Biomedex Inc., a biotech company formed here last year, expects to begin this month producing trial batches of its first producta sterile alcohol disinfectant for clean roomsand also has landed an exclusive license to make and sell a new allergy testing product, which it hopes to begin producing this summer.
The company, launched by a group of former Bayer Corp. executives here and other local investors, also expects to complete this month its first round of private-placement financing, which should total $1 million, says Biomedex President George Coleman.
Coleman says the company will launch a second round of financing, the amount of which hasnt been determined, during the second quarter, and plans to use that capital as possible equity for a planned new facility on the West Plains. The company currently leases office and lab space at the Spokane Intercollegiate Research and Technology Institute east of downtown.
Coleman, through a separate venture called Pacific Northwest Technology Park, hopes to develop what he envisions as an eventual $200 million biomedical and biotechnology business park on a 58-acre site near the Boeing Co. plant along U.S. 2 west of Spokane. He has an option to buy that property from Avista Corp. Coleman says that separate venture either will raise its own funds to develop the park for Biomedex and other tenants, or will seek to entice a development company to take over the project. Biomedex could become a partner in the buildings it occupies there.
Coleman says he expects the first building at the planned park to be constructed later this year, and a second one three to six months after the first is done.
Biomedexs first product will be a specially processed alcohol disinfectant for use in clean rooms regulated by the U.S. Food and Drug Administration. Such disinfectants are used by workers in sterile environments, such as in the manufacturing of some pharmaceutical products.
Although there already are big national suppliers of the disinfectants, Biomedex expects to use its founders relationships in the pharmaceutical industry to land a piece of that market, says Robert Pomrenke, the companys director of sales and marketing.
Biomedex will produce the sterilized alcohol, which it will package in spray bottles under the Biomedex name, within SIRTIs biotech lab. Pomrenke says Biomedex inspected the labs filling room and asked SIRTI to make improvements to it to bring it up to the standards needed to produce such disinfectants there, which SIRTI has done.
John Carrier, director of logistics at Biomedex, says the small lab will give the company the capacity to produce about 200,000 16-ounce bottles of the disinfectant a year, though the company expects in its first year of manufacturing to make only about 50,000 bottles. The product will be sold for between $9 and $11 a bottle. Once the disinfectant is bottled, it will be shipped to a California company that will subject it to a required dose of gamma radiation before it is shipped to customers.
Coleman says Biomedex likely will continue using the SIRTI lab for a number of years, though it might eventually move production of that product to its planned new facility on the West Plains and use the SIRTI lab to launch similar products.
Part of my plan all along was to use this facility, says Coleman of the SIRTI lab. We can do something for Biomedex and have SIRTI benefit.
The company expects to hire two additional workers, giving it 13 employees, once full production begins in coming weeks. He says the new product is expected to provide Biomedex with some cash flow while it pursues a host of other initiatives.
The DermaPik II
One of those initiatives is the new licensing agreement, reached late last month, that will give Biomedex exclusive rights to manufacture, market, and distribute the patented DermaPik II Skin Test System, an allergy testing product invented by Dr. Isadore Pitesky, of Long Beach, Calif.
Such disposable products are used by allergy specialists to test for the causes of allergic reactions in patients. The DermaPik system consists of plastic trays in which allergens are placed, and sharp plastic pricking tools used to get the allergens under a patients skin.
The system was designed to allow allergens to be applied to the skin either one at time or in groups of 10, speeding up the often tedious process of allergy testing.
Biomedex showed a prototype of the product at the Academy of Asthma, Allergy & Immunology convention in San Diego recently, where it was well-received, says Pomrenke.
When you combine the features of the device, the DermaPik name, and the reputation of the marketing team of Biomedex, the response to our exhibit was a huge success, far exceeding our expectations, he says.
Next month, Biomedex expects to receive FDA approval to make and sell the product, and plans to begin manufacturing itusing a contract manufacturer in Californiain July or August, Pomrenke says.
He estimates that such products represent a $10 million market, and that two competitors control at least two thirds of the market.
He predicts conservatively that Biomedex will be able to grab 10 percent of the overall market quickly, giving it sales of $1 million in the first year of manufacturing.
Addition of the DermaPik product eventually will require Biomedex to hire administrative, sales, shipping, and warehouse personnel here, but the company initially will contract out many of those functions, so firm employment-growth numbers havent been determined yet, Pomrenke says
Coleman says many other products will follow, including some that Biomedex will brand itself and others under licensing agreements. Within the next two to three years, he says, the company should be producing 50 to 100 products, including about 40 different sanitizers similar to the alcohol disinfectant it will introduce this month.
There are a lot of little things out there (for Biomedex to produce), Coleman says.
Another area of business Biomedex hopes to get into is called stability testing, in which it would store samples of a pharmaceutical for another manufacturer, in controlled environments, then test the samples for potency over time. Such tests are used to help drug companies determine how long a product is viable, and thus what expiration date should be printed on the packaging.
Coleman says Biomedex could bring the testing equipment necessary for such a venture into the SIRTI lab, or wait until Biomedex has a home of its own on the West Plains to arrange for the controlled testing.
No decision has been made yet whether to pursue that line of business, though, he says.
Coleman says that Pacific Northwest Technology Parks current development plans call for the first, 30,000-square-foot building in the park to be occupied by Biomedex and possibly two other tenants.
He says that two other Spokane high-tech concerns, GenPrime Inc. and New Light Industries Ltd., are considering leasing space in the building.
That building, which is expected to be completed by year-end, is envisioned to be one of eight or nine buildings that eventually would be constructed at the park.
The second building, which Coleman says should be completed by mid-2001, would have about 45,000 square feet of space, and would be occupied entirely by Biomedex. It would include an assortment of biotech laboratories and product assembly areas, and portions of it will need to be approved by the FDA.
Coleman says Pacific Northwest Technology Park has hired two Wisconsin firms, an architectural firm and an engineering firm that both have had extensive involvement in biotechnology construction, to design the first two buildings and create a master plan for the park.
Coleman says hes already talking to other biotech manufacturers about launching operations in the proposed park, and also expects that Biomedex eventually will occupy more buildings there.
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