Local pharmaceutical hopes to develop, market new drugs

BRISTOL, Va. – Hundreds of new jobs could be on their way to Southwest Virginia, said Keith Latham, president and chief scientist of Innovative Technologies, a drug development company operating in the Bristol-Washington County Industrial Park.

It’s a bold statement for a man who’s been working in near obscurity for the past 14 years, but Latham said his business, which currently employs six people, is ready to make a big leap: from drug development to drug manufacturing.

All he needs, he said, is a little boost from investors to get the first drug to market.

“You don’t cash in until you get to market,” Latham said. “One drug to market would let us bootstrap right on to the next one.”

Latham said he’s confident that his company will be able to transform itself – and, ultimately, have a huge positive impact on the region by producing drugs here rather than selling the formulas to companies that will make them elsewhere.

Progress on a shoestring

Half a million dollars is what Latham said it’ll take to make that jump and make it as a pharmaceutical company. To the average person that might sound like a lot of money, but in the world of pharmaceuticals, $500,000 is a shoestring.

Kate Michael, communications director for the Pharmaceutical Research and Manufacturers of America, said the average cost of creating a new drug and getting it approved exceeds $1 billion.

According to a 2010 PhRMA industry profile, the pharmaceutical industry is faced with increasing costs and decreasing odds at successful drug development. “Since very few of the drugs that enter development ever achieve final marketing approval, much of the cost is related to unsuccessful attempts,” the report states.

In 2009, according to the report, 34 new drugs were approved; in the same year, the pharmaceutical industry spent an estimated $65.3 billion on research and development.

Latham said he has 38 drugs in the pipeline after 30 years of research. Four of them – drugs for thyroid disease, Parkinson’s, breast cancer and Alzheimer’s – are ready for clinical trials, he said; the others are in earlier stages of development.

The five drug technologies he has sold over the years have been enough to keep his company operating, he said, but this time he doesn’t want to sell off the intellectual property; he wants to market and manufacture the drugs himself.

“In the pharmaceutical business [as a whole], over and over again there were instances where something was discovered and then it was lost, and it had to be re-discovered,” he said. “That’s just a tragedy.”

His goal, he said, is to get the drugs to market as quickly as possible – not just because of the promise of reaping the financial fruits of his labor himself, but also to make sure his drugs get to the people who need them without any big drug companies standing in the way.

“They said, ‘We may buy that, but we’ll just put it on the shelf because it’s going to compete head-to-head with the drug we already have in the marketplace,’ ” Latham said of a company considering Thyromax, a drug he has developed to treat Thyroid disease.

“Management in big Pharma thinks like that,” he said, “so the agendas that they have are totally different than what we want to do. These are good drugs, they are new therapies, they are breakthrough therapies … these are drugs that can actually cure disease rather than paste over symptoms.”

Dreams and realities

To Latham, who has developed several of his drugs to treat conditions suffered by family members, the idea of keeping a drug off the shelf for the sake of corporate profit is a personal affront.

“The truth of the matter is we have in our skill set the ability to make a major difference, and not only regionally but in the U.S. and worldwide,” he said. “I have what may be the skill set to cure my wife of Parkinson’s Disease. That’s a real motivator.”

He said a desire to alleviate the tragedy of disease is what drives him – and he also sees the ability to contribute to the local economy in the process, here in the community where he chose to make his home.

“We have that skill set to go all the way to market, so why not do it here?” he said. “We have this vision to bring these drugs along and actually raise up a pharmaceutical company around here.”

Latham, a State College, Pa., native who earned his doctorate degree in pharmaceutical chemistry from the University of Southern California, worked as a professor of medicine at the Uniformed Services University in Bethesda, Md., for more than a decade before deciding to start a business.

“The trouble with academics is it’s a nice life and you can do great things, but all you get is a pat on the head from the department chairman for those great things,” he said.

So he sought out a place he wanted to live and where he could do his drug discovery work for profit.

Kenneth Reynolds, a county supervisor and member of the Virginia Tobacco Commission, said Latham got a small startup loan from the Mount Rogers Planning District Commission, which Reynolds was serving on at the time. He said the loan was paid back promptly once the business got off the ground.

Fourteen years later, Latham said he’s on the verge of incredible growth. Beginning clinical trials would grow the staff to 18, he said; once the company gets to the point of producing multiple drugs, that number would grow into the hundreds.

“The sky is really the limit,” he said. “We haven’t quit inventing.”

His son, Eric Latham, is the company’s marketing director.

Eric Latham said he and his father realized more than a year ago that, as Innovative Technologies had worked on drug development over the years, it had slowly built up the ability to handle other aspects of the business.

“We were no longer just pharmaceutical chemists,” Eric Latham said. “Now we know how to make tablets, now we know how to talk to FDA [U.S. Food and Drug Administration], we know how to do production. Well, we started saying … if we have all the tools, why don’t we just do it?”

A research economy

Innovative Technologies already has the nod from economic development folks in the region, in the form of $60,000 each from the Virginia Tobacco Commission and the Washington County Industrial Development Authority to buy a building to aid in its expansion.

State Sen. William Wampler, R-Bristol, a member of the tobacco commission and a strong proponent of forward-looking regional economic development strategies, said the grant is part of a larger effort: Put $100 million into research and development companies to help drive the region’s economic growth and recovery.

The focus is in two areas, Wampler said: energy and health.

“I think too many times we economic development officials spend time trying to recruit businesses from outside of the region when many times all you have to do is look across the street and you have lots of creative technologies and ideas that are ripe for development,” Wampler said.

“You’ve got a homegrown company that has a niche in the marketplace, and we saw an opportunity to help them, and we think that’s a good thing.”

Wampler said Innovative Technologies is just one of several companies that have received grants in the generally high-risk research and development field in hopes that they’ll be able to turn intellectual property into real economic impact.

Every company that makes the cut has been vetted, the senator said, with experts examining the finances and the science. He said Innovative Technologies has a strong balance sheet and, after years operating in the community, “a proven record.”

Ned Stevenson, deputy director of the tobacco commission, said the research money was budgeted a little more than a year ago.

“The commission believed that research and development was the ticket to ultimate revitalization of this area, ultimate job creation,” Stevenson said. “In other words, this search for new technologies and new enterprises that are yet unknown, with an emphasis on energy.”

Leap of faith

Keith Latham’s leap of faith is that $500,000 will be provided by investors – either one or two big investors or a lot of little guys putting up $500 or $1,000 – in hopes of a huge return on investment.

“It isn’t a donation,” Eric Latham said. “Actually, we can make somebody double their money pretty quickly.”

He said that money will pay for clinical trials on what his father believes to be the most promising drug, he said, and the sale of that drug will pay for trials on three others that are also ready to be brought through that process.

“Dad invested in this region,” Eric Latham said. “We are at the point where we have an opportunity for people here to invest in this company and this cause. We look at it as a cause, not just a company and not just a business, because together we can make a difference here.”

He said they could sell the rights to the drugs and make millions – but instead they’re holding out and stretching the shoestring a little thinner while they wait to cross a threshold they hope will change the region – and the world.

“The bottom line of all this is that we believe … that we have an extraordinary opportunity to raise up a major industry that’s not here currently,” Keith Latham said. “We can hire a lot of people, we can have a trickle-down effect that we believe can be an economic stimulus for the entire region.”

dmccown@bristolnews.com | (276) 791-0701