This page aims turns the spotlight on the practices and challenges being faced on a daily basis by various TMTA member. It feature a different TMTA member company every month or so. Members are encouraged to comb industry news and report back to us on any media coverage featuring TMTA members. We will either quote such material directly or use it as inspiration for stories on our members.

The right chemistry:

Pharmax team creates breakthrough

formulas for world markets

 Pharmax Limited’s production plant is located in Toronto.  It was there that company principals Gary Hodgins and Martha Wilson were interviewed on July 26, 2008.

Who are Gary Hodgins and Martha Wilson?
We both grew up in Toronto; both went to the University of Toronto and both earned Bachelor of Science degrees, although we hardly knew each other at the time.  Gary went on to do post-graduate work in radiation biology and subsequently completed a master’s program in Business Administration. 

Did a career in science follow?
Actually, no, neither of us pursued a career in science after we earned our degrees.  Martha went on to raise three children and teach for the Toronto Catholic District School Board.  Gary became a senior executive in the building and development industry, and later became a consultant in company restructuring and re-organization.  In the late 1990s, one of the assignments that Gary’s consulting group, Technology, Management & Funding Inc. (TMF), undertook was the re-organization of Pharmax, after the founder passed away unexpectedly.

So who actually created Pharmax?
Stanley Cowan created Pharmax.  He was a renowned pharmaceutical chemist and inventor who originated Pharmax back in the early 70s.  Dr. Cowan invented the first chemistry to compete with Johnson & Johnson’s breakthrough product, Cidex^®.  The catch was that Dr. Cowan was a better chemist than a marketer, so his new chemistry languished in relative oblivion until the mid-90s.  Some believe his early death was due to frustration because of the industry’s lack of acceptance of his novel formulation.

 What were the startup years like?
The startup years at Pharmax were driven by a collateral business called Polytechnic Laboratories, also owned by Dr. Cowan.  The laboratory provided research and product validation for many of the leading pharmaceutical and food manufacturers in North America.  Pharmax was a spin-off on products researched, developed, and invented by Dr. Cowan.  The staff and resources of Polytechnic Laboratories were utilized to produce the Pharmax chemistry.  Pharmax’ big break came when Germiphene, a leading Canadian manufacturer of dental products, made Glutacide^® part of their own infection control suite for the dental market. 

 That must have been good for sales?
Yes, Pharmax’ sales soared, however Dr. Cowan remained frustrated because the medical community continued to overlook the potential for Glutacide^®.  After Dr. Cowan’s death, his widow tried to sell the company, which is how Technology, Management and Funding Inc. became involved.

How did the takeover go?
Well, at first, it was a bit of a rough ride.  Almost at the same time as TMF got involved with Pharmax, the patents on Glutacide expired.  Within a few months, Germiphene launched a similar-use product under the Germiphene brand name.  Pharmax’ sales collapsed.  During the same period of time, the regulatory, political and competitive structure of the laboratory market, which TMF inherited in the reorganization, required significant capital to update both equipment and facilities.  In 1999, an evaluation of the business confirmed that Pharmax/Polytechnic was insolvent, and there was no market for the company, other than the value of the real estate.

 That’s when TMF really stepped in?
TMF agreed to take a minority interest in the overall enterprise – fund the business for twelve months in an attempt to make the business viable.  TMF did this because Pharmax’ product development is world-class.

 What were the steps taken?
In the initial period, the TMF team, headed by Gary Hodgins and Dr. Dennis Beatty, recaptured significant business and allowed the overall operation to break-even.  In 2000, TMF bought out the existing shareholder, Dr. Cowan’s widow, hired Martha Wilson to replace Dr. Beatty, downsized the business by two thirds, and created a new five-year plan.

Then what?
This initial five-year plan was completed in 2006.  It involved rebranding all existing Pharmax products, as well as the creation of a suite of products to compete with all of the major competitors.  We also initiated research and development projects based largely on partnering with two universities (Buffalo and Calgary) and with private companies.  Polytechnic Laboratories became “virtual”, but continued its role with key customers.  The emphasis was on the “Pharmax opportunity”.

 What came next?
In 2006, Pharmax initiated a new five-year plan based largely on global expansion.  This plan anticipates structuring licensing deals in at least 3 or 4 countries to service major markets around the globe.  The result of these licensing deals will be the evolution of an insolvent, technically accomplished SME into a global leader in infection prevention and management, with licensing sales in the $75 to $100 million dollar range by 2015.

You did all of this on your own?
Yes, Pharmax remains a small closely held corporation with a staff of 12 people.  70% of our staff is made up of university graduates with science degrees.  Pharmax achieves success thanks to its highly motivated employees, all of whom take pride in the company’s successes.

 How do you keep people motivated?
Each staff person has multiple duties and responsibilities, but the primary job objective is to perform as a team member.  Although there are basic job descriptions, each staff member relishes the team member philosophy, the diversity of their roles, and the challenges of projects.

So everyone wears many hats?
Yes, they definitely do.  With Pharmax as an emerging global player that has strategic partnerships on four continents, our president, Gary Hodgins, spends about 25% to 30% of his time out of the office.  On a day-to-day basis, Gary is the technical consultant, the marketing director, the human resources coordinator, and the strategic planner, depending on the immediate need.

What is the vision for Pharmax?
Our strategic vision includes a complement of 25 to 30 key people, supported by a world-class product development infrastructure that will achieve our overall growth perspective.  While Canada will continue to be our basic operating location for research and new product development, we intend to manufacture all of our products under license wherever we sell them around the world. 

 Are other locations in the works?
Our expansion has already started.  In 2007, Pharmax opened an office in the United Kingdom to service Europe and the Middle East.  In 2009, we expect to open a second office in Hong Kong to service China, India, and the Asian market.  Future locations will depend on future markets, however, within our new five-year plan, we anticipate achieving our growth targets with these offices only.

 What’s the key to your success?
We believe that the opportunities, whether in Canada or elsewhere, are rooted in the ability to connect with the actual end-user.  Much of the focus on infection control is now vested in marketing and not science.  This is an unfortunate situation for which the manufacturers themselves are more to blame than anyone else.  Inappropriate claims abound.  For example, when the EPA last tested 200 products currently registered for sale in the United States, over 60% of these products could not achieve the results claimed on their own labels.

How do you plan to turn this situation around?
Pharmax is launching an initiative in Canada to link our technically-based representatives with end-users and distributors to ensure that the science is communicated so as to achieve the best possible outcomes.  We anticipate that, once developed, this program will be duplicated as part of each licensing location globally.  We believe that education is the cornerstone to successful growth and development, particularly as our product offerings are so unique.

Give us a peek at what else you’ve got planned for the future...
Pharmax has the bulk of its business opportunities focused on special projects.  Many of these projects are proprietary and confidential, so I can’t tell you much about them.  Several projects will involve the public in ways that will directly impact people’s lives.  For instance, we are working with the Boeing Company, an aircraft manufacturer, to develop products for rapidly and effectively decontaminating aircrafts between flights.  We’re also planning to enter the marketplace with products to decontaminate makeup and other cosmetics.  Our biggest project involves creating the first chemistry to eradicate prions from healthcare facilities.  This will go a long way towards reducing the incidence of opportunistic infections.

Tell me about your HR policy...
Our “HR” philosophy is deceptively simple.  It is based on Pharmax’ core values, as mentioned in our Core Value Statement.  Potential employees are screened for their ability to function effectively in our unique environment.  In key positions, we have experienced virtually no turnover, except in cases where we’ve pushed employees to take time off from work to either broaden their work experience or enhance their academic training.  We subscribe to the “anyone veto” principle.  Every one of our staff members can interview potential hires, and they must approve of all hires so that no conflicts arise.

Who is your market?
Our targets for growth in international markets are companies that have established distribution channels and a willingness or a current capability to perform the role of a GMP manufacturer.  Our limitation on licensing requires the licensee to guarantee a minimum of $10 million USD in sales within 3 years of start-up.

Tell us more about your team…  Who are they?  Why is the atmosphere so casual, playful, and creative?  What’s your secret to finding and retaining a team that seems to be happy to work together? We have a very eclectic group of employees, with very different cultural backgrounds.  This is a huge benefit when dealing internationally, since certain employees may be able to communicate in a target company’s native tongue.  You can’t imagine the impact.  Collectively, I believe we can speak 12 to 15 different languages.  The other huge advantage is our weekly barbeques in the summer.  We get to sample global cuisine, since everyone brings a dish from his or her country.  The barbeque grill is divided – half for vegetarians and half for non-vegetarians.  We are a democracy in every aspect.  We celebrate our “Christmas” as a nondenominational event in February.  Each new milestone in our business plan is celebrated at an outside luncheon.  We are also organizing an afternoon canoe trip down the Humber.  I hope that we never get so big as to lose this flexible and informal, yet highly-demanding, approach to business. 

The rising cost of fuel…  What kind of impact is it having on Pharmax? 
The rising cost of fuel has little or no impact on Pharmax, as we are sourcing and manufacturing our products under license where they are sold.  I should also mention that Pharmax will always retain a minority position in these licenses, as well as a seat on the Board of Directors.

Tell us about TMTA's China Mission?
Several China missions have resulted in our advanced negotiations for a license in China with a very substantial, highly reputable pharmaceutical company.  It may seem obvious, however, without these missions by Industry Canada and TMTA to major trade events, companies like ours would never have the visibility to even be considered as a potential candidate.  If there is one initiative that Industry Canada should continue to support, it’s their trade mission to high-profile exhibitions located in the “BRICK” countries (where now we have added “K” to the list, which stands for Korea).

What so you think of TMTA?
No other organization, including MEDEC, has accomplished as much as TMTA in keeping the SMEs plugged into the political, regulatory, and market conditions that impact all of us.  I love the idea that TMTA is beginning to showcase its members, as we can all benefit from each other’s successes and share the experiences that better equip us to cope.

Mui almost has the manometric market to itself

Thank you, Tammy, for accepting to be interviewed. No problem. I’m used to standing in for Dad. This would usually be his job. He takes care of all the “outside” stuff, marketing, sales, etc. I do “internal” stuff, like day to day operations, staffing, production, quality control.

Can we chat about how Howard Mui, ended up doing something like this? Dad definitely created the company from scratch. He was 24 years old, working in the Gastro Intestinal Department at Toronto Western Hospital when the Chief of GI asked him to replicate a motility infusion pump currently available on the market. My father let it be known that he was able to make several modifications and improvements to make the pump more efficient, accurate, and user-friendly.

And off he was. He used some wood, some metal, some plastic tubing… and hand crafted this pump which did the job. It impressed everyone with it’s effectiveness.  We still have that original model (The pump appears in a photo in this article). After my dad built the model for research use at the hospital, other visiting doctors saw it and wanted one too.  At first, requests for his modified pump trickled in.  It wasn't until 5 years later when he decided to redesign the N2 gas powered pump to become AC powered then the business really started to take off. Creating the electrical model allowed him to corner the market in Europe. 

And that was it?  Yep. Once that first pump saw light of day, everyone wanted one. Orders just came pouring in. Dad started manufacturing pumps at home. I grew up with pumps all around me. By the time I had my own room, it was filled with pump-making equipment. Pumps were literally only inches from my own pillow.

That’s how Mui was launched? Dad was meeting a need which had not so far been met adequately. There existed other pumps but they were more complex, more expensive and more cumbersome. His pump was the right invention at the right time.

When did Anna, your mom, join the company? Not right away. She had her own job.  She was a social worker for the Children's Aid Society. But once she did join the company, dad dealt with the production of the pumps and the marketing while my mom dealt with the production of the catheters and internal operations of the company. She was very good at it. We still miss her now.

What about you? You were involved with the company from early on?  Yes, as a kid, I grew up with the company all around me. As a primary school student, I would come into the office to photocopy assignments and stuff like that. By the time I was in high school, I often helped out with office tasks, like stuffing envelopes and other support duties.  

Did you feel you had a destiny with the company? No. I actually wanted to do something else. I really loved animals and wanted to work with them. I went to Guelph and studied to be a wildlife biologist. But when mom got sick, I came back to help out. After she passed away, I stayed on.

What’s your average day like now? My day? (Laughs)… Controlled chaos! Really, my job is to keep things under control. I’m lucky to be working with good people but their job is to handle the everyday stuff. Mine is to take care of things that aren’t… ordinary. Hence, the chaos part. But I enjoy it.

What items are your company’s signature products, it’s breadwinners? Mui Scientific is best known for its water perfused manometric infusion pumps and corresponding catheters.  The pump generates a constant pressure to push water through multiple channels that correspond to the number of lumens within the catheter being inserted into a patient’s gut system.  The water drips out of individually punched holes per lumen along the length of the catheter. When the GI muscles contract, they occlude the water flow from that hole, causing a back pressure to be registered on transducers mounted on the pump.  These procedures are conducted for diagnosing contraction problems with the muscles in the GI system. 

I’ve seen catheters with 1, 2 or 3 lumens, but yours are way up there!  Yes, our catheters can have as many as 21 channels. For diagnosing the gastrointestinal system, the more sensor points available, the clearer the picture of the functionality of the gut muscles can be obtained.

How does Denstleeve fit in? Mui Scientific is very good at doing what it does. We pretty much have all the sales we need from the Canadian, American and European markets. But China, Asia, Australia, that was all unknown to us. This is where Dentsleeve came into the picture. As an Australian company, they had extended their reach into much of Asia. They also approached manometrics from a different angle. Rather than designing a device to cover all requirements, they specialized in custom orders, designing very specific pumps for very specific needs.

So you developed a partnership? No, we bought them out. Because they were in financial trouble. You see, designing all those very specific pumps was great for clients but really rough on the company. Clients got exactly what they wanted. But in order to meet all these orders, Dentsleeve had to keep a huge inventory. They also had to spend endless manhours to create products for a tiny market. It was unsustainable. 

What has become of the company? They no longer exist in Australia. We bought their name, their brand, their inventory and their patents. We still do business as Dentsleeve in those parts of the world which expect to be serviced by them. But we do it from Canada now. As you can see, the unit right next to this one features the Densleeve logo. Dentsleeve has its own address, literature and stationery but we’ve opened up the wall that used to divide the two units. Our staff, equipment and products now travel back and forth between the two companies. 

Is there any distinction left between the two product lines? Yes, we do maintain some distinction between the two product lines.  It allows our customers to have a choice.  Each line has their own advantages and disadvantages.  For the pumps, the Mui Scientific housings are stainless steel, whereas the Dentsleeve models are plastic.  But, we are increasingly borrowing from each design to make some components common for both models, allowing for easier control of inventory and better buying power, as well as developing new, hybrid models that did not exist before.  For the catheters, Mui Scientific specializes in PVC, whereas Dentsleeve concentrates on silicone material.  Also, the Dentsleeve catheters have a specialized component called a "sleeve", where a thin silicone membrane is glued over the single pressure opening, extending the pressure sensing area along the length of the tunnel created.  This invention was the basis for the creation of the Dentsleeve company.

What is it like working at Mui? Well, for one thing, we’re a very small company. We only have 15 people on staff.  ...To get around that fact, we do a lot of cross-training, making sure that everyone on the team pretty much knows all the essentials about at least one other department.

How do you gain & retain people? Once again, because we’re a small company, the majority of our staff came through us by word of mouth. Personal references have been a life-saver for us. One person recommends someone else who then ends up recommending someone else. It’s saved us a lot of headaches. Rather than having to go through loads of staffing interviews, we’ve been able to hire someone right away. And the fact that each person is here on the personal recommendation of someone else makes them extra dedicated to their work.

Okay, that’s the “gain” part, what about retaining people? Well, we try to be a caring employer. I have grown up side-by-side with the company and have known every employee.  I have a personal rapport with many of them. Also we provide on location day-care. And we have regular, monthly pizza parties in the winter and BBQs in the summer. That BBQ you saw in our storage room, it gets a lot of use. (Laughs) Dad is also committed to supporting our people’s efforts at furthering their education. The company fully funds their continuing education. 

How has Mui been impacted by the rise in fuel costs? Not much. At least, not yet. Most of our business is involved in fullfilling blanket orders. Since such orders are placed months in advanced, our prices do not yet reflect the impact of  a fuel prices. But I expect we will have to deal with higher prices as we start to deal with new orders.

Have you given any thought to Mui’s carbon footprint? Yes, we have. So far, it’s been in small ways, like making sure that we print on both sides of a piece of paper before discarding it. We’ve also been able to replace our packaging styrofoam “peanuts” with materials that are biodegradable.

Where is Mui Scientific headed? We’re definitely heading towards single use products. Up until now, most of our equipment has been designed for long term use but there is now an increasing demand for single use, disposable products. The way we see it, this trend started in the UK because of  fears of infections related to Mad Cow Disease. From there, it spread to concerns about other possible sources of infection. Once the US got in on it, the demand just kept rising. I can’t see that there is any going back.

That adds up to awful lot of plastic, doesn’t it? What about the environment? I know! All that plastic being trashed every day, day in, day out. At some point, someone will raise that concern! So far, concerns over infections is the prime focus. But, at some point, someone is bound to raise the alarm in terms of impact on the environment. At this point, I don’t know of any viable substitutes. Do you?

Some industries are experimenting with materials made from plants.. I’ve heard of that too. Let’s hope they come up with viable alternatives soon.

What about globalization? Well, we’re all for it. But since we don’t do our own marketing, we’re not quite as affected by it as other companies are. Purchasing Dentsleeve was our most significant global venture yet. So far, Mui’s markets were mostly in Canada, the USA and Europe. Since Dentsleeve has its clientele base in Australia, China and Asia, we’ve pretty much got the globe all sewn up.

Mui Scientific has been a member of TMTA since its inception. What do you get out of your membership? The Association does a lot of advocacy work around issues like market access and other similar issues but this is not relevant to us because we do not handle our own sales. Our distributors get to deal with those headaches. For us, membership in TMTA is about fellowship and networking. Meetings give us a chance to meet with our peers and keep abreast of what is going on in the industry at large.

For more info about the company, go to www. muiscientific.com

This article is quoted from the 2008-2009 issue of BioSpheres.