CEO Interview: Viropro, Inc. - Claude Gingras

• On 5:13 pm EDT, Tuesday October 20, 2009

67 WALL STREET, New York - October 20, 2009 - The Wall Street Transcript has just published its Biotechnology Report offering a timely review of the sector to serious investors and industry executives. This 70-page feature contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.

Topics covered: Heightened M&A Activity - Trend Toward Orphan Disease Drug Development - Generic Drug Competition - Current Length Of FDA Approval Process - Ownership Ego Preventing Shareholder Returns - IPO And Secondary Offering Window Opening - Big Pharma R&D Pipeline - Decreased Clinical Development Risk - Impact Of Health Care Reform - Convergence Of Large-Cap Biotech And Pharmaceutical Companies - Easier Credit For Small Cap Biotech Companies - Developments In Cancer Chemotherapeutics - Gene Delivery Technology

Companies include: ADVENTRX (ANX); Abbott Labs (ABT); Advaxis (ADVX); Amedisys (AMED); Amgen (AMGN); Amylin Pharmaceuticals (AMLN); Antares Pharma (AIS); BioDelivery Sciences (BDSI); Biogen Idec (BIIB); Biomarin (BMRN); Boston Scientific (BSX); Bristol Myers (BMY); CVS Caremark (CVS); Celgene (CELG); Cerner (CRN); Cerus (CERS); Coke (KO); CombiMatrix (CBMX); Coventry Health Care (CVH); DARA (DARA); Eisai (ESALY); Eli Lilly (LLY); GenVec (GNVC); Gilead (GILD); GlaxoSmithKline (GSK); Health Management Associates (HMA); Human Genome Sciences (HGSI); Inspire Pharmaceuticals (ISPH); Intellect Neurosciences (ILNS.OB); InterMune (ITMN); International Stem Cell (ISCO.OB); Javelin Pharmaceuticals (JAV); Johnson & Johnson (JNJ); Keryx Biopharmaceuticals (KERX); Kraft (KFT); MAP Pharmaceuticals (MAPP); Medco (MHS); Merck (MRK); Merit Medical (MMSI); Novartis (NVS); Novelos (NVLT.OB); Novo Nordisk (NVO); Nutrisystem (NTRI); OSI Pharmaceutical (OSIP); Orexigen (OREX); Pepsi (PEP); Pfizer (PFE); Rite Aid (RAD); Schering-Plough (SGP); Takeda (TKPHF); Teva Pharmaceuticals (TEVA); Viropro (VPRO.PK); Walgreens (WAG); Wyeth (WYE); XOMA (XOMA); ZIOPHARM (ZIOP).

In the following brief excerpt from the 70-page report, Claude Gingras, CEO of Viropro, Inc., discusses the outlook for the sector and for investors.

TWST: What is your business plan?

Mr. Gingras: Quite simply, we produce a recipe book of how to do the generic version of a product. We deliver the clients a recipe book, the first clones of the first proteins, to help them start and make the process involved into the generic version of the drug. What we do is we identify which drug should be produced as a biogeneric, and that's what we offer. That's actually quite simple and quite straightforward. Our laboratory is located in the Biotech Research Institute of the Canadian National Research Council in Montreal, and we are using their facilities and some of their technologies to help us produce a very efficient level of proteins that will evolve into the biogeneric drugs. We look at the potential drug, and we evolve that, and we describe the process, and that's what we offer the clients.

TWST: You also recently announced that you are working on a new business model.

Mr. Gingras: Exactly. Since we've been taken over by Biologics Process Development and the fact that the rituximab project is nearing completion on our side, we discovered revenues that were complementary. We were complementary in the sense that we work on recombining proteins, we work on expression systems, we work on protein purification, and these are items that we can do at Biologics, since we can do them on a different scale. We deducted that we could evolve our symbiosis even more and, maybe with some further acquisitions, offer true outsourcing facility for pharmaceutical and biopharmaceutical companies. That's what we decided to do. You call that outsourcing, we call it CRAMS - Contractual Research Agreement and Manufacturing Services. We call it CRAMS because it's not going to be something that necessarily is a turnkey solution to a new drug for larger companies. Larger bio and pharma companies actually can be a lot of other things. For instance, BPD is still working on ongoing research, very limited research, for some companies. We will be either doing very specific research for clients, or we can evolve that into a longer solution, a complete step-by-step to market facility by production.

TWST: What do you need to do to implement this?

Mr. Gingras: What we need to do now is we want to identify - and we have targeted - some companies that can work on the other part of the scale with a range of services that we will offer the companies or potential clients. So we've identified some of these companies that we want to bring in with us as a separate unit. All these companies will be separate units. They can work on their individual level or they can work on a project with us. For instance, if we were to do the sequencing part of the product, when it comes time to do purification, we could submit that over to Biologics. And if we so wanted to do increased purification, we could do that with a third partner that we have identified, and finally go to a manufacturing plant that we are looking to purchase and that would actually produce the end product. That's how we were looking at doing this venture. We've identified sound potential companies; we have identified a GMP plant, and to do so well, of course, we're looking to raise some money. We are investigating how to raise the money.

TWST: Under the new business model, you will continue to do what you're doing but will also add additional options?

Mr. Gingras: Exactly. We are still looking at producing other biogeneric drugs also. Our researchers are investigating one drug now that they plan on discussing to they determine if there is something interesting to be done. Because when we decide to do a biogeneric drug, it's because either its license is about to expire and there is a big potential, or it has a license that hasn't been registered worldwide, so there are markets where it hasn't been registered and that can be interesting. But we are mostly looking at drugs that are blockbusters. Rituximab is a very good example since it sold above $3 billion, probably more like $5 billion so far. So we'd be looking at drugs of the same potential.

TWST: Your research and development is a bit different than that of other biotechs because some of it is more due diligence on the market side of the drug and drug sales.

Mr. Gingras: We have a development process that we haven't mentioned that's very efficient. For instance, we know in rituximab that we need to evolve from the anti-cd20 - what we call the protein. This is what we need, and we know that. The way to produce anti-cd20 efficiently is our own recipe, and that is where some research has been carried out - how to produce and how to entice a reaction very efficiently. And we do have an expression system that we consider better than others, meaning that we can produce more of the product as well as at a lower cost. That's really important for generic drugs. You want to have a generic drug that costs less than the original version of course.

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