NexMed Patent

Medarex Partners

Money for Integra

Money for Cytogen

Xenna Marketing

Late News: Orchid and Enamelon

Corrections or additions?

These articles by Barbara Fox were prepared for the October 18,

2000 edition of U.S. 1 Newspaper. All rights reserved.

Lavipharm Expands, Alters Course

When Lavipharm Laboratories cut the ribbon on its

American

headquarters on Princeton-Hightstown Road earlier this month (October

5) it also announced it had bought a French company and was going

in a new direction — changing the business plan so it moves away

from patch-type drug delivery. It has 50 employees at this location

now and expects to grow to 65 by the end of the year.

"There are 130 different drug delivery companies, and there is

not enough business for all to do patches," says Zsolt Lavotha,

president and CEO of the Greek-owned company. Instead of focusing

on transdermal and epidermal patches, Lavipharm is now doing particle

and formulation design, with a focus on molecule transport, and just

bought Separex S.A., a French company that is a leader in particle

engineering.

"Separex’ technology is applicable to many areas, but the main

thing for us will be pharmaceutical particle engineering," says

Lavotha. "In the past it was used for, for instance,

decaffeinating

coffee. Now it is sort of the `in thing’ in pharmaceuticals."

Drugs with specially designed particles may be able to be absorbed

better or be taken in lower doses with the same effect, resulting

in an improved side effect profile.

Separex, a 30-person, 15-year-old firm located northeast of Paris,

is known for its supercritical fluids (SCF) technology; it has the

know-how to design the particulates and the equipment to produce them.

"Once we design the particles we have the ability to manufacture

them ourselves, or we can transfer the technology to a big pharma.

I know of no other company in the world that can manufacture big

quantities

with this process," says Lavotha.

Lavipharm will, nevertheless, continue to work in the

area of conventional drug delivery, a currently popular choice among

pharmaceutical companies because of its shorter R&D cycle. "The

good news in our type of business," Lavotha says, "is that

we are not starting from scratch. Toxicity concerns are not an issue.

We have to make sure that after we take the particles and put them

in some kind of delivery system, that they have the same concentration

as the original molecules, but there is much less burden of truth.

It is less costly, too."

Although Lavipharm made its reputation on a type of drug delivery

system that works through the skin — transdermal and epidermal

patches — patches will now constitute only about 15 to 20 percent

of the business. Now Lavipharm will move into a field called

"molecule

transport," a broader term that can encompass working with genes.

"The gene researchers are extremely clever in coming up with

solutions

but may not have figured out how to deliver them," Lavotha says.

Lavipharm has 60 to 70 patents. "On the product side we have

patented

the nitroglycerine patch and the antiblemish patch. On the particle

engineering side, we are just starting to file the patents." It

has just sold a license for the anti-acne patch technology to Conopco,

a wholly owned subsidiary of Unilever United States.

Lavipharm had paid about $4 million for the former Mettler Toledo

property at Route 571 and the One Mile Road extension and has made

extensive improvements worth from $2.5 to $3 million. The property

includes 27 acres plus 50,000 square feet of buildings: the 27,000

two-story office with canteen is now a state-of-the-art laboratory

for patch and molecular biology technology, plus offices for

Lavipharm’s

worldwide corporate R&D, business development, and marketing and sales

teams outside of Greece. "Our warehouse has been completely redone

and will house pharmaceutical raw material, some materials for

different

drug delivery systems, and equipment for clinical manufacturing

supplies,"

Lavotha says. A machine shop remains as-is but may eventually be used

for some limited pharmaceutical manufacturing.

Lavotha himself did most of the interior design for the offices, but

Sweetwater Construction was the general contractor for this site and

did the fitout. Lavipharm’s accounting firm is Deloitte Touche, and

its web page is being redone by Philadelphia-based Dolan Sweeney.

An in-house corporate lawyer has just been hired from Warner Lambert,

but for patent law, Lavipharm turns to Dechert Price & Rhoads, and

corporate attorneys are Sherman & Sterling in New York City. Merrill

Lynch is Lavipharm’s advisor for acquisitions and structuring deals.

The location was chosen partly because of access to scientific talent

at Princeton University, and also because it is close to partners

and potential partners. "Our new state-of-the-art facility is

a major link in the chain of value we deliver to our partners —

pharmaceutical leaders like Novartis, Endo, Knoll and cosmetic leaders

like L’Oreal and Chattem," says Lavotha.

Sales for the global company last year were $250 million. The founder

and CEO, Athanse Lavidas, had established the company for the Greek

market in Athens in 1944. In the mid 1970s, Lavipharm built a plant

in Greece that permitted the company to include manufacturing in its

total marketing package. In the early 1980s, Lavipharm began doing

research and development on its own drug delivery systems, which

included

transdermal and epidermal products. In December, 1996, Lavipharm

acquired Scherpa Transdermals, a private drug delivery development

firm located in Piscataway, intended to be Lavipharm’s speedy entry

into the U.S. market, and the United States office opened in 1998

and 1999. Jeffrey Boily, former president and COO, was replaced by

Lavotha in January, 1999.

As a result of a global upbringing, Zsolt Lavotha speaks French,

Finnish,

Swedish, Hungarian, English, and some German. Born in 1950 in Hungary,

he grew up in Budapest, where his father was a language professor

and his brother a musical prodigy. In fact, he called on his brother,

now a cellist with the Royal Philharmonic in Stockholm, to provide

music, along with a pianist from Greece, at the opening. After leaving

Hungary his family lived in Finland and Sweden, where he received

his bachelor’s and master’s degrees and began to work for Pfizer,

moving to New York City in 1984. Now he lives in Paoli on

Philadelphia’s

Main Line and is married to an Argentine woman who has a meetings

and logistics management company. They have a son at Babson College.

Lavipharm is publicly held in Greece, and Lavotha aims to go public

in this country in the next 12 to 18 months. "This is a very

interesting

industry," says Lavotha. "It is exciting when you can solve

problems. We just started to work with novel cancer molecules, and

it will be very rewarding if we can solve a serious problem."

— Barbara Fox

Lavipharm Laboratories Inc., 69

Princeton-Hightstown

Road, East Windsor 08520. Zsolt E. Lavotha, president and CEO.

609-448-3001;

fax, 609-371-9174. Home page: www.lavipharm.com

Top Of Page
NexMed Patent

NexMed Inc. (NEXM), 350 Corporate Boulevard,

Robbinsville

08691. Joseph Mo, chairman, CEO, and president. 609-208-9688; fax,

609-208-1868. Home page: www.nexmed.com

Several Princeton area companies besides Lavipharm are working on

epidermal and transdermal applications, and one of them, Nexmed, has

received a patent on technology that promotes rapid penetration of

active drug ingredients through the skin. This NexACT patent, the

fifth for NexMed, underpins two of the company’s lead products —

topical creams for sexual dysfunction in men and women. The products

use NexACT technology to deliver alprostadil, a drug known for

treating

erectile dysfunction.

NexMed stock was listed under the Nasdaq National Market as NEXM on

October 6. Before it was trading on Nasdaq Small Cap market.

Top Of Page
Medarex Partners

Medarex (MEDX), 707 State Road, Princeton Gateway,

Suite 206, Princeton 08540. Donald L. Drakeman, president.

609-430-2880;

fax, 609-430-2850. Home page: www.medarex.com

In an unusual example of crossing paths, Medarex has made a $5 million

equity investment in Oxford GlycoSciences Plc, a company based in

the United Kingdom that figures largely in the career of Dale Pfost,

the CEO of another Princeton-based biotech, Orchid BioSciences Inc.

on College Road. Medarex and Oxford GlycoSciences (OGS) will partner

in the discovery, development, and commercialization of fully human

antibodies as therapeutics.

Medarex does therapeutic product manufacturing, particularly human

and monoclonal antibodies. It has an operations laboratory and office

in Annandale and two of its founders, Donald and Lisa Drakeman, were

recently admitted to the Biotech Hall of Fame.

Oxford GlycoSciences does carbohydrate engineering and glycobiology,

and during eight years there Pfost did a company turn-around and

raised

$6 million in private financing. Pfost left the UK three years ago

to take the top post at Orchid (U.S. 1, January 29, 1997).

OGS, now a public company, will be expected to tap its proteomics

platform to provide up to 30 protein targets for cancer or other life

threatening diseases. Using these targets, Medarex can work with its

HuMAb-Mouse and TC Mouse antibody discovery and development systems

to move potential products from the laboratory to the market.

Top Of Page
Money for Integra

Integra LifeSciences Corporation (IART), 105 Morgan

Lane, Box 688, Plainsboro 08536. Stuart M. Essig, president/CEO.

609-275-0500;

fax, 609-799-3297. Home page: www.integra-ls.com (warning, this site

does not allow a return).

More than $16 million will come to the coffers of Integra LifeSciences

if and when a German company pays its just-imposed fine for patent

infringement. The amount is roughly what it would have cost the German

company, Merck KGaA (no relation to New Jersey’s Merck), for licensing

fees, plus interest. To Integra, this money — when and if it

finally

arrives, after the appeals are over — would be equal to its

revenues

for the past quarter.

The research for this patent — on a class of compounds that affect

particular proteins on the surface of cells — was done in the

late 1980s in La Jolla, California, at the Burnham Institute. The

research was licensed to Telios Pharmaceuticals, later bought by

Integra.

The German company had been negotiating with Telios to license the

technology but instead went on its own to develop something similar

and took the results, a cancer drug, as far as advanced clinical

drugs.

So Integra and Burnham filed suit in 1996 to protect their patent.

Integra’s basic technology is tissue and organ replacements, including

artificial skin, cartilage, and nerve conduits.

Top Of Page
Money for Cytogen

Cytogen Corporation (CYTO), 600 College Road East,

CN 5308, Princeton 08543-5308. H. Joseph Reiser, president and CEO.

609-987-8200; fax, 609-750-8130. Home page: www.cytogen.com

Just after buying 900,000 shares of Cytogen stock for $6 million,

a Manhattan-based mutual fund announced it will buy an additional

$70 million of stock at a later time, as yet not decided. The price

to be paid by Acqua Wellington North American Equities Fund will be

just below the market rate on the day of sale. The $70 million will,

in effect, serve as an equity credit line.

Earlier this year Cytogen’s secondary public stock offering was

withdrawn

when the stock price went down. Also, a plan to buy Boston-based

Advanced

Magnetics was changed. Instead, Cytogen bought two of the company’s

products.

Cytogen markets and develops products for targeted delivery of

diagnostic

and therapeutic substances directly to sites of disease and has about

65 employees on College Road.

Top Of Page
Xenna Marketing

Xenna Corporation, 33 Witherspoon Street, Suite

200, Princeton 08542. Carol J. Buck, CEO. 609-921-1101; fax,

609-921-2517.

Home page: www.xenna.com

Xenna has completed a double-blind, placebo-controlled clinical study

of NonyX Gel, which attacks nail fungus by removing the habitat where

the fungus thrives. "We consider NonyX Gel to work as an

exfoliating

agent rather than a traditional anti-fungal medication," says

Carol J. Buck, CEO. it works by penetrating the nail plate and

dissolving

or softening keratin debris deposits where the fungus is harbored.

Bruce Bitcover, the Lawrenceville-based podiatrist who conducted

the study, says it is an "excellent alternative" to use for

diabetics, immuno-compromised patients, those on corticosteroids,

and patients with peripheral vascular disease.

Xenna is marketing the product on its website or by mail order for

a price of about $20 for a three-to-four month supply. From two to

five bottles would be needed for treatment. Buck is pursuing licensing

opportunities. The firm also markets shampoos and itch relief

products.

Top Of Page
Late News: Orchid and Enamelon

The company headed by Dale Pfost has canceled a secondary stock

offering, due to market indications. www.orchidbio.com

Enamelon, the innovative toothpaste manufacturer, has received an

infusion of cash from Church & Dwight. www.enamelon.com


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