Article on Generic/Innovator Drug Manufacturer Durmed Phar. (DRMD)....
Duramed thrives on new drugs
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Focuses on women's health
By Tim Bonfield
The Cincinnati Enquirer
The whirring tablet-press at the Duramed Pharmaceuticals plant in Pleasant Ridge spins so fast it can pump out more than 160,000 pills an hour. With growing sales of the hormone replacement drug Cenestin, and other products in the pipeline, Duramed executives predict their tablet press will be getting a lot busier in 2001.
After several years of struggle, executives at Duramed Pharmaceuticals say 2001 could be a break- through year. Even as the economy appears to be slowing on many fronts, Duramed plans to hire more workers and buy more equipment, including installing a high-tech automated packaging system by August.
“We didn't build all this capacity just to make Cenestin,” said E. Thomas Arington, Duramed's chairman and chief executive. “We already have five hormone products on the market. We have four we hope will be approved this year and 19 more in development.”
After several years of fits and starts, Duramed appears closer than ever to realizing its goal of becoming a force in women's health products, from birth control pills to various hormone replacement therapies.
The company told investors last month that it could post a small profit for 2000.
Three straight profitable quarters have reversed a string of losses that have punished its stock.
Cenestin sales remain far short of its goal of $100 million a year, but are picking up. Total weekly prescriptions were up 40 percent in December compared to three months before. New weekly prescriptions were up 55 percent in the same period, the company reports.
In 1999, Cenestin posted about $3.8 million in sales compared to more than $1 billion for competitor Premarin. In 2000, Cenestin sales tripled through the first nine months, but the company now reports Cenestin sales along with its Apri birth control pill and three other hormone products.
As a group, Duramed's five hormone products grew from $2.2 million in sales through nine months of 1999 to $28.7 million through nine months of 2000, the most recent figures available.
New directions
Improving sales reflect a company that has changed directions in several ways since forming 19 years ago.
Duramed was incorporated in 1982. It started production in Long Island, N.Y., in 1983, primarily making generic cough, cold and pain relief products.
In addition to Cenestin, the company produces more than 30 products including birth control pills, cancer drugs, blood pressure pills, pain relievers and a variety of cough and cold remedies.
Duramed moved to Cincinnati in 1985 and soon set its sights on the growing market for women's health products, especially hormone replacement drugs.
The company retooled in 1995 as it waged a prolonged effort to win FDA approval for Cenestin. The drug was originally envisioned as a generic equivalent to Premarin, the market leader. However, fierce opposition from Wyeth-Ayerst, maker of Premarin, blocked approval of the generic drug.
Duramed responded by seeking new-product approval for Cenestin, which was granted in March 1999. All the while, Duramed has been quietly building its production capacity.
What's inside
Inside a low building partly visible from the Norwood Lateral, production rooms are separated by air locks while temperature and humidity are carefully controlled.
Drug making at Duramed starts with mechanical arms lifting kegs of ingredients into a two-story-tall mixing machine. Products move on to a second blending room, then to a tablet press, a pill-coating machine and a packaging line.
A surprising aspect of pharmaceutical production is the smallness of the process.
A container of ingredients about the size of a beer keg can produce 800,000 to 4 million pills. In the tablet press room, a machine that can spit out 160,000 pills an hour isn't much bigger around than a home refrigerator.
At many points in the process, computer controls have replaced human operators, resulting in more precisely made medication and less risk of contamination, said Allen Marko, vice president of production.
To further minimize contamination from human contact, workers in “hot zones” of exposed materials wear full environmental suits. In other areas, workers don't wear clean suits but use glove boxes to run tests and make adjustments to avoid touching ingredients.
“We're a small company. But some of the top companies in the pharmaceutical business don't have this kind of technology,” Mr. Marko said.
The environmental controls are so strict that it required about three months of planning to set up a tour Jan. 26 for about 50 doctors, company staff and journalists, Mr. Marko said. Plant managers worked the production schedule so that the tour would coincide with a maintenance and cleaning day.
Duramed has room to expand production within its building and has land that could allow a two-story, 160,000-square-foot expansion that could triple production capability.
No date on building such an expansion has been set, but the company is gearing up for production increases.
Come August, Duramed plans to install a new packaging line that will transform an operation that takes 20 people to complete about 15 packages a minute into one that requires eight people to produce 140 packages a minute. Along the way, the updated equipment will allow better tracking of lot numbers, bar codes and product labels.
The increased automation means that some people likely will be moved from packaging to other parts of the plant. But the overall increase in production will require hiring more people, Mr. Arington said.
Seeing results
Only now are the results of investing millions into all that new equipment starting to show, Mr. Arington said.
Since 1985, Duramed has grown from employing about 200 people making products that generated $20 million a year in revenue to employing about 375 people making products producing closer to $80 million a year.
In September, Duramed continued its bitter battle with Wyeth-Ayerst by filing an antitrust lawsuit in U.S. District Court in Cincinnati. Duramed accuses Wyeth-Ayerst of illegally coercing managed health-care organizations to enter into exclusive contracts for Premarin. A Wyeth-Ayerst spokesman declined to discuss the allegation, saying the company does not comment on pending litigation.
But Mr. Arington said the company's main focus is building its women's health business.
“You can't fully get past your history, but we don't have people here looking back and talking about multimillion-dollar losses,” Mr. Arington said. “We believe we can now move ahead and become a major player in the woman's health care business.”
New hormone-replacer called better
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