Ricerca Unveils Growth Strategy

Ricerca Biosciences LLC (Concord, Ohio, www.ricerca.com), a contract drug-development company, is embarking on a growth strategy upon which it hopes to double its revenues by 2009. The company recently completed a financial restructuring that includes new equity and term facilities totaling nearly $50 million. That financing will help Ricerca to implement a multiyear business plan, which includes a $15-million investment to add chemistry and biological laboratories to its site in Concord, Ohio.

Strategy focuses on drug development services

Ricerca focuses on providing drug-development services of small molecules from discovery through commercial manufacture using both biological and chemical capabilities. Its services include lead optimization, analytical and process chemistry, services for toxicology and pharmacology, radiosynthesis, manufacturing of active pharmaceutical ingredients (APIs), and regulatory support. Its API production facilities in Concord, Ohio include kilo laboratories operating at the 50-L scale and plant-production systems with capacities of between 200–2000 L in scale. Ricerca works with large pharmaceutical companies as well as emerging or start-up companies that often need a broader scope of services to support their drug development.

The strategy of offering an integrated approach in biology and chemistry services has been successful. 2007 client revenues will approach $50 million. Between 2004-2006, Ricerca increased revenues from its toxicology and bioanalytical services by more than 50%, and from chemistry services by over 40%, says R. Ian Lennox, executive chairman of Ricerca.

Ricerca recently expanded its service offerings to include drug-discovery packages (early-lead selection paired with in vitro and in vivo analysis). Its drug-discovery services support advancing hit molecules to development candidates for a new investigational drug application (IND). These capabilities include medicinal chemistry services for evaluating, validating and optimizing active compounds for a discovery program, lead-chemistry optimization, custom-focused libraries synthesis, synthesis to establish structure activity relationships, chemistry and synthetic route development, and synthesis of reference compounds, scaffolds, building blocks, and starting materials. It also provides drug-ability assessment, metabolite identification, and impurity studies as well as toxicology and pharmacology services, which include in vitro absorption distribution, metabolism, elimination, and toxicity (ADMET) testing and in vivo biological testing, including animal-efficacy models.

To support IND candidates through clinical development, Ricerca provides process optimization, scale-up, manufacturing under good manufacturing practices (GMPs), and bioanalytical testing.

Ricerca is preparing for production of commercial APIs following the completion of a successful preapproval inspection of its Concord manufacturing facility by the US Food and Drug Administration (Rockville, MD, www.fda.gov) in 2006.This effort is the first commercial preapproval inspection for Ricerca, reflecting the company's increased emphasis and strengthening of its compliance program to commercial production standards.

Expansions and growth strategy

Last month, Ricerca completed a financial restructuring that includes new equity and term facilities approaching $50 million that will help finance the company's growth plan. Lennox recently completed a business plan for the company through 2009, which set a goal of more than doubling revenues by 2009. The plan includes capital expenditures of more than $15 million over the next three years, the vast majority of which is to be invested in 2007 in new chemistry and biology facilities and equipment, as well as resources for training and staff additions. The company now employs 250 people and expects to increase staff by 15% in 2007.

"Our biology investment is in two areas," explains Lennox. "The first is in the development of our histopathological capabilities such as microscope-slide preparation. The facilities are now being built, and staffing is ongoing." The facility is expected to be operational in the third quarter of 2007.

"The second investment is the building of our new comparative medicine laboratory," says Lennox. "This involves the construction of a very specialized new facility, instruments, and recruitment program," which includes a 19,000-ft²facility. These improvements are expected to be completed and operational by October 2007.

"Our investment in chemistry is scheduled to occur throughout 2007 with significant investment in software and instrumentation," continues Lennox. " We will also be upgrading our toxicology data management system to the newest version of Instem's Provantis software. We are upgrading our enterprise chromatography capabilities with the implementation of the most current version of Perkin-Elmer’s Totalchrom. Additionally, we are enhancing our scientific data management capabilities with the upgrade of our Applied Biosystems' SQL*LIMS system to the most recent version, enabling further automation of chemistry operations".

Ricerca to date has grown organically with a strong service focus on North America biotechnology and well-established Japanese clients, small molecules, and nonclinical integrated research.

In late 2006, Ricerca established exclusive collaboration partnerships with Latitude Pharmaceuticals (San Diego, CA) to support client formulation requirements as well as the Bicoll Group (Munich, Germany and Shanghai, China) for drug-discovery services.

"Ricerca’s new investors, Bain Capital Ventures, Cowen Investments and SV Life Sciences like the Ricerca strategy, are keenly interested in growth and have significant capital resources for acquisitions. We don’t need to grow through acquisitions,"says Lennox, "but being in a position to do so is an inevitable characterization of the new Ricerca",he adds.