Spokane drug manufacturer Hollister-Stier Laboratories LLC, which has launched a roughly $30 million expansion of its facility here, says it has grown at a much faster pace this year than it projected. Moreover, it expects strong growth again next year, says President and CEO Anthony Bonanzino.


Were excited, Bonanzino says. We have a pretty strong plan for 2007, were still continuing to grow the business, we have a strong client portfolio, and were getting larger.


Hollister-Stier Laboratories hired 70 employees this year, giving it a total of 417, nearly double the number of people it employed six years ago, Bonanzino says.


We absolutely exceeded our projections for 2006, he says. Were not sure how many well hire in 2007 yet.


The companys sales this year are expected to end up jumping 22 percent from last year, which would fall in line with the average 20 percent to 25 percent growth it has seen in the past few years, Bonanzino says.


Theres no reason to think its going to slow down any time soon, he says.


Last week, HollisterStier Contract Manufacturing, a division of Hollister-Stier Laboratories, said it had signed an agreement with GeneraMedix Inc., of Liberty Corner, N.J., to develop a process for compounding and freeze-drying multiple generic drug products. The company declines to disclose specific details about the agreement.


That pact follows agreements earlier this year with three other drug makers: Prism Pharmaceuticals Inc., of King of Prussia, Pa.; Roxro Pharma LLC, of Menlo Park, Calif.; and MGI Pharma Inc., which is based near Minneapolis. HollisterStier currently is working with 32 companies and is always in discussions with others, Bonanzino says.


He says sales could grow at an even faster clip than the companys usual robust growth starting in 2008, once a planned new high-speed sterile fill line starts producing its first revenue-generating batches of drugs.


A walk around the companys campus in northeast Spokane confirms that Hollister-Stier indeed is growing. At the east end of its 135,000-square foot facility, at 3525 N. Regal, a $10 million expansion project that will add roughly 25,000 square feet of space is under way. That project, which will include laboratory and office space, is expected to be completed by late next August, Bonanzino says.


Meanwhile, the company recently bought 7 acres of land and installed a new road in preparation for a separate, $6 million addition thats under way behind the west end of the building. That project will add roughly 30,000 square feet of floor space for a $14 million high-speed sterile fill line the company ordered in May, he says.


That new line will allow Hollister-Stier to fill roughly 30 million vials a year, which would double its current capacity. Its current production line is running at full capacity, Bonanzino says. He expects the new line will start operating in the first quarter of 2008; the building project wont be completed until June, and it will take the remainder of next year to obtain U.S. Food and Drug Administration approval to operate the line.


Hollister-Stiers contract manufacturing division, which makes pharmaceuticals for other companies, now accounts for 60 percent of the companys sales, he says. The companys allergy division makes up the other 40 percent, and that divisions sales are increasing at 5 percent to 8 percent a year, he says.


The contract side continues to ramp up pretty dramatically, he says. The allergy division is a very mature business, very stable, and very healthy.


Hollister-Stier Laboratories LLC was formed in 1999 when a group of managers bought the plant from Bayer Corp. Shortly after buying the plant, which primarily had been used to make allergy products, the new company started gearing up its contract-manufacturing work. Under various owners, including founders Guy Hollister and Dr. Robert A. Stier, the plant has operated in Spokane since 1921.


New equipment


This past summer, Hollister-Stier installed a second freeze-dryer suite, formally called a lyophilization suite, to handle rising demand for contract manufacturing of freeze-dried drug products. The company ordered the $5 million piece of equipment back in July of 2005, but spent most of this year undergoing whats called a validation process, obtaining FDA approval to operate it, and making the suite operational. The company expects to start turning a profit with the equipment in the first quarter of next year, Bonanzino says.


The company began using its first freeze-dryer suite in 2003 and now is operating that machine at full capacity, he says. With the technology, the company moves a sterile liquid product into the freeze dryer and converts the liquid into a powdery substance.


Its a pretty sophisticated piece of equipment, Bonanzino says. Thats what makes this company attractive. Were not afraid to take on some very challenging processes.


Hollister-Stier completed this fall a $1 million compounding suite where it will manufacture an investigational therapeutic drug for MGI Pharma. The equipment necessary for that suite arrived last month, and the company expects to start manufacturing the drug early next year, Bonanzino says. It also bought specialized equipment to accommodate its new line of business with Roxro Pharma, which involves filling vials of a pain-management drug. Last April, the company also signed a letter of intent with Prism Pharmaceuticals to develop a process for compounding and filling vials of an acute-care cardiovascular drug.


Bonanzino says the contract manufacturing division has grown as more drug makers have begun outsourcing the manufacturing of their drugs. Time-consuming FDA approval processes mean Hollister-Stier must plan far in advance to meet future growth needs, which can be difficult, he says.


In the contract business, youre always at the whim of your clients, and theres a lot of variables that mean you could be pressed to the limit or slow down, he says. But, weve now established a base where we can more easily absorb fluctuations.


The company is financing its capital projects through its current equity partner, Windward Capital Partners, of New York, Bonanzino says. Its also borrowing money for the projects through Bank of America.


The companys facility is licensed and inspected by the FDA for both pharmaceutical and biological products.


Contact Emily Brandler at (509) 344-1265 or via e-mail at emilyb@spokanejournal.com.