PORTLAND, Maine — As Jean Hoffman’s cat, Dude, got older and more infirm, she began to see some of the failings of the veterinary medicine sector and opportunities to both help and build a business.
Hoffman had spent her career in the pharmaceuticals industry, both human and animal. As Dude aged and needed increasing vet medicines to stay healthy, Hoffman realized one big difference between veterinary pharmaceuticals and human: generic drugs were virtually nonexistent in the pet world.
In fact, Hoffman said, 94 percent of drugs for dogs and cats approved by the Food and Drug Administration have no equivalent generic version, while virtually every human drug for which the patent has expired has a generic.
“I saw a big need,” said Hoffman. “I knew not everyone could afford to buy drugs costing $60 a month for their cat.”
Hoffman founded Putney Inc. in 2006 aimed at that market — developing generic versions of companion animal drugs.
Hoffman’s business idea has gotten a strong vote of confidence from the investment world. Late last year, Putney received $21 million in third-round venture capital financing, following $12 million raised in two earlier rounds.
Putney added 10 employees last year and now has 22, with plans to hire another 10 this year. While she wouldn’t disclose exact numbers or specific areas of treatment, Hoffman said Putney has a pipeline of generic drugs currently under FDA review and expects “multiple product approvals” within the next 24 months.
“That’s what will drive our future growth,” Hoffman said.
Hoffman said Putney is not looking for any future investment. With the approvals, she said, will come “dramatic growth of revenues.”
According to an October 2011 report from market research firm Packaged Facts, the size of the U.S. pet medications market in 2011 was $6.68 billion, and is projected to reach $9.25 billion in 2015.
Putney has been working to identify the right generics to develop, said Hoffman, aiming at areas where there is a market need and where more pet owners may opt for treatment if there were a less-expensive alternative available.
Once the team identifies the drug to pursue, they next determine which human drug development organization has the right mix of formulation scientists and facilities to do the actual work.
Putney has opted to go with facilities that normally work on human drugs, Hoffman said, because those organizations will have kept up on the technology needed to meet ever-increasing FDA regulations, and are set up with high-quality plants that can quickly scale production when commercialization is needed.
Putney’s scientists manage external market development, product testing and the regulatory process. Essentially, they are outsourcing the production work to labs. The company also has licenses to sell two generics currently in the market, one for Ketamine, the other for Caprofen, both pain medications, and sells some FDA-approved human medicines that are used by veterinarians.
Broadly speaking, said Hoffman, drug areas of interest to Putney include anti-inflammatory drugs, pain relievers and parasiticides.
“If the owners can’t afford to put their pets on it, then we need to have a less expensive alternative — it’s really that simple,” said Dr. Elizabeth Johnson, manager of product development.
Johnson is a vet who joined Putney in 2009, and runs the company’s studies that test its products alongside the brand-name drugs. She still works one day a week at a local vet clinic, and said she sees pet owners multiple times a day who can’t afford to pay for pet medications.
“If Putney can put out cost-effective FDA alternatives to these expensive medications, then everyone wins,” said Johnson. “More pets get treated, the owners are happy, veterinarians are happy because they have clients leaving their offices without outrageous bills.”
Her colleague, Dr. Nancy Zimmerman, another vet and director of professional marketing, noted that the last recession hit vet clinics harder than they had been before. Clinics went bankrupt, doors were closed, and that hadn’t been seen in previous slowdowns, Zimmerman said.
Hoffman said in a down economy, pet owners make less vet visits. Animals can sicken and, when they finally get to the vet’s, are potentially in much worse shape than they would have been if they had visited earlier.
Putney has research showing that when vets can offer generic drugs, more owners bring their pets in more often, Hoffman said.
The venture capital infusion last year allowed Putney to bring on more employees and to start building its commercialization structure for when its drugs are approved. While many of the top experts Putney has hired have been from out of state, the company is looking to hire finance, customer service, inside sales and administrative positions from the Maine work force. That said, one of the top challenges Putney faces going forward is attracting the kind of top talent it needs to grow.
She noted, however, that one of the company’s top recent hires, TJ Dupree, the chief operating officer, came from another Maine vet biotech — IDEXX Laboratories in Westbrook.
“There is a cluster growing up here around IDEXX,” Hoffman noted.
As COO, Dupree is first charged with developing that commercialization effort. There are challenges to that, he noted.
“We are a very small fish in a big pond full of sharks. There are a lot of branded pharma companies who we are challenging, and they are not interested in our success,” said Dupree. “We have to recognize that while we have a fantastic message, getting that message to veterinarians and pet owners is ultimately work. We are going to have to do things differently — leverage technology and social media in ways they have not.”
The pet generics market hasn’t been developed largely because it’s difficult to do so, said Hoffman, with high barriers to entry. But working with human drug companies has helped knock some of those barriers down, she said.
Dupree’s next challenge will be opening up global sales channels, and working Putney’s drugs through the regulatory processes in countries where “pets are economically valued as well as emotionally valued,” he said.
“We see a great opportunity to build out — not only to serve the U.S. market, but to take it globally,” said Hoffman, “here from Maine.”