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Mike Lester, BS ’79, parlayed a pharmacy degree
into a string of multimillion-dollar companies.
Now he’s helping UT pharmacy students see
there’s more than one prescription for success.

Mike Lester

By Avrel Seale

The sun was setting that summer evening in 1975 as the Missouri-Pacific train slowly crossed Town Lake heading back to San Antonio from its daily run to Taylor. Aboard, an 18-year-old brakeman, who had graduated from high school early and spent a year on the rails considering his next move, stared down at the water. Mike Lester saw the flotilla of young people that was Austin’s Aqua Fest, a river parade in full swing. And he thought, “I’ve got to get out of this engine … and go to school.”

As soon as the train arrived in San Antonio, Lester quit and quickly enrolled at UT to study pharmacy. He had grown up in Pleasanton, Texas, where his father worked in the oil fields and his mother for the regional power company. “My dad had always pointed to the local pharmacist and told me I should consider it.” He remembers his words: “They do well, and they get to work for themselves. You ought to think about that.”

If he had built a career as a pharmacist, he indeed would have done well for himself, but it was following the entrepreneurial advice he received that propelled him into a career that would allow him eventually to give more than $10 million to his alma mater.

Though he wouldn’t change his small-town upbringing, Lester concedes it was “not the best education in the world. I remember at UT the calculus professor holding up the book on the first day. I could barely spell ‘calculus,’ and the students next to me from Alamo Heights were saying, ‘Hey, that’s the book we had in high school!’ ” But he proved a quick study, and with the support of Associate Dean Bill Sheffield and Professor Salomon Stavchansky, who is still on the faculty, he succeeded.

After graduation in 1979, Lester landed a job as a staff pharmacist at Methodist Hospital in Dallas. He learned the business side of pharmacy, but says, “I very quickly realized there was no place to practice what I was taught at that time. There was no clinical role unless you went to an academic center setting. So I decided to seek a road less traveled and combine my business interest with my pharmacy education.”

“My degree was the
cornerstone that allowed me
to start all these companies.”

Just three years after graduation, Lester, 26, and fellow pharmacist and friend Terry McCord launched an inpatient hospital pharmacy management company, Preferred Hospital Pharmacies. The youthful partners ended up with facilities in 10 hospitals across three states. When they sold it in 1988, the pattern was set that would escalate Lester into the business stratosphere.

His second business was an infusion therapy company that trained HIV/AIDS patients to self-administer intravenous medicine at home or in outpatient facilities. The sale of that company in 1996 was very successful, but his passion to build companies that both helped people and were profitable drove him forward.

Lester’s wife, Kay, also started as a practicing pharmacist, but after a couple of years she entered the medical device sales field. She worked for two startup companies for 20 years before following her passion to go back to school for a master’s degree in theology and biblical studies.

By the late ’90s, the Lesters were restless for change and moved to the Seattle area, where he started networking and raising money for his next project. By 1998 he had raised $10 million to start Radiant Research, which conducted human clinical trials for pharmaceutical companies. He sold it in 2006 with another successful outcome.

He then created the outpatient wound care company Accelecare Wound Centers and grew it to 150 clinics in 37 states. Lester sold the company in 2015. He has since raised $250 million in private equity to start a behavioral health company focused on evidence-based treatment of patients suffering from addiction, substance abuse, and eating disorders in a variety of settings including residential treatment centers, outpatient clinics, and aftercare settings.

How does he choose his next endeavor? For this one, he and his team sat down with a whiteboard and looked at three areas: pharmacy services (whose margins he concluded were too low), physical therapy (in which he says there were not enough new developments), and behavioral health. The new company, LifeStance Health, will begin with adolescent mental health. The other two divisions of the company will be adolescent alcohol and drug treatment and eating disorders.

Graduate pharmacy students

Pharmaceutical Entrepreneurship is a graduate-level course on the fine points of developing and commercializing a product within a startup biotech company. At the end of the semester, the students pitch their product and company before a team of entrepreneurs and investors.

 

Lester sees a lack of medically driven, evidence-based treatment in this field, which tends to focus on the addiction instead of the cause. “If we focus on the underlying cause of the addiction, such as depression, anxiety, bipolarism, et cetera, the patient will have a much better chance of recovery, particularly in adolescents.”

So why has the health care mogul chosen to support UT Pharmacy with a $10 million gift in his will? “While I haven’t practiced pharmacy, except for the first few years out of school, it was my degree in pharmacy that was the cornerstone that allowed me to start all these companies. My pharmacy education gave me clinical credibility with health care and investment professionals. This degree has afforded me to make great connections and given me amazing opportunities to venture into the journey of business and pharmacy.”

With the help of Dean Lynn Crismon, Lester is setting up a program for students to learn from his success — to create pharmaceutical entrepreneurs. UT already has the No. 3 pharmacy program in the nation, and with Lester’s help, it could well go even higher. “The Wharton, Harvard, and Stanford MBA schools really focus their students on the entrepreneurial side of the world,” Lester says, and he wants UT Austin to be in that company.

“I’d love to be a part of it,” he says of the program. In fact, he’s already helping five UT students brainstorm their business ideas. “A lot of times you get so passionate about something, you need somebody to say, ‘That might not be the best idea in the world, but it could sure be a means to an end, a stepping stone in your entrepreneurial career to get to the next level.’ ”

Most of all, Lester wants students to know that a degree in pharmacy can lead in many directions. “Though working in a retail pharmacy is a great job and could be perfect for many people, there are many other opportunities out there for people with degrees in pharmacy. I don’t want students to feel pigeonholed as retail or hospital pharmacists. The opportunities are vast with this education.”

Make a Gift to UT

Click here to make a gift to the College of Pharmacy.

A pharmacy entrepreneurial scholars program has been created for UT students showing the skill and desire to mix business with pharmacy. This program did not start with just Lester’s desire to succeed in business and pharmacy but began with his father, Kenneth Kelton Lester, who encouraged Mike all those years ago in a small South Texas town to consider pharmacy and work for himself. Accordingly, this first scholars program of its kind for pharmacy is named the K.K. Lester Entrepreneurial Scholars Program, in honor of Lester’s father.

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