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Dr. Sterling K. Ainsworth has been writing a book on the saga of his biotechnology firm, NaPro BioTherapeutics Inc., for 10 years.
The story, as told to a ghostwriter, includes his small firm's struggle against pharmaceutical powerhouse Bristol-Myers; Bristol's legal monopoly of a blockbuster drug; a growing billion-dollar market; courts and cancer and dying trees.
"If it doesn't happen," — it being the chance for NaPro to sell its main product in the United States — "no one will ever see the book," Ainsworth says.
Ainsworth is the founder, vice-chairman, president and chief scientific officer of Boulder-based NaPro, whose main product is paclitaxel, an anti-cancer drug that in the costs $2,000 per treatment. The yew tree-derived drug fights lung, breast and ovarian cancer, and the AIDS-related Kaposi sarcoma. It also battles about a dozen more cancers, for which approval is pending.
Paclitaxel is not patented. Bristol had 5-year exclusivity for the drug until 1997 under a law that helps drugs go to market, said Gordon H. Link, Jr., NaPro vice president and chief financial officer.
But Bristol does have patents covering its administration, and has sued companies seeking Federal Drug Administration approval for the drug based on those patents.
It has been a heated, and complex fight, Link said.
Bristol, with more than $20 billion in 1999 sales, started in the paclitaxel business with Boulder-based Hauser Inc., which supplied the company with the drug. Once the drug started selling — it is now Bristol's second best-seller — Bristol established its own operation in Ireland to make the drug, and dumped Hauser.
In March of this year, a federal judge invalidated a key point of the patents protecting Bristol's Taxol — its branded paclitaxel. That ruling is still under appeal, while other related patents are beginning to expire — also under appeal.
If the patents are reinstated, they could last for 17 to 20 years, Link said.
"We don't know what will happen," Link said. The company can do its studies and necessary clinical trials, so that if and when the patents fall, they can enter the market quickly, Link said.
Ainsworth founded NaPro in 1990. After living in China for years — working with the U.S. and Chinese governments as an immunopathologist — he found himself enthralled with natural products.
"We had gotten so far away from it," he said. "We were mostly based in synthetics, and here we had God's little treasure chest of medicinals."
Back in the States in 1987, Ainsworth began to study three compounds that fought cancer — and settled on paclitaxel.
He's still a bit boastful that he hit upon a winner. Paclitaxel is a proven scourge to cancer, a $1.5 billion seller in 1999 alone. Experts say sales will soar to $2.1 billion in 2003.
But to get in on the heavy action, NaPro needs the U.S., European and Japanese markets.
The company expanded its agreement with Australia's F.H. Faulding & Co. pharmaceutical company in June, encompassing about 75 countries where NaPro's paclitaxel can be sold.
Three-dimensional pegs on a colorful map at NaPro's Gunbarrel headquarters show where the drug is already sold through Faulding: the Middle East, the Philippines, Southeast Asia.
But without the three big markets, NaPro won't see the blockbuster results that paclitaxel brings. All the world combined represents only 10 percent of the drug's market. The big three — including Bristol-only America — make up the other 90 percent.
In addition to the Faulding expansion, NaPro had other good news in June — a $4 million investment by Abbott Laboratories for the development and marketing of NaPro's paclitaxel in North America.
That agreement — a 20-year exclusive arrangement — has already approached the $19 million mark to NaPro.
"The past year at NaPro has been very exciting," said NaPro Chairman and Chief Executive Leonard P. Shaykin.
In addition to the significant Abbott partnership, Shaykin said the company is working to get a marketing partner for Europe and Japan. The company is also working on approval for those markets.
The company made $7.6 million in revenues in 1999; research alone cost $12 million. The net loss for the year: $9 million, or 50 cents a share.
The bad news was the loss was greater than the 22-cents-per-share loss in 1998. The good news is sales had increased from $4.95 million in 1998.
Last week, the company's stock soared as news that Bristol's dominance might be challenged more effectively in court.
"Investors saw an improved chance that the patent will be lifted," Link said.
It was up more than 20 percent Thursday — to $9.50, just $1 short of the 52-week high. The 52-week low was $2. The year's stock performance, excepting a big dip in April, has been a general upward slope since the beginning of 1998.
Proctor Baker Jr., of Bayhead, N.J., came to Boulder on Wednesday for the NaPro shareholders meeting. Baker's family has about 100,000 shares, his friend — a Brooklyn oncologist — has about 100,000 more.
Baker assured his friend, whom he met on an active Yahoo message board for NaPro, that he'd attend the meeting for both.
"He's the one who really explained what NaPro can do," Baker said.
And that, despite years of losses and a seemingly impenetrable U.S. market, is what makes Baker an active, and positive, shareholder.
Baker's mother, father, sister and brother died from cancer.
"You get really into it," he said. "If it works, we're going to make a lot of money. But what's great is we're helping to fight cancer."
Five million yew trees dot NaPro plantations in Canada and the United States. Yew trees thrive in wet weather with chilly winters — and rather famously died when companies started harvesting their bark. Plantations protect the wild trees.
Ainsworth said his company has been a leader in protecting the environment while producing cancer fighters.
If the U.S. courts judge in favor of opening the market, he foresees his 90-employee firm becoming a market leader as well.
"We will be formidable competition for Bristol," Ainsworth said.
If the market does open, Ainsworth doesn't think it will be a paclitaxel free-for-all. He sees Bristol and Abbott-NaPro as clear market dominators.
Those fighting hardest against Bristol in court, a group of generic drugmakers including Miami-based Ivax Corp., probably won't dent the market as much, Ainsworth said.
"They will have a minor effect on the market," he said.
For all the strife, Ainsworth doesn't express animosity toward Bristol.
"They are a good company that enjoys a very good position in the market. They use the legal system, fiercely, to protect their monopoly," Ainsworth said. "If we were in their position, we'd probably do the same thing."
That's not to say he thinks the monopoly is good.
"It does affect consumers; it doesn't give them a choice. With competition, the price will come down, and more people will have it," he said.
Contact Erika Stutzman at stutzmane@thedailycamera.com or (303) 473-1354.
September 18, 2000 |
