-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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Survival Medicine by Mukul Pandya In an industry riddled with casualties, Ramesh Pandey is a survivor
Ramesh S. Pandey, chief executive officer of Xechem, a biotechnology company in New Brunswick, N.J., has an office where these days an unnatural state of disorder prevails. On a Monday in late November, his desk was piled with scientific and business documents, some of which lay in small heaps on the floor. Product bottles competed for space with company literature on tables and window sills. Pandey, a soft-spoken but energetic man, grinned as he apologized for the mess. "My office has never been like this," he said, "But every other day I have been running around."
Pandey has had good reasons to run around, because in some ways, his office symbolizes Xechem's problems. Though the company seemed to be headed for success when Pandey spun it off six years ago from LyphoMed, a generic drug company in Chicago, during the past year it has fallen upon hard times. Xechem's difficulties are typical of the double whammy that confronts most start-up biotech firms -- high R&D costs combined with low or non-existent revenues. At one point last year, Xechem was burning cash at the rate of more than $200,000 a month. As the company's accumulated losses exceeded $18 million in December 1995, some observers wondered whether the company would survive.
It will -- at least for now -- because Pandey's energetic running around has paid off. On Nov 19, Xechem announced that a group controlled by David Blech, a well-known but controversial investor in the biotechnology industry, will invest $5.5 million in the company over the next nine months. As a result of the deal, Blech and his associates will replace Pandey as Xechem's controlling shareholders, with a stake of more than 70 percent. Pandey, however, will remain the CEO as well as the second-largest shareholder. He is delighted at the deal because the capital infusion will allow Xechem to develop products that he believes could become big winners in the future. "With Blech's investment and expertise, our future is very bright," he says. "In the next three to five years, we could have sales of $30 million to $50 million."
Pandey's optimism is based largely on a plant-based product called paclitaxel, a drug used in the treatment of ovarian and breast cancer. Xechem cannot sell paclitaxel until December 1997, because Bristol-Myers Squibb, the New York City-based pharmaceutical giant, has exclusive rights to its sale. After that, however, Pandey believes that Xechem's version of paclitaxel --which Bristol-Myers Squibb sells under the brand name Taxol -- could command a large market. Pandey says initial tests have been encouraging, and now that Xechem has the capital, it will be able to move the product along the Federal Drug Administration's approval process.
Xechem also has other irons in the fire. Through a subsidiary called Xetapharm, Pandey wants to introduce natural products from India and China in the United States. The company has agreements with the International Institute of Ayurveda in Coimbatore and with Beijing Medical University. "We have some work going on at the International Institute of Ayurveda to make plant extracts," he says. "Though quality control on ayurvedic herbal medicines is a big problem, there is a great need for these products."
If Pandey has been able to roll with the punches in the volatile field of biotechnology, the reason is that he has been in the pharmaceutical industry for a long time. A native of the Rani Khet region of Nainital in Uttar Pradesh, Pandey completed his Ph.D. at the National Chemical Laboratory in Pune before coming to the United States in 1967. After doing three years of post-doctoral research at the University of Chicago in Urbana, Pandey went to India briefly but then returned to the United States in 1972.
His expertise was in antibiotics and anti-cancer drugs development, and he joined the National Cancer Institute in Frederick, Md., which was doing research in these fields. By the late 1970s, however, he was tired of government bureaucracy. He was eager to get into business, possibly with other Indians who were as frustrated as he.
"I met a lot of people, but these damn people would say, 'Write a business plan, do this, or do that,'" he says. "The business world sees things differently than scientists."
Pandey's break came in 1982, when he met John Kapoor, an Indian businessman who ran LyphoMed in Chicago. LyphoMed sought out drugs that had gone or were about to go off patent and made generic versions of these products. The two men had dinner together, and Pandey told him about his desire to get into business. LyphoMed was going public at the time, and Kapoor was busy, but he told Pandey to keep in touch.
In 1983, Pandey joined Abbott Laboratories, but just nine months later, he got a call from Kapoor. LyphoMed, Kapoor said, was keen to develop a generic version of vancomycin, an anti-bacterial drug. Though Pandey had never produced the drug before, he told Kapoor that he was confident he could do it. He added, though, that the investment might be as high as $8 million to $10 million. Kapoor agreed, so Pandey resigned from Abbott. Pandey, Kapoor and John Curry, an American investor, in 1984 formed Xechem as a joint venture.
Raising $10 million to set up a vancomycin plant, however, proved to be daunting. A major hurdle to getting the funding was Pandey's lack of experience in developing the product. "When I asked LyphoMed to build the facility, the company said, 'What if you can't do it, all our money will go down,'" Pandey says.
As an alternative, LyphoMed promised to support Pandey while he researched the product. Pandey then approached Rutgers University's Waksman Institute of Microbiology, which was interested in the project. The institute named him a visiting professor, and Pandey used its facilities and researchers to direct a LyphoMed-funded project. On March 17, 1987, LyphoMed received FDA approval for vancomycin. "Once we got the approval, the money we spent on developing the product was recovered in two weeks," says Pandey.
Armed with this success, Pandey asked LyphoMed again to build the vancomycin plant. This time, he was told it would take too long -- it would be better to farm out the job out to a company that had the infrastructure. Pandey agreed, so in 1987 LyphoMed began to produce vancomycin with help from Denmark's Dumex and Japan's Fujisawa. The same year, Pandey renegotiated his deal with LyphoMed, which was doing very well. Xechem became a fully-owned subsidiary of LyphoMed. Pandey's salary shot up, and he also received options in LyphoMed stock.
Life changed for Pandey in 1990 when Kapoor and his associates decided to sell LyphoMed to Fujisawa in a $1 billion deal. "Kapoor, who owned about 25 percent of LyphoMed, made millions of dollars, as did many other people," recalls Pandey. "I also made some money because I owned LyphoMed stock." The biggest change, however, was that Fujisawa was not interested in Xechem, so Pandey bought the company for $125,000. After initially considering keeping Xechem in Chicago, Pandey decided to move the company to New Jersey.
New Jersey attracted Pandey for two reasons. As the state that has the headquarters of companies like Merck, Johnson & Johnson and American Home Products, among others, he considered it the "pharmaceutical capital of the world." More importantly, however, his stint at Rutgers had showed him that being near a university can offer invaluable support systems -- libraries, laboratories, research assistants -- to a fledgling start-up biotech firm. So Pandey set up shop in a 10,000 sq. ft. facility in New Brunswick near Rutgers. The company continued to work on anti-cancer drugs, with support from Small Business Innovation Research grants from the National Aeronautics and Space Administration and the National Cancer Institute.
Young biotech companies are voracious consumers of capital, and Xechem was no exception. Since the company's products had not received FDA approvals, it had no sales revenues and soon the grant money ran out. Xechem was then approached by a group of California investors who were interested in paclitaxel's potential, and who put Pandey in touch with Kensington West, a New York City investment bank. Xechem went public in April 1994, raising $4.5 million. This capital infusion allowed Pandey to hire more people and expand Xechem's facilities to 25,000 sq. ft. The company's stock also rose from $5 to $13. Forbes magazine listed Xechem as one of the best new issues, and the company was profiled on CBS.
Unfortunately for Pandey and Xechem, problems cropped up. First, an agreement that Xechem had struck with a marketing firm in Canada unraveled because of disagreements over cost-sharing, and the stock took a hit on Wall Street. It now trades for less than $1. Another key problem was that some of the scientists from big companies whom Pandey had hired were unable to adjust to a small-company environment. Getting drug approvals also proved to be a more time consuming and complex process than Pandey had expected. As cash got tighter, Pandey had to lay off people. Xechem once had 34 employees, of whom 18 had Ph.Ds Today the company is down to 24 people.
Pandey now wants to move Xechem forward again with Blech's capital. One of his main priorities will be to rebuild the company's scientific staff. "We will refocus the company," he says. "Until now, we have done only technology development. We will focus on abbreviated new drug applications for drugs going off patent. The company will start making money in one and a half or two years."
Pandey says he has learned several lessons from his experience. "Our ambitions were very high, and certain things did not work out," he says. "If I had to think again, maybe I would have done things slightly differently. People don't want to touch this business with a thousand-foot pole because it is a high-risk business. It is very important to have the necessary financing right from the beginning. You can't just trust people who say, 'Don't worry, we'll get you the financing.' In December, we hardly had any money. I now understand how companies get into trouble. It doesn't have to be millions; companies can get into trouble for a very small amount of money."
While Xechem is not yet successful, it is undoubtedly a survivor. "People told me six months ago that I should close my shop, because I could not survive," says Pandey. "But the bottom line is, I survived. I have an investor who believes in my company and my products. That's the big thing. People have many ideas. But do they have the guts to make them happen? That is what makes the difference."
posted
gap already, we'll see what the pull back is
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Added another 250k .035. Have 1 Million Total. Lookin Good Today. Finally Broke Resitences...into Blue Skies.
Posts: 604 | Registered: Aug 2005
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posted
I picked the close right again. Gettin pretty good at this!
Member
Member Rated: posted June 22, 2006 15:31 -------------------------------------------------------------------------------- 238,365,489 .0523 and if I picked that right I'm def. playin the lottery!
-------------------- only 16,808,731 off on the volume lol
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
I set my target for Jul 6, I'm riding free anyway so let it roll.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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quote:Originally posted by Peaser01: lol, so what will it be today? .07ish?
.092 and it's a Friday
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
the day I'm having it could close at .018 up yest. down today overall but Monday is lookin better.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Might make for a good flip don't see my .092 hittin thats for sure (it was a thought). probably finish at 236,756,426 vol. a lil more realistic. make that .058
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
Actual .059 with 248,868,269 still pretty close in my book
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
took 80% gain home today, waiting for another dip to get back in. coulda had a larger gain yest. Dems da grapes
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 7800 | From: Virginia | Registered: May 2006
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posted
XKEM - Good close at .0719. Hope we cross .09 tomorrow. BTW, when is the drug launch PR coming up.. is it before July 8th?
Posts: 27 | Registered: Jun 2006
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posted
I'll be googling African news sites for some kind of Nicosan news on/around July 4th. That's Sickle-cell aneamia day, so if news were to come out, that may be the day.
According to Stephen Burg, Nicosan launch is scheduled for July 6th, so we'll see what/if any news comes.
This is all speculation on my part of course.
I am doubting that we see an official company PR, as the company doesn't issue too many, but I would expect one from any company that is launching a drug.
Contact: Xechem International, Inc. Stephen Burg, 707-426-8855
-------------------- Buy Low. Sell High. Posts: 10750 | From: The Land Of The Giants | Registered: Feb 2005
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