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Originally published January 2, 2009 at 12:00 AM | Page modified January 2, 2009 at 8:20 AM

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Retail Report

Patent attorney behind OraHealth's treatment for dry mouth

For two decades, patent attorney Jeff Haley helped other people start companies. A lifelong inventor, Haley held patents in his name but nothing worth launching a company until 2001.

Seattle Times business reporters

For two decades, patent attorney Jeff Haley helped other people start companies. A lifelong inventor, Haley held patents in his name but nothing worth launching a company until 2001.

That's when his passion for inventing collided with his training as a chemist to solve his aggravating canker-sore problem.

The medicine — licorice-root extract — is not as exciting as the vehicle that delivers it, a little patch that people place over the sore. Its adhesive is strong enough that it will not slip off but gentle enough that it does not irritate lips and gums.

Called CankerMelts, they have been sold at Amazon.com and Bartell Drugs since 2004, and are now available at Longs Drugs and Rite Aid stores. Walgreens, the nation's largest drugstore chain, plans to start carrying them this year. The product costs $6.99 to $7.99 for 12 discs.

Sales have gone so well that Haley, who sank $700,000 of his own money into the startup, retired in 2006 from the Bellevue law firm he co-founded and has raised $1 million from investors. In the next two months, he hopes to raise another $1.5 million for OraHealth, his new company that has seven other employees and a factory in Factoria.

Haley is on a streak. With the mouth-adhesive discs, which can be set to release medicine over time, he figures the possibilities abound, and he is tackling each one in order of speed to market and potential profits. He is saving prescription drugs, for example, until he has exhausted over-the-counter applications.

Next up: XyliMelts for dry mouth. They are for people who take medication or have disorders that cause dry mouth, which can cause discomfort and lot of cavities.

XyliMelts also come in handy if you do a lot of public speaking or go on the occasional bender.

Why not just drink water? "If you drink enough water, you can rehydrate. But if you put one disc in each cheek, you solve the dry-mouth problem before you go to sleep."

XyliMelts went on the market in November but are sold only online for now.

Haley uses the mouth adhesive for XyliMelts Mints, too. They adhere to your cheeks so you can eat, sleep or play sports while they work, and no one sees you sucking on a breath mint.

Most of the money Haley raises goes toward marketing, he said. "We can stop spending money on marketing at any time and break even."

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His plans are bigger. He wants to sell OraHealth when revenues reach $50 million to $100 million, which he hopes will be in the next three to five years. In 2008, sales from CankerMelts were below $1 million, but they are growing fast and will be augmented this year by XyliMelt sales.

Haley's dream of selling has been stoked by the big dollars fetched by other mouth-product companies, including Church & Dwight's recent $380 million acquisition of Orajel and GlaxoSmithKline's $170 million acquisition of Biotene, which makes popular products for dry mouth.

Meanwhile, he continues to dabble with other inventions. At a patent auction this fall, Haley was paid $100,000 for authentication technology for cellphones that he invented in 2001.

"I sold it cheap," he said. "That [$100,000] gave me more than $3,000 an hour for my time."

— Melissa Allison

Tidbits

Men's clothing store The Industry has moved from Fremont to Sixth Avenue near Olive Way in downtown Seattle, taking space previously occupied by Running Wild Spirit. Founded three years ago by friends Angela Kantanto and Megan Stokke, The Industry features a denim bar with 22 styles of jeans ranging in price from $79.50 to $289.50. — AM

The Specialty Coffee Association of America is holding its Northwest barista competition Jan. 9-11 at the Temple Theatre in Tacoma. The last Northwest regional winner was Billy Wilson from The Albina Press in Portland. Maki Campbell, of Zoka Coffee Roaster & Tea in Seattle, came in second. — MA

Nordstrom reports that its Ultimate Gift Collection generated interest, but no sales, this past holiday shopping season. A first for the Seattle-based retailer, the collection offered a portrait session with celebrity photographer Sam Jones ($50,000), a custom couch designed by Tory Burch ($15,000) and a personalized painting by Ruben Toledo ($200,000).

"It could have been the tough (economic) environment, or it could have been that customers were not looking to us for these types of items," said Nordstrom spokeswoman Brooke White. "We feel good that we tried something new, but we're not sure we'll do it again at this point." — AM

Less than two years after Dry Fly Distilling in Spokane revived the art of liquor distilling in Washington, it is hiring its first employee (Patrick Donovan as "distologist"), releasing the first bottle of whiskey ever (legally) produced for sale in Washington and launching Distillery School for people who want to learn how to start a distillery. Classes already are booked into March. Dry Fly charges $500 for two-day classes and $1,500 for a week. — MA

Retail Report appears Fridays. Melissa Allison covers the food and beverage industry. She can be reached at 206-464-3312 or mallison@seattletimes.com. Amy Martinez covers goods, services and online retail. She can be reached at 206-464-2923 or amartinez@seattletimes.com.

Copyright © 2009 The Seattle Times Company

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Retail Report is a look at the trends, issues and people who makeup the dynamic and versatile retail sector throughout the Puget Sound region. Every Friday with Melissa Allison and Amy Martinez. Send tips or comments to mallison@seattletimes.com or amartinez@seattletimes.com.

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