tricky task of gaining FDA approval, having shepherded several generic pet pharmaceutical products through the process at Putney.
Hoffman said she’s been “very impressed” with Harris and McCarthy.
“I have been working with Brian and Owen for a few months and am impressed that both are A players who have the vision and ability to execute and overcome the many challenges that any early-stage healthcare company faces,” she said. “As founders, they’ve identified a market need, developed and filed a provisional patent for their first product, and laid out a thoughtful business foundation.”
Hoffman founded Putney Inc. in 2006 and led the company from inception to its acquisition by Dechra Holdings US Inc., a subsidiary of British firm Dechra Pharmaceuticals PLC, in April 2016.
Dechra acquired the company for $200 million in cash. Hoffman has not disclosed what her personal proceeds were from the sale, though told Maine Startups Insider that by the time of the sale she was no longer majority shareholder in the company. She had sold off much of her equity to fund the company’s research-and-development efforts, she said.
The sale generated an almost 4X return for Putney’s institutional investors, including Safeguard Scientifics Inc. and NewSpring Capital. At the time of the sale, Safeguard disclosed that it had invested $14.9 million in Putney, earning it a 28-percent stake in the company, and received initial cash proceeds from the sale of $58 million.
Besides considering angel investments, Hoffman has also been active in other ways. She formed the Hoffman Family Foundation, which focuses on “supporting community, education and culture and ensuring access to reproductive healthcare in Maine,” as well as “the health of pets, the long-term health and sustainability of the ocean and wilderness, as well as dialog with China,” according to its website.
In June 2016, she purchased the building at 183 Middle St., which houses Bard Coffee, for $650,000, according to the city’s tax assessors office. She also maintains her offices in the building.
Hoffman’s actions serve as an example of the positive impacts an acquisition can have on the community. When s local business is built and sold, it serves as a liquidity event for startup founders and investors who realize a return on their financial investments and sweat equity. In cases where founders and early employees still retain significant amount of shares in the company, an exit (like Putney’s) potentially creates a number of newly wealthy individuals who may be interested in using that capital to launch their own companies or invest in promising local startups.