Biomedex Inc., a young Spokane biotech company, has launched a subsidiary here that will do pharmaceutical compounding for both consumers and health-care providers.


The subsidiary, called FirstPharma, will be located within Biomedexs operations in the Spokane Intercollegiate Research and Technology Institute and initially will employ just a handful of people, though the jobs will be well-paying, says Ken Schawel, FirstPharmas vice president of operations.


A compounding pharmacy fills specialty prescription orders for customers that cant find a prescription drug in the form they need it, such as a liquid rather than a tablet, or an emulsion rather than a capsule. Big drug makers often will choose not to provide drugs in certain forms because the demand isnt high enough for mass production.


Compounding pharmacies take up that niche, and are rewarded with higher margins on low volume, Schawel says.


Though there are other compounding pharmacies in operation, FirstPharma will bring two aspects to the market that it believes will make it unique in the Pacific Northwest, Schawel says.


First, it will have access to a clean room in which sterile drug filling can take place, something rarely seen in compounding pharmacies, which typically fill just non-sterile prescriptions, he says. Second, because of Biomedexs expertise in validating pharmaceutical manufacturing proceduresa service it offers to companies nationwideit can meet strict guidelines that most compounding pharmacies tend to ignore and havent been aggressively enforced, he contends.


Weve looked, and cant find anybody with this combination of clinical expertise and aseptic filling, Schawel says.


As health-care providers that do their own compounding begin to worry about regulations and the potential liability of not having all the safeguards and procedures in place, they might find FirstPharma as an attractive alternative to doing it themselves, Schawel says. That might become more the case as medicines become more expensive and it thus becomes more important to have equipment and procedures in place with high tolerances so compounds arent wasted, he says.


He adds that eventually, some other compounding facilities might be closed down by the government for not having followed such procedures.


Biomedex has remodeled some of its space in SIRTI for a secure pharmacy area, and is setting up the facilitys lab and clean room for compounding. It has hired a pharmacist from Colorado who had worked for another compounding operation, and expects in coming weeks to hire one more pharmacist and three to four pharmacy technicians.


Schawel says pay for compounding pharmacists and technicians typically is higher than that for those who work in traditional pharmacy settings. With two pharmacists and three to four technicians, FirstPharma should be able to produce around $2.5 million in revenue a year once its fully operational, he says. He predicts that the company easily will hit its budget figure of $450,000 in revenue for its first 12 months, and says its expected to be profitable in six months.


We have plans to make this a viable, stand-alone entity, he says.


The new venture could start compounding non-sterile drugs in two to three weeks, and expects to begin sterile filling within six months.


Were taking this very conservatively, Schawel says. Theres still validation to be done and systems to be put in place.


FirstPharma already has begun marketing itself to physicians in the Spokane area, letting them know that there will be a local supplier for specialty prescriptions not available at a traditional pharmacy. Its hope is that doctors will begin referring their patients to FirstPharma for such prescriptions. It also will market to hospitals and clinics that currently might be doing their own compounding, as well as to veterinarians, Schawel says.


Schawel says he expects that many patients will buy such specialty drugs via fax machine, using a signed prescription from their physician, and then receive the drugs via mail. Others may come to Biomedexs quarters at SIRTI to pick them up.


He says compounded prescriptions can cost up to 50 percent more than their standard-issue counterparts, and that although insurers typically must cover their use, theyll likely try to avoid paying them. Its no secret that insurance companies dont like compounded drugs, but if you get them the right paperwork, theyll pay, Schawel says.


Later, FirstPharma might pursue filling specialized cosmetics and nutritional aids.


The company has secured a pharmacy license from the state of Washington and is seeking approval from the U.S. Drug Enforcement Agency to handle controlled substances, he says.


Schawel says one of the big reasons the new venture will be profitable soon is because it is sharing space and some personnel with its parent, Biomedex. That company has several other ventures in the biotech field, but primarily helps pharmaceutical companies and other biotech concerns validate their production processes and sterilize equipment. Biomedex has a host of sophisticated equipment needed for sterile filling and for sterilization of tools and devices used in filling, and is having to buy only minimal equipment for the compounding.


Biomedex has been using, and has upgraded, SIRTIs lab space almost since its was formed in 1999. With the addition of FirstPharma, the company now plans to add another small clean room at SIRTI that can be used for other Biomedex purposes as demand for lab space from FirstPharma increases. Biomedex President George Coleman says that new lab space might end up being portable, so that when the companys planned new facility on the West Plains is built, Biomedex could take the lab with it. He says hes still exploring with SIRTI how that clean-room project might come about.


Pharmaceutical compounding is one of several biotech niches that Biomedex has gone after. In addition to the contract cleaning and validation it does for drug companies and other biotech concerns, Biomedex has been marketing, and hopes to manufacture, testing products for both the allergy and dental arenas. It also is looking into the possibility of importing and exporting health-care products to and from China, Coleman says.


In addition, Biomedex may be close to finalizing a pact with a U.S. company in which it would assemble and distribute a dental implant, he says. Coleman declines to elaborate on the product or the company Biomedex is negotiating with, but says the product could be in production here this fall and bring in about $50,000 to $150,000 a month in additional revenue for Biomedex, and would require hiring three to four more employees.


Biomedex currently employs about 35 people and typically has annual revenues of between $1 million and $2 million. The company for some time has been trying to raise between $20 million and $25 million in private capital to build a planned 60,000-square-foot plant in the Pacific Northwest Technology Park, which Coleman spearheaded. The park now is being developed by Granite Investments LLC, which is headed by prominent Spokane developer Dick Vandervert, and currently includes a hotel and bank branch.


I think were getting very close again, says Coleman of the fund-raising efforts. He adds that he still hopes to break ground on the project this year.