Hollister-Stier Laboratories LLC, the Spokane-based contract drug manufacturer, has added about 70 employees here over the last year, and has experienced double-digit revenue growth in its fiscal year that ends March 31, but likely will see smaller gains in its upcoming fiscal year, says CEO Marcelo Morales.
"Things still are looking promising," says Morales, who became the top executive at Hollister-Stier in October 2008. There's some uncertainty in the outlook, though, he says, because some of the company's current projects are ending, and it's unclear what jobs will replace them.
The level of activity at the company's sprawling plant at 3525 N. Regal, in northeast Spokane, "does ebb and flow somewhat and is project dependent," which makes forecasting difficult, particularly in a weak economy, he says. Longer term, however, due partly to added production capability and industry trends, he says, "We're pretty bullish on where we see the business is going to be."
Morales declines to talk specifically about Hollister-Stier revenues, but says they've been growing at around 15 percent to 20 percent annually for the last couple of years. The company's revenues were reported to have topped $60 million in 2006, the year before it was acquired by Indian pharmaceutical giant Jubilant Organosys Ltd. in a $122 million transaction.
Hollister-Stier currently employs about 620 people, about 80 of whom are temporary contract employees, and is working on the latest in a series of plant expansions and upgrades that collectively have cost in the tens of millions of dollars.
The current expansion project at Hollister-Stier involves installing two freeze-drier suites, each costing about $3.5 million. In the suites, the company converts sterile liquid drugs into a powdery substance.
Though the company still produces more liquid drugs than freeze-dried drugs, the latter are in increasingly high demand among clients, partly because they have a longer shelf life than drugs in liquid form, company executives have said.
Hollister-Stier also currently is expanding a unit that produces drugs for clinical trials, Morales says.
"Clinical trial (work) is not about speed. It's about flexibility and quick changeover," he says. "We were doing clinical trials before. We just weren't doing them to the scale and robustness" that will be possible once the expansion is completed later this year.
In a $42 million expansion that Hollister-Stier completed two years ago, it added roughly 25,000 square feet of office and laboratory space to the east end of its 135,000-square-foot facility and a roughly 30,000-square-foot addition behind the west end of the building.
The latter addition houses an $18 million high-speed sterile fill line that now allows the company to fill roughly 75 million vials a year, which is more than double its previous capacity.
Hollister-Stier then launched into another major project that involved demolishing the southern wall of the new west addition and constructing a 9,400-square-foot addition to house the two freeze-dryer units now being installed and tested. It had begun using its first freeze-dryer suite in 2003, then installed a second one in 2007 to handle growing demand.
Of the most recent installations, Morales says, "All of those pieces of equipment are coming on line now."
Those latest projects were made possible by an injection of capital from Jubilant, which Morales says also has acquired six other North American facilities over the past five years and now is working to integrate them to expand their global market presence.
"I would say we now are starting to compete in a much bigger pool," he says. "We see huge opportunities in Europe. We see huge opportunities in Asia."
Morales succeeded Anthony Bonanzino, who left Hollister-Stier in May 2008 to pursue other interests. Along with serving as CEO of Hollister-Stier, Morales is COO of Draxis Specialty Pharmaceuticals Inc., of Montreal, which is the largest of Jubilant's other North American holdings and the one most similar to Hollister-Stier in the services it provides. Jubilant acquired Draxis two years ago for $253 million (U.S.). Morales says he lives in Spokane, but travels to Montreal for business purposes regularly. He says the five smaller North American facilities that Jubilant owns all are more "science-oriented" operations, not involved in high-volume production.
A native of South America, Morales received a bachelor's degree in biochemistry from McMaster University, in Hamilton, Ontario, Canada, and a master's degree in business administration from the University of Toronto. Before joining Hollister-Stier and Draxis, he worked in Montreal as the Canadian industry segment leader for the life-sciences practice of the big Deloitte & Touche LLP accounting and consulting firm. In that capacity, he assisted clients in the pharmaceutical, biotech, and medical-device industries in areas such as market-entry strategies, business development, and operational efficiency. He also has published several papers on strategic and operational challenges facing the life-sciences industry globally.
Morales says Jubilant hired him specifically to help integrate its North American operations and build a relationship between the sister companies, and he adds that a study now under way is evaluating options for giving those operations a unified global brand. That rebranding effort won't involve things such as changing the names and logos of the affiliated entities, but rather is "more about organizing ourselves internally" to make the most of business-development opportunities, he says.
"We are very hungry," Morales says. "We definitely would like to maintain a strong rate of growth."
He says, "We're trying not to be distracted by what's going on economically," but the company nevertheless is feeling some impact.
Here, he says, that impact is most noticeable in Hollister-Stier's allergy unit, which is separate from its contract-manufacturing operations and accounts for less than 30 percent of its revenues.
Hollister-Stier Laboratories was formed in 1999 when a group of managers bought the plant from Bayer Corp. Under various owners, the plant has operated in Spokane since 1921.
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