[@jackneel] "They Don't Want This!" The Irish Founder Using Chili Peppers to Solve The Fentanyl Epidemic

Link: https://youtu.be/HB6E7TxGXqg

Duration: 87 min

Short Summary

Irish entrepreneur Gareth Sheridan (also known as Gareth Kelly), founder of Neutraband (formerly Avera), discusses developing abuse-deterrent technology for opioid patches by coating them with denatonium benzoate and capsaicin to prevent abuse and accidental exposure, starting with fentanyl as a proof of concept. He shares his bootstrapped business journey from Ireland to a $20M valuation with only $40 in the bank, surviving an SEC investigation, and briefly running for President of Ireland as the youngest nominee. Sheridan emphasizes his philosophy that "with the right mindset, there's no such thing as failure—it's only feedback."

Key Quotes

1. "fentinyl is a synthetic opioid that's 50 to 100 times stronger than heroin" (00:00:28)
2. "2016 to now the market size for fentinel patches if you want to use that as an indicator uh is down about 75%" (00:12:35)
3. "Probably about 20 million. >> And how much did you have in your bank account? >> $40" (00:59:00)
4. "with the right mindset, there's no such thing as failure. It's only feedback" (02:02:48)
5. "We're talking one person every 5 minutes. So, 24 people have died from an overdose since we started this." (02:02:12)

Detailed Summary

Overview

Irish entrepreneur Gareth Sheridan (also known as Gareth Kelly), founder of Neutraband (formerly Avera), discusses developing abuse-deterrent technology for opioid patches that could prevent both abuse and accidental exposure. The interview covers the fentanyl crisis (which claimed 24 overdose deaths during the ~120-minute recording), his bootstrapped business journey from Ireland to a $20M valuation with only $40 in his personal bank account, surviving an SEC investigation, and his brief presidential candidacy in Ireland as the youngest ever nominee.

Neutraband's Abuse-Deterrent Technology

Gareth Sheridan founded Neutraband to revolutionize the safety standards of easily abused medications by coating the back of fentanyl patches with two powerful deterrent agents. Denatonium benzoate—the world's most bitter substance—and capsaicin (red pepper spray) are applied in both immediate and slow-release forms, causing users to instinctively spit out the patch if they attempt to abuse it by chewing, sucking, or smoking it. Used fentanyl patches retain up to 70% of their residual fentanyl content and can be sold on the street for approximately $100, making them a significant abuse vector.

• The technology aims to achieve 90% greater safety while maintaining equivalent drug effectiveness for legitimate chronic pain patients
• Neutraband advocates for a government mandate requiring abuse deterrence in all opioid patches sold in the US
• The company plans to pursue regulatory approval to make the technology mandatory rather than optional
• Avera's threefold goal includes preventing abuse by people with addiction, increasing access for chronic pain patients, and nearly eliminating accidental exposure in children
• Dozens of hospitalizations of children under 5 have been linked to improperly discarded fentanyl patches left within reach
• The technology is applicable to an entire family of opioids including fentanyl and buprenorphine, as well as other addictive medications like methylphenidate
• The company is exploring a buprenorphine patch as a nicotine-patch-style replacement for methadone clinics

The Fentanyl Crisis and Its Death Toll

Fentanyl is a synthetic opioid that is 50-100 times stronger than heroin, causing overdose deaths by suppressing the respiratory system while users remain upright due to its lack of effect on balance or equilibrium. Prescription rates for fentanyl patches dropped approximately 75% from 2016 to present due to CDC anti-opioid guidelines and negative stigma, forcing chronic pain patients to seek illegal street sources. During the podcast recording (~120 minutes), 24 people died from drug overdoses in the US—effectively one person every five minutes throughout the interview.

• The anti-opioid clampdown achieved its goal of reducing prescription rates but created an unintended consequence
• Chronic pain patients who could no longer access legitimate prescriptions turned to illegal sources, potentially worsening overall overdose statistics
• The crisis has created a bifurcated problem: over-prescription of the past and under-prescription creating black market demand in the present
• Sherman argues that government-mandated abuse deterrence could address both issues simultaneously

Documentary: The Skid Row Reality

Gareth collaborated with Nick Shirley to create a documentary in Los Angeles's Skid Row area—located just 8 miles from Beverly Hills—interviewing residents about the paths that led them there. The documentary found that an overwhelming number of people interviewed were prescribed opioids without safety mechanisms, became reliant, and eventually ended up in addiction. One story involved a 12-year-old child living with his mother on Skid Row whom Nick helped by putting them up in a hotel temporarily.

• The documentary reveals how legal prescriptions without abuse-deterrent technology can lead to addiction and eventual homelessness
• Skid Row represents a stark contrast to the wealth concentrated in nearby Beverly Hills, illustrating economic disparity in Los Angeles
• The experience influenced Gareth's commitment to developing abuse-deterrent technology as a preventive measure

Pharmaceutical Industry Over-Prescription

The opioid crisis was driven by pharmaceutical companies that over-prescribed medications, pushed drugs on people who didn't need them, and offered major bonuses to sales reps who met quota targets. During the Oxycodone scandals, pill mills prescribed medications like 30-day supplies of OxyContin for routine dental procedures, surgeries, and minor injuries. Peak opioid abuse occurred around 2016, followed by lawsuits, criminal prosecutions, and a clampdown on prescription rates.

• Sales representatives received substantial bonuses for pushing opioid prescriptions on patients who didn't medically require them
• Pill mills operated as illegal or quasi-legal operations prescribing opioids for cash payments without proper medical justification
• Suicide rates for chronic pain patients skyrocketed over the last 10 years because they couldn't access adequate pain care
• Patients were told to take Tylenol for extraordinary injuries or cancer pain, pushing vulnerable individuals toward illegal addiction sources
• The industry created a two-track problem: over-prescription causing addiction, followed by under-prescription causing desperate patients to turn to street drugs

Business Journey: From Ireland to NASDAQ

Gareth started his first company at age 22 in Ireland, inspired by his father who wore a nitroglycerin heart medication patch for 20 years—demonstrating the potential for transdermal drug delivery. He won €20,000 from Ireland's Best Young Entrepreneur competition as early funding, which he used to find a manufacturer in China and sell multivitamin patches through distributors in Dublin. The company was eventually sold to a Utah-based company after listing on the OTC market, then later listed on NASDAQ where they raised approximately $8 million by issuing 1.2 million shares to private individuals.

• Gareth built the company without traditional venture capital, relying instead on startup competition prizes and small distributor orders
• He had a business background but no scientific training, yet formulated vitamin patch products himself
• Neutraband acquired 4P Therapeutics in Atlanta, which had developed the initial concept and patent filing for Avera technology
• The company eventually achieved a valuation of approximately $20 million on paper at its peak

The SEC Investigation and Financial Hardship

The company faced an SEC investigation regarding a filing that stated a vitamin patch product would not need FDA approval based on legal and dermatology opinions that turned out to be incorrect in retrospect. During this investigation period, the company was valued at approximately $20 million on paper while Gareth had only $40 in his personal bank account. He lived in an $800/month studio apartment in Columbus with a mattress on the floor and a $100 couch from Amazon, while his wife Heidi worked as a nanny for a wealthy family. He drove for Uber while running the company and was at one point asking family for help with rent.

• The SEC flew Gareth from Columbus to Miami for an in-person meeting, which signaled the investigation was serious and potentially criminal in nature
• Co-founder Sergey had a shouting match with SEC investigators while Gareth maintained a more relaxed demeanor during questioning
• The final settlement was a cease and desist with a no admit, no deny clause, with fines of $15,000-$25,000 each for the individuals involved
• As a result of the investigation, the company now obtains four legal opinions instead of three on regulatory matters to ensure compliance
• The SEC investigation was triggered by incorrect regulatory assumptions about product classification

Early Setbacks and Business Failures

An acquisition of a company in Columbus, Ohio failed when the partner stole back the IP that had been purchased, resulting in a multi-year lawsuit that consumed resources and attention. Gareth was initially offered 5% equity in an OTC-listed company valued at approximately $1.5 million, which was then diluted to worth approximately $15,000 within days after the acquiring company issued billions of new shares to themselves and consultants—a scheme that regulators eventually caught onto with management ousted and a new CEO brought in. Sergey advised against taking a $1 million bridge financing offer as a convertible note, warning it would convert at a problematic rate that would severely dilute existing shareholders.

• The Columbus acquisition failure involved IP theft and extended legal proceedings
• The share dilution scheme demonstrated how OTC-listed companies could rapidly destroy shareholder value through deceptive practices
• Gareth ultimately lost nearly all value from the equity position when the company issued billions of shares to insiders

Personal Support System and Relationships

Gareth credits his wife Heidi with deserving founder-level credit for sticking by during the tough years, never suggesting he get another job, instead saying "Okay, let's regroup. We'll figure it out." He met Heidi while visiting Utah on business, and she worked as a nanny for wealthy families during the lean financial years. Co-founder Sergey became his business partner for 10 years after being connected through Dena. His parents helped with rent for years, sending hundreds of dollars when short, never suggesting he come back home and abandon his entrepreneurial path.

• The support from Heidi and family allowed Gareth to continue pursuing the company without the emotional pressure of family conflict
• Gareth credits surrounding himself with people smarter than him as essential to his success and resilience
• He emphasizes the importance of building a team where each person can contribute their particular strengths

Presidential Run in Ireland

Gareth Kelly briefly left Neutraband to run for President of Ireland, becoming the youngest ever nominee in the country's history. To officially run, a candidate needs four council nominations, and his campaign only received two of the three available nominations from that route, falling short of qualification. He argued that younger presidential candidates could keep issues like housing costs and immigration top of the national narrative, rather than having older politicians view the position as a "retirement position." The Irish presidential nomination process is primarily dominated by older politicians seeking post-career sinecures rather than younger candidates with fresh perspectives on contemporary issues.

• The presidential run required temporarily stepping away from Neutraband operations
• The nomination process requires gathering support from local council members, which favors established political figures
• Gareth's platform focused on representing younger Irish citizens' concerns about housing affordability and immigration policy

Entrepreneurship Philosophy and Mindset

Gareth emphasizes perseverance and cites historical examples: the Wright brothers were told they were mad for trying to fly, Elon Musk was told self-driving cars were impossible, and iPhones and touchscreens were considered mad ideas 30 years ago. He recommends welcoming negative feedback as essential for improvement, arguing it's hard to improve when everything goes smoothly. He believes entrepreneurs building a movement rather than just a company attract like-minded people and better talent motivated by mission rather than just money. The philosophy he credits with his success is that "with the right mindset, there's no such thing as failure—it's only feedback."

• He received what he considered the worst advice—telling him not to develop Neutraband and come up with another idea—which he chose to ignore
• Gareth loves challenges and sees setbacks as opportunities for learning and growth
• He plans to pursue government mandates for abuse deterrence aggressively, arguing only safe versions of opioid patches should remain on the market

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