Sunday, August 05, 2001

Duramed chairman weathered battles to position company

Merger with Barr will put it on the map

By Cliff Peale
The Cincinnati Enquirer

        The long fight to sell conjugated estrogens to millions of women took much out of Duramed Pharmaceuticals Inc., but it was worth it, company chairman E. Thomas Arington said.

        What started with a simple study in 1987 will culminate with Duramed's pending merger with Barr Laboratories. The deal, sheduled to close this fall, will put the Pleasant Ridge company into the big time, he said.

        In between were years of regulatory battles, financial losses and images of a company fighting for survival.

        “We felt from the beginning that dealing with a real technical substance gave our company the best chance for real long-term success,” Mr. Arington said in a recent interview at the Duramed plant in Pleasant Ridge. “I think that's proven to be correct.”

        Mr. Arington's persistence was the constant during Duramed's tumultuous decade and perhaps the most important factor keeping the company alive.

        At a ratio of one Barr share for every 3.9032 Duramed shares, the deal values Duramed at about $22 a share — well above its stock price for the past several years.

        Mr. Arington said the combination of Barr and Duramed will continue the focus on women's health-care products, with Duramed's plant and scientists playing a key part.

        Mr. Arington will be head of a business development committee on the Barr board of directors.

        He said the decade-long battle for conjugated estrogens, now called Cenestin, started only months after he took over, in October 1987, an embattled Duramed that was recalling products because of packaging problems.

        He saw a study that showed a synthetic version of Premarin, one of the nation's most popular drugs partly made from mare urine, could be possible.

        “It was that study that gave us the blueprint to redesign the second-generation product that is Cenestin,” he said.

        That product became Duramed's mantra, with promises to add hundreds of millions of dollars in sales. After two applications to the U.S. Food and Drug Administration, Duramed's application was rejected in May 1997 under withering pressure from American Home Products, the powerful maker of Premarin. Many doubted Duramed could survive.

        “We had the game plan laid out,” Mr. Arington said. “We basically had to restart the engine.”

        Duramed subsequently got approval for conjugated estrogens under the Cenestin brand. It has dropped an appeal to the FDA and is pursuing a civil lawsuit against American Home Products. But Mr. Arington emphasized that the Cenestin program gave Duramed multiple advantages.

        Duramed's research produced a product stability and a time-release formula that will help it develop a whole family of women's health-care products, he said.

        “The world believed we were only after one product, and that was hard to dispel,” he said. “We haven't fully utilized (the technology) because of resources. Our technology moved well ahead of our bank account.”

        That should change with the Barr merger. The New York company is on the verge of marketing a generic version of Eli Lilly's Prozac, and it should have the funds to develop the entire family of products that Mr. Arington envisioned all along, he said.

        “We never wavered here,” he said. “We finally started putting numbers on the board, which we knew would happen.”
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