5/25/2007 - From the "Portland Press Herald", 5/25/07 Edition

Immucell tries to 'grow cautiously'

The Portland biotech firm has stayed conservative but is positioning itself for overseas expansion.

by EDWARD D. MURPHY, Staff Writer May 25, 2007

Slow, steady and measured are words rarely applied to firms in the fast-paced biotechnology industry.

But they do apply to Immucell, a Portland biotech company that is making a big investment for its size and putting itself in position to break into international markets.

The company will unveil its newly renovated, $1.5 million Portland production facility on Evergreen Drive to its shareholders early next month. The upgraded facility and new equipment will help the company comply with current Good Manufacturing Practices standards, considered critical to attempts to expand the markets for Immucell's animal-health products for the dairy industry.

Many other countries include compliance with the standards as one of their regulatory requirements, said Michael F. Brigham, Immucell's president and chief executive officer.

Immucell is a small high-tech company that prides itself on solid Yankee business principles. It has developed and perfected products, focused on core markets, avoided deep debt as it has grown, and owns, rather than leases, its building.

The simple fact that it's been around for 25 years, amid huge conglomerates that dominate much of the biotech industry, is a testament to its ability to focus on solid products for stable industries.

Immucell also is considered one of the bedrock companies of the state's biotech industry, which includes larger Idexx Laboratories of Westbrook, which also focuses on medical products for animals.

"They were one of the early ones," said Brian Hodgkin, referring to Immucell. Hodgkin is a University of Southern Maine engineering professor and, until recently, was director of the Biotechnology Association of Maine.

Hodgkin said he's kept an eye on Immucell over the years -- the company was founded in 1982 -- and isn't surprised the company is still around. Immucell is considered a solid, consistent and reliable company, he said, even if it's not always making news.

Immucell's major product is First Defense, which was approved for use in 1991 and protects newborn calves against organisms that cause scours, a severe diarrhea that can be fatal.

Other products also are aimed at protecting the health of dairy cows, and more that two years ago, it struck a deal with Pfizer for Mast-Out, a treatment for mastitis in dairy cows that could lead to substantial revenue down the road.

The agreement calls for Pfizer to continue to develop Mast-Out and steer it to regulatory approval. Immucell -- which originally developed the product -- will earn royalties on sales.

Immucell got $1.5 million up front and will earn more as the product achieves milestones, such as market approval, which could happen in 2009.

Brigham said Immucell's products could become even more popular in the dairy industry as customers shy away from milk produced by cows treated with drugs or artificial hormones. By contrast, he said, First Defense works by spurring the calves' own bodies to produce the antibody that wards off scours.

"That's Mother Nature's way," Brigham said. "That cow was going to produce that antibody anyway."

Mast-Out, he said, is gentle enough to allow farmers to continue to use the cow's milk while it's being treated for mastitis. Most other treatments require the farmer to throw out the milk during treatment and for a period after.

Sales of First Defense grew 6 percent last year, about the same steady growth it's exhibited in the past eight years -- all of which have been profitable, Brigham said. The increase partially offset some declines in sales of tests and other products for the dairy industry, and Immucell ended up with net income in 2006 of $647,000, down from $708,000 in 2005.

The new production facility isn't expected to lead to an immediate increase in employment, but Immucell added a couple of positions last year, he said, and now has 30 employees.

Brigham said employment growth could come as Immucell moves into overseas markets. The company noted that there are about 10 million dairy cows in the U.S. and Canada, compared with 23 million in the European Union and 6 million in Australia and New Zealand.

Brigham said the company will probably focus on Australia and New Zealand first.

"We're trying to grow cautiously," he said, hoping to avoid the need to turn to outside investors.

"We're off the radar, and it's almost a necessary strategy to say, 'Let's not be dependent on Wall Street,'" he said. "That's conservative."



Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:

emurphy@pressherald.com