Friday, October 17, 2008

Maine pharma startup targets generics for pets, vets

By Stephen DeSantis

The high cost of prescription drugs is affecting not only the pockets of patients everywhere, but pet owners as well. A Portland, Maine company called Putney Inc. is trying to address that very problem — by developing generic drugs for your pooch.

The startup pet pharma is traversing the road less traveled by global generics companies such as Ranbaxy Laboratories Ltd. and Teva Pharmaceuticals Ltd., both of which make generics for humans. Compared with the costs of developing them, the market for pet generics is too low for those high-volume manufacturers. Approval of generics happens to be species-specific — meaning you need to conduct clinical trials in each animal type to prove “therapeutic equivalence” — whether for people, dogs, cats or llamas.

Jean Hoffman is the founder and CEO the 2-year-old company and, of course, a major pet lover. But she doesn’t just bring a love for animals to the job — Hoffman spent her entire career in bulk-pharmaceutical manufacturing and generic drug-focused companies.

In 1990 Hoffman founded Newport Strategies LLC, a consulting firm to the generics industry, which was later bought by Thomson-Reuters Corp. in 2004. Soon after, she started another generics consulting firm called Q Street Advisors.

The idea of starting a generics development company for pets originally came to Hoffman when Dude, her adopted cat, developed hyperthyroidism, a common condition in older cats. The medication that Dude needed was not available in generic form and cost $30 a month. Later, the dosage doubled, as did the cost.

“The concept of needing generic products for pets just stuck in my mind. Not everyone can afford spending $60 a month for their pets,” Hoffman said.

To maximize the company’s development efforts, Hoffman used the analytical research tools and algorithms developed at Newport Strategies to identify drugs with the highest potential for profitability. According to Putney, consumers spend $41 billion per year on their pets or “companion animals” in products and services, which includes health care. The company cited data showing that consumers spent $3.5 billion in prescription drugs for their pets in 2007, and claims that more than 80 percent of drugs approved for pets still do not have generic versions.

“Some of the newer generation medications can cost owners hundred of dollars per month, causing financial distress to many families who choose to properly take care of their animals,” Whadzen Carrasquillo, a veterinarian at Jones Bridge Animal Hospital in Atlanta who is familiar with Hoffman’s work.

Putney is making generic versions of drugs that treat pain, infections, and dermatological conditions, as well as veterinarian products for anesthesia and sedation. Putney plans to launch its first approved generic pet drug this year and anticipates more than $150 million in annual revenue by 2012. That is a lot of kitty litter.