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COMPANY NEWS; KEY PHARMACEUTICALS OWES ITS GROWTH TO TIMED DRUGS
Special to the New York Times
Published: July 5, 1982
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MIAMI, July 4— For Miami's Key Pharmaceuticals, a strategy of turning well-established drugs into new products by giving them more efficient ''delivery systems'' has, to date, paid off handsomely.
The traditional path to success in the ethical drug industry is to invent a product - preferably a new ''cure'' that can generate its own market -then produce and market it. But the process can be extremely time-consuming and expensive. Indeed, the many steps may take more than 10 years and cost more than $50 million.
In 1972, when Michael Jaharis and Dr. Phillip Frost took over Key, the Miami-based concern had just lost $700,000 on revenue of $1.5 million, and was in no position to bring out a new product. The two met at Miles Laboratories, where Mr. Jaharis had been a manager for 18 years and Dr. Frost, a dermatologist, was a consultant.
So the two partners improvised. They took an existing, familiar drug and found a new way to ''deliver'' it, or channel it, into the body. The reward for their ingenuity has been strong growth for Key ever since. Doubling of Revenue Seen
At the end of this year, Key expects to report its first $100 million in revenue, more than double last year's record revenue of $41.4 million. Last year, Key reported a profit of $5.9 million, up 88 percent from 1980.
Results for the first quarter this year were better than expected, according to Mr. Jaharis, Key's president. Net income increased 82 percent, to almost $2 million, or 12 cents a share, compared with $1.1 million, or 7 cents a share, in the 1981 period.
Analysts at Cowen & Company, an investment firm based in Boston, indicated in a report last month that Key's short-term prospects were good. ''Key Pharmaceuticals is well positioned to continue growing at a very dynamic rate well into the 1980's,'' it said.
Soon after Mr. Jaharis and Dr. Frost took over Key, they decided to try to revitalize a 50-year-old asthma medicine called theophylline. The drug was rarely used at the time because it was ineffective in small doses - and could be toxic in larger doses. But Key's researchers found a way to cope with the temperamental drug by devising a time-released pill that works for 12 hours. Aid From University Researchers
At the time, however, the company was so hard-pressed for funds that it could not afford the $25,000 or $30,000 needed to test the process. Fortunately, scientists at the University of Florida became interested in the drug's time-release technology, and agreed to test it. The scientists then published the results, which were subsequently presented to the American Academy of Allergy, a professional conference of allergists.
Instead of bombarding the market with advertisements, drug samples and a big sales force, none of which the company could afford, Key offered allergy specialists scientific data on the new product and samples. The company also developed a slide-rule calculator to assist doctors in determining the correct dosage they should prescribe for their patients.
The time-release system was so accurate that in 1977 the Food and Drug Administration gave the drug -which was now called Theo-Dur - a rare ''zero-order release.'' This indicated that the time-release system provided a constant supply of the drug, similar to that of intravenous delivery. Prescriptions Up 40 Percent
Last year, sales for the drug accounted for 78 percent of the company's total revenue and, so far this year, new prescriptions for Theo-Dur are up 40 percent. Key is also introducing Theo-Dur Sprinkle, which it describes as a powder that can be sprinkled on food for patients who are unable to swallow pills.
Key is also claiming success for another outgrowth of its timerelease technology. The product, called Nitro-Dur, is a round, adhesive bandage, about 4 inches in diameter, that is coated with nitroglycerin. It is applied to the chest for the treatment and prevention of angina pectoris. The drug enters the bloodstream through the skin and goes directly to the heart.
According to Mr. Jaharis, the direct application method gives Nitro-Dur an advantage over the nitroglycerin pill, which must first pass through the liver before its effects reach the heart. The effects of the pill last only about 12 minutes while Nitro-Dur's time-released relief is good for 24 hours, the company says. 10 Million Units Sold
According to figures released by Key, 181,000 new patients have been started on Nitro-Dur this year. From January to May, the company said, 10 million units were sold to doctors and hospitals.
Thus far, Key's Theo-Dur has not encountered serious competition. Ciba-Geigy's Brethine, the company's closest rival, has barely twothirds of Theo-Dur's sales, although Ciba beat Key to the marketplace with the nitroglycerin patch.
In trying other tacks to position itself for the future, Key has also signed technology-sharing agreements with several bigger pharmaceutical concerns, including Mitsubishi Chemical of Tokyo and American Home Products. The agreements give it access to new capital and better-equipped research facilities in exchange for working on timed-release systems for its partners' various products.
The company is also working to develop its first entirely new drug, a morphine antagonist that would reverse the effects of morphine in the human body. The drug would be used to treat overdoses and postoperative infections, Mr. Jaharis said, and would also have possible applications as an appetite suppressant.
''Key has done exceptionally well, not only in the hospitals, but in the retail sector as well,'' said Dr. Michael Smith of Pharmaceutical Data Services, a Phoenix-based market research firm. ''This is a company that has been able to use certain technology and carve a niche in the marketplace for itself.''
Read more: opkodd.proboards.com/thread/3084/course-billionairehood-never-run-smooth#ixzz4bzsQDwdd
COMPANY NEWS; KEY PHARMACEUTICALS OWES ITS GROWTH TO TIMED DRUGS
Special to the New York Times
Published: July 5, 1982
GOOGLE+
SHARE
REPRINTS
MIAMI, July 4— For Miami's Key Pharmaceuticals, a strategy of turning well-established drugs into new products by giving them more efficient ''delivery systems'' has, to date, paid off handsomely.
The traditional path to success in the ethical drug industry is to invent a product - preferably a new ''cure'' that can generate its own market -then produce and market it. But the process can be extremely time-consuming and expensive. Indeed, the many steps may take more than 10 years and cost more than $50 million.
In 1972, when Michael Jaharis and Dr. Phillip Frost took over Key, the Miami-based concern had just lost $700,000 on revenue of $1.5 million, and was in no position to bring out a new product. The two met at Miles Laboratories, where Mr. Jaharis had been a manager for 18 years and Dr. Frost, a dermatologist, was a consultant.
So the two partners improvised. They took an existing, familiar drug and found a new way to ''deliver'' it, or channel it, into the body. The reward for their ingenuity has been strong growth for Key ever since. Doubling of Revenue Seen
At the end of this year, Key expects to report its first $100 million in revenue, more than double last year's record revenue of $41.4 million. Last year, Key reported a profit of $5.9 million, up 88 percent from 1980.
Results for the first quarter this year were better than expected, according to Mr. Jaharis, Key's president. Net income increased 82 percent, to almost $2 million, or 12 cents a share, compared with $1.1 million, or 7 cents a share, in the 1981 period.
Analysts at Cowen & Company, an investment firm based in Boston, indicated in a report last month that Key's short-term prospects were good. ''Key Pharmaceuticals is well positioned to continue growing at a very dynamic rate well into the 1980's,'' it said.
Soon after Mr. Jaharis and Dr. Frost took over Key, they decided to try to revitalize a 50-year-old asthma medicine called theophylline. The drug was rarely used at the time because it was ineffective in small doses - and could be toxic in larger doses. But Key's researchers found a way to cope with the temperamental drug by devising a time-released pill that works for 12 hours. Aid From University Researchers
At the time, however, the company was so hard-pressed for funds that it could not afford the $25,000 or $30,000 needed to test the process. Fortunately, scientists at the University of Florida became interested in the drug's time-release technology, and agreed to test it. The scientists then published the results, which were subsequently presented to the American Academy of Allergy, a professional conference of allergists.
Instead of bombarding the market with advertisements, drug samples and a big sales force, none of which the company could afford, Key offered allergy specialists scientific data on the new product and samples. The company also developed a slide-rule calculator to assist doctors in determining the correct dosage they should prescribe for their patients.
The time-release system was so accurate that in 1977 the Food and Drug Administration gave the drug -which was now called Theo-Dur - a rare ''zero-order release.'' This indicated that the time-release system provided a constant supply of the drug, similar to that of intravenous delivery. Prescriptions Up 40 Percent
Last year, sales for the drug accounted for 78 percent of the company's total revenue and, so far this year, new prescriptions for Theo-Dur are up 40 percent. Key is also introducing Theo-Dur Sprinkle, which it describes as a powder that can be sprinkled on food for patients who are unable to swallow pills.
Key is also claiming success for another outgrowth of its timerelease technology. The product, called Nitro-Dur, is a round, adhesive bandage, about 4 inches in diameter, that is coated with nitroglycerin. It is applied to the chest for the treatment and prevention of angina pectoris. The drug enters the bloodstream through the skin and goes directly to the heart.
According to Mr. Jaharis, the direct application method gives Nitro-Dur an advantage over the nitroglycerin pill, which must first pass through the liver before its effects reach the heart. The effects of the pill last only about 12 minutes while Nitro-Dur's time-released relief is good for 24 hours, the company says. 10 Million Units Sold
According to figures released by Key, 181,000 new patients have been started on Nitro-Dur this year. From January to May, the company said, 10 million units were sold to doctors and hospitals.
Thus far, Key's Theo-Dur has not encountered serious competition. Ciba-Geigy's Brethine, the company's closest rival, has barely twothirds of Theo-Dur's sales, although Ciba beat Key to the marketplace with the nitroglycerin patch.
In trying other tacks to position itself for the future, Key has also signed technology-sharing agreements with several bigger pharmaceutical concerns, including Mitsubishi Chemical of Tokyo and American Home Products. The agreements give it access to new capital and better-equipped research facilities in exchange for working on timed-release systems for its partners' various products.
The company is also working to develop its first entirely new drug, a morphine antagonist that would reverse the effects of morphine in the human body. The drug would be used to treat overdoses and postoperative infections, Mr. Jaharis said, and would also have possible applications as an appetite suppressant.
''Key has done exceptionally well, not only in the hospitals, but in the retail sector as well,'' said Dr. Michael Smith of Pharmaceutical Data Services, a Phoenix-based market research firm. ''This is a company that has been able to use certain technology and carve a niche in the marketplace for itself.''
Read more: opkodd.proboards.com/thread/3084/course-billionairehood-never-run-smooth#ixzz4bzsQDwdd