Dr. Frost's brilliance
Dr. Frost was chairman at Mt. Sinai Medical Center in Florida and a consultant at Miles Laboratories when he met the manager, Michael Jaharis. They learned of a pharmaceutical company that had just lost $700,000 and couldn't afford to bring out a new drug.
Dr. Frost figured they could customize a new delivery system to effectively speed past the typical decade-plus drug commercialization route involving tens of millions of dollars. He invested $50,000 in the company, Key Pharmaceuticals, and found a new way of delivering an existing drug into the body.
Next, Dr. Frost and Mr. Jaharis took on a crotchety asthma medication. Theophylline was a little-used older drug, ineffective in small doses but toxic in large doses. So, Key researchers devised a way to incorporate the drug into a 12-hour time-release pill.
Blessed with good luck and good leadership, Key continued its unique pathway. The company didn't have the roughly $30,000 needed to test the pill but The University of Florida agreed to test it and publish the results. Rather than spending a lot of money on marketing, Key offered allergists pill samples backed by scientific data and a calculator to figure accurate dosage.
With successful drugs marketed, agreements with larger pharmaceutical companies followed. The realization hit the partners in 1986: They had, indeed, found the key to building a $50,000 straggler into a behemoth. They sold Key Pharmaceuticals to Schering-Plough for $800 million.
In 1987, Dr. Frost jiggled the key to open up the potential of generic products company Ivax. The company became the world's largest maker of low-priced copies of brand drugs whose patents had expired. The business was tough and disheartening at times - like the time a lucrative Norwegian merger fell apart in 1995. But Dr. Frost shoved away that disappointment.
He sold the business in 2005 to Teva Pharmaceutical Industries for a cool $7.6 billion.
The doctor from Miami Beach, Fla. continued his magic as he began building Opko Health in 2007. Today, the pharmaceutical and diagnostic company boasts a $4 billion market cap and a respected chief executive.
"Every company we've built has always had skeptics," he said. "And they have always paid the price in the end."
Dr. Frost indicated OPK is targeting multiple medical markets worth about $30 billion. We wouldn't be surprised if, at some point, Dr. Frost's company becomes an acquisition target of a large pharmaceutical company searching for promising drugs to replace its drugs with expiring patents. Insider Filings - FROST PHILLIP MD http://www.secform4.com/insider-trading/898860.htm http://biz.yahoo.com/t/84/307.html