Drug-Delivery Tech Firms Find Bright Spot in the Economy

Making medication in strips that dissolve in the mouth, so patients don’t have to swallow pills, and turning fast-acting tablets into time-release doses, are among the ideas breeding success for drug companies, their investors and the pharmaceutical companies they team with.

Warren-based MonoSol Rx, which packages medicine in thin, dissolvable films, last month closed on $20 million in funding from a group of private-equity financiers including the Ed Bass Group, the Halifax Group and CNF Investments. Revenues for MonoSol Rx, which is not profitable, were nearly $5 million for 2007, and are already at $6 million through the first six months of this year, says Mark Schobel, chief executive officer.

Patients such as children, the elderly and those suffering from pain or cancer are more likely to take their medicine as mouth-dissolving strips than as pills or tablets, Schobel says. Also, in some cases, orally-dissolving drugs are absorbed more quickly and effectively than other forms of medication. MonoSol Rx’s technology is being used in seven over-the-counter products that treat the common cold, says Schobel.

Tracy Lefteroff, global managing partner in the Private Equity & Venture Capital Practice of PricewaterhouseCoopers, says, “There’s an abundance of capital at the venture capital level for biotechnology and pharmaceutical companies despite all the turmoil in the public and credit markets.

“New Jersey has historically been a very good spot for life-sciences investing because of the people and ideas spinning out from the major pharmaceutical companies that are there,” he says.

Over in South Brunswick, Tris Pharma recently finished expanding its 45,000-square-foot facility to 60,000 square feet, and plans to grow its work force from 65 to as many as 80 employees by the end of the year. The drug-delivery technology firm, which makes controlled-release versions of immediate-release drugs and technologies that prevent addiction to pain killers, said the expansion provides space for more equipment, a new warehouse and packaging operations. Tris Pharma partners with companies including Alpharma Inc. of Bridgewater, and Next Wave Pharmaceuticals of Vernon Hills, Ill.

A big source of demand for new drug-delivery technologies is generic drug makers that want to stand out among the pack, says Michael Lerner, an attorney at Lowenstein Sandler. While a generic drug maker can win a period of marketing exclusivity if it successfully challenges the patent of a brand-name drug, for a company without that protection it’s “difficult to generate sales unless it [the generic drug] has better efficacy or is easier to administer” than other generic drugs, he says.

In June, MonoSol Rx signed a licensing deal with Par Pharmaceutical Companies, Inc., a generic drug maker based in Woodcliff Lake. Under the deal, Par got the exclusive rights in the United States to commercialize the thin-film version of ondansetron, a prescription drug to prevent nausea and vomiting in cancer patients receiving chemotherapy and radiation treatments. GlaxoSmithKline sells the brand-name version of ondansetron, called Zofran, as injections and tablets.

The deal with Par Pharmaceutical calls for MonoSol Rx to manufacture, package and supply dissolvable ondansetron while Par handles marketing and sales, says Schobel. MonoSol Rx will get up to $23.5 million if certain regulatory and sales goals are met, as well as royalties on sales and other payments, he says. MonoSol and Par Pharmaceutical plan to bring thin-film ondansetron to the U.S. Food and Drug Administration for approval this month.

If thin-film ondansetron hits the market, it would be MonoSol Rx’s first prescription drug. In August, the company said it finished a pilot program to develop a thin-film version of generic Lexapro, a prescription antidepressant made by Missouri-based Forest Pharmaceuticals, Inc.

E-mail to tgaudio@njbiz.com