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TheStreet Open House

CEO Fought His Way In to Lead Battle Vs. Colds

Stocks in this article: PRPH

DOYLESTOWN, Pa. ( MainStreet) -- Ted Karkus is a newbie when it comes to running a public company.

The 52-year-old gained control of ProPhase Labs (PRPH - Get Report) in June 2009 after an all-out proxy fight as one of the medical science company's largest investors. But Karkus had never been a CEO in charge of dozens of people.

Ted Karkus, CEO of ProPhase Labs, has taken tough steps on personnel and getting the company's products on store shelves.

ProPhase is the maker of Cold-EEZE lozenges, which is made of zinc gluconate. The formula essentially shortens the length of a cold by releasing zinc ions that attach to receptors in the upper respiratory system, blocking the cold virus from expanding. The medicine has proven to be effective in several clinical studies by Dartmouth College and the Cleveland Clinic, according to the company.

ProPhase recently released a mouth spray version of the medicine as well.

"We really don't have competitors," Karkus says. "We are the only clinically proven cold remedy to shorten your cold."

The company sees makers of cough drops and symptom relievers such as aspirin and ibuprofen as their biggest competitors.

"Those products -- they make you feel better for an hour or four hours," Karkus says. "When the product wears off you're as sick as you were. Cold-EEZE actually cures your cold. So you can take the symptom relievers to feel better while you take the Cold-EEZE to shorten your cold."

ProPhase Labs, originally called Quigley, had faced years of revenue declines after Karkus' original investment in the late 1990s. He waged his proxy battle against the original board of directors when he saw a lack of focus on the Cold-EEZE brand and too much energy expended on an unpromising pharmaceutical division.

Karkus acknowledges that when he first took over, he had a lot of work to do on improving the company's bottom line, and, frankly, in learning how to be an effective chief executive.

"When I first took over as the CEO, the company had declining revenues for several years ... morale wasn't good, we were quickly becoming unimportant in the minds of the retailers and consumers were forgetting who we were," Karkus says. "We were in bad shape and in dire need of change."

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