Applied Microbiology Inc. wanted to do more than rest on itsprofitable anti-microbial food additive subsidiary in the U.K. So theNew York company's board of directors brought in pharmaceuticalveteran Fredric Price to lead its drug-development efforts."They brought me here to grow this business," Price said Monday, afull week into his new position as president and CEO of AppliedMicrobiology. "If they wanted to have a sleepy food-preservativebusiness, they wouldn't have brought me on board."One of my challenges is to make this company known, to explain thetechnology, to show results and to let the world understand what wehave and how we're going to develop it." The relative anonymity, Pricesaid, is reflected in the fact that no Wall Street analysts track thecompany.Applied Microbiology was founded in 1983 and is based on proprietarytechnology in the area of nisin, a peptide secreted by a protein in abacterium, which protects the bacterium by killing other bacteria. Aresulting product, Nisaplin, a food additive to protect against bacteria,is manufactured by the English subsidiary, Aplin & Barrett, and sold inmore than 40 countries. Another product based on nisin, Ambicin, isbeing developed for a number of human indications includingperiodontal diseases, gastrointestinal disorders and skin conditions.A recombinant version of Ambicin is in the research stage for aparenteral, or injectible, version of the agent, which Price said "couldbe the home run for Applied Microbiology." He said the market is big,and getting bigger, because some bugs now are resistant to existinganti-infectives."This is the one we're going to pump significant resources into in thenear future," Price said. "Applied Microbiology is going to spend thecash flow that Aplin & Barrett is throwing off, and more. We are goingto start spending the cash by developing the drug business. That'swhere Applied Microbiology's big future lies."Some of the business related to Ambicin is already taken, in the formof license and supply agreements. SmithKline Beecham plc hasacquired a worldwide license for oral hygiene indications. TheAstra/Merck Group, a division of Merck & Co., has U.S. rights to theanti-microbial agent for gastrointestinal disorders related to theHelicobacter pylori bacterium. And another Merck subsidiary, CalgonVestal Laboratories Inc., has U.S. and European rights to the productfor skin disorders.Price, who came to Applied Microbiology from the position of vicepresident, finance and administration and chief financial officer forRegeneron Pharmaceuticals Inc., said discussion with potential partnersfor non-U.S. pieces of the business turned up "significant interest."And with possible new alliances, the company wants to get even moreof the Aplin & Barrett subsidiary, which is based on large-scalefermentation and "is ripe for expansion."Price said that Applied Microbiology is reviewing the subsidiary to seehow to increase market share of existing products, to see if introducingsecond-generation products would be beneficial, and to be on thelookout for acquiring other products, companies or technologies thatcomplement Aplin & Barrett, either from a technology or distributionstandpoint. Another goal is to enter the U.S. and Japanese markets,particularly, with the Nisaplin product."This is a remarkable opportunity," Price said. "It has all theingredients for success."And one of the great things about this company is we don't have totear anything down to start _ no firings, no sell-offs. The Aplin &Barrett business is robust, and the research and drug development sideis focusing on the right technology, so we can spend all our timedeveloping and not re-creating the business."About 70 of the company's 80 or so employees work in the U.K. Onechange being considered is moving the U.S. operations to suburbanNew York, where Price said it would be easier to attract top scientists,as well as offering cheaper rent. The company's stock trades under theNASDAQ symbol "AMBI."Price is working now in a temporary office near Tarrytown, N.Y.,where he worked at Regeneron since 1991. Before that he was atRxFDP, a health-care consulting practice Price started in 1986. Priceentered the industry in 1973 with Pfizer Pharmaceuticals, a Pfizer Inc.subsidiary, where he was a vice president in the drug business. n

-- Jim Shrine

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