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`ENCYCLopedia*com
`
`Noven Pharmaceuticals, Inc. - Dictionary definition of Noven Pharmaceuticals, Inc. | Encyclopedia.com: FREE online dictionary
`
`Noven Pharmaceuticals, Inc.
`
`International Directory of Company Histories
`COPYRIGHT 2006 Thomson Gale
`
`Noven Pharmaceuticals, Inc.
`
`11960 Southwest 144 Street
`Miami (/Dlaces/united-states-and-canada/us-Dolitical-geograDhv/nnianni). Florida (/Dlaces/united-states-and-canada/us-
`political-geographv/florida) 33186
`U.SA
`Telephone: (305) 253-5099
`Fax: (305) 251-1887
`Web site: http://www.noven.com (http://www.noven.com)
`
`+,-./01234536.78963:;<0=/6>
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`Noven Pharmaceuticals, Inc. is a Miami-based company devoted to the development of transdermal drug delivery products.
`The company uses a small adhesive patch worn on a patient's skin to provide control led deliveryof a drug for a defined period
`of time, thereby improving patient compliance. Concentratingon the delivery of existing drugs, Noven has been able to focus
`its research and development efforts on improving transdermal technology, making Noven an industry leader and resulting in
`the development of much smaller patches that in addition to improving patient comfort allow for patch versions of drugs that
`would have previously been too large to wear. Noven's advanced technology also allows two drugs to be delivered on one small
`patch, such as its CombiPatch product that offers both estrogen and progestin to menopausal and post-menopausal women in
`the United States (/places/united-states-and-canada/us-political-ReoRraphv/united-states). Other Noven products, sold
`through its licensees, include Estalis, the European version of CombiPatch; Vivelle, an estrogen patch for the U.S. market;
`
`Public Company
`
`Incorporated: 1987
`
`Employees: 252
`Sales; $55.4 million (2002)
`Stock Exchanges: NASDAQ
`Ticker Symbol: NOVN
`NA/C; 325410 Pharmaceutical and Medicine Manufacturing
`
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`http://www.encyclopedia.com/books/politics-and-business-magazines/noven-pharmaceuticals-inc
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`Noven Pharmaceuticals, Inc. - Dictionary definition of Noven Pharmaceuticals, Inc. | Encyclopedia.com: FREE online dictionary
`
`Menorest. an estrogen patch fc the European mark Vivelle-Dot, the U f-. version of a later generation estrogen petch, the
`world's smallest; and Estradot, the European version of Vivelle-Dot. In addition, Noven directly markets DentiPatch, a product
`used by dentists as a preliminary anesthetic.
`
`Development of Transdermal Technology: 1980s
`
`From the beginning researchers faced three problems in developing a skin patch appropriate for the delivery of drugs:
`comfortable size, proper adhesion, and possible skin irritation. The first transdermals, produced in the 1980s, relied on a
`reservoir system that contained the drug in an alcohol solution. Although these patches effectively delivered a proper dosage
`of a prescribed drug, the alcohol caused skin irritation. The next generation of transdermals opted to solubilize the drag in an
`acrylic adhesive, resolving the problem of skin irritation, but leading to other complications. To make a patch small required
`more drags and less adhesive, resulting in a product that did not stick very well to the skin. To maintain adhesion and still keep
`the patch to a reasonable size, researchers turned to a skin permeation enhancer, which once again resulted in problems with
`skin irritation. Despite the difficulties in working with transdermals, the technology offered great promise. One of the early
`researchers was Noven'scofounder, Steven Sablotsky, a University of Florida graduate with a degree in chemical engineering.
`While working with start-up Key Pharmaceuticals, he served as director of product and process development and was
`instrumental in the creation of a nitroglycerin transdermal patch, the Nitro-Dur II. As the result of its success with the product,
`Key was acquired by Schering-Plough in 1986. Noven's other cofounder was Sablotsky's cousin, Mitchell Goldberg, a New
`York City securities dealer. The two had grown up together, drifted apart because of their careers, but became reacquainted in
`1986 when Sablotsky attended Goldberg's wedding. During this exciting period for Key, Sablotsky and Goldberg began to
`discuss the possibility of starting their own company to take advantage of the Nitro-Dur II by offering a second generation
`transdermal estrogen delivery product that relied on the adhesive method rather than a reservoir system. They founded their
`company in January 1987 and incorporated it in December 1987, with Sablotsky serving as president and chairman of the
`board and Goldberg as executive vice-president and director. Goldberg was responsible for business development, licensing,
`and corporate communications. The company name was a combination of letters from the first names of Steven Sablotsky and
`his wife, Noreen. Together the parties raised $250,000 in seed money from family and friends. Initially the company was little
`more than Sablotsky working at the kitchen table in his East Kendall, Florida, home, but as the business began to take shape,
`Noven leased 20,000 square feet of space near the local Tamiami Airport.
`
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`Going Public: 1987
`
`Operating with limited funds, Sablotsky and Goldberg looked to raise $1 million to fund Noven's research and development of
`transdermal, as well as transmucosal, drug delivery systems. They decided to take the company public, scheduling the offering
`for October 1987. Noven's investment banker advised the partners to hold off and to take a wait-and-see attitude. Then the
`stock market crashed. According to Sablotsky, his banker told him, "Steve, you're on your own. I hope you didn't burn any
`bridges." The offering was postponed, not taking place until six months later. With so few companies now opting to go public,
`Noven was able to gain swift approval from the Securities and Exchange Commission. The company's research and
`development phase lasted until 1994, the initial focus on transdermal patches to deliver estrogen to menopausal and
`postmenopausal women, a potentially massive market as women of the baby boom generation began to enter menopause.
`Estrogen replacement offered a number of benefits for older women: lowering the risk of heart attack, preventing
`osteoporosis, and lessening palpitations and "hot flashes." As a result, estrogen replacement therapy was expected to grow
`steadily over the ensuing years and transdermal delivery systems hoped to control a third of that market. Noven made quick
`strides in developing an estrogen patch and as early as 1989 the company was able to sign a worldwide licensing agreement,
`with the exception of Japan (/Dlaces/asia/iaDanese-Dolitical-geographv/iaDan). for its transdermal estrogen delivery system. A
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`Noven Pharmaceuticals, Inc. - Dictionary definition of Noven Pharmaceuticals, Inc. | Encyclopedia.com: FREE online dictionary
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`year later, Noven reacquired the rights to the United States and Canada (/places/united-states-and-canada/canadian-political-
`ReoRraphv/canada). During this initial stage, Noven posted revenues of $656,169 in 1989 and $1.1 million in 1990, with net
`losses of $87,904 and $186,863, respectively. In 1991 revenue dipped below $200,000 while losses topped $3 million. In
`need of a cash infusion, Noven attempted in September 1991 to sell itself for $47 million in stock to another south Florida
`pharmaceutical, Ivax Corporation. A month later, however, Ivax backed away from the deal due to the valuation of Noven's
`"goodwill," the difference between the company's tangible assets and its potential. To this point Noven had no products on the
`market and had yet to file its first application with the Food and Drug Administration, although it had at least two products for
`which it was preparing paperwork. According to the South Florida Business Journal, "under existing accounting principals and tax
`laws, Ivax would have been required to charge the 'goodwill' against revenue without having the benefits of corresponding tax
`deductions. Noven had so much 'goodwill' that Ivax could afford to buy the company using stock worth about $47 million then,
`but it could not risk the cost of paying taxes on the amortized 'goodwill' for 40 years in the future, as accounting rules
`required." As a result, Ivax reluctantly decided not to proceed with the acquisition.
`
`Noven was still an unprofitable business in June 1994, when it again tapped the equity market, raising $30.3 million by selling
`2.25 million shares of stock at $13.50 per share, an amount that was $2 less than what the company had hoped for. Much of
`the funds went to purchase necessary equipment for a new manufacturing, distribution, and research facility. By now Noven
`had a number of other transdermal products in the pipeline, including patches for hormone replacement, cardiovascular
`disease, antifungal therapy, dental pain management, and asthma. In 1993 the company generated $4 million in revenues,
`posting a net loss of $3.3 million, and a year later had sales of $6 million and a net loss of nearly $5 million. In the fall of 1994
`the company received FDA(/social-sciences-and-law/political-science-and-Rovernment/us-Rovernment/food-and-druR-
`administration) approval on its estrogen patch, and with the product finally able to enter the marketplace it appeared that
`Noven was on the verge of finally turning a profit, but a number of factors intervened to jeopardize the future of the company.
`In January 1995 another estrogen patch, produced by Berlex Laboratories, received FDA approval and it appeared that it
`would become available in the United States and Canada in the next three or four months.
`
`Company Perspectives:
`
`In the months after the failed merger with Ivax, Noven was able to secure much needed cash by signing licensing deals for its
`estrogen patch with two giant pharmaceuticals while retaining its freedom. Obtaining rights to the United States and Canada
`was Ciba-Geigy, which had been selling its own patch before concluding that Noven's product, named Vivellefor the North
`American market, was superior. Ciba decided to market Noven's patch as its own, acquiring warrants that would allow it to
`purchase a 7.6 percent stake in Noven. The French firm of Rhone-Poulenc Rorer (RPR) obtained rights to the rest of the world
`for the 10-day estrogen patch. To raise further cash, Noven held a secondary stock offering that netted $17.7 million. Because
`its licensees would require an overabundance of available product before marketing the estrogen patch, Noven had to expand
`its production capacity. Management considered moving the company to Pennsylvania (/places/united-states-and-canada/us-
`political-ReoRraphv/pennsvlvania). close to RPR's U.S. headquarters in Philadelphia, but officials in Dade County, Florida, were
`eager to keep Noven and offered a number of incentives to stay. Not only did Noven receive economic aid in labor recruitment
`and training, the county smoothed the way on zoning waivers and provided quick approval on water and sewage permits. As a
`consequence, Noven was able to purchase and lease a total of 100,000 square feet in three buildings located on 15 acres of
`land in South Dade County.
`
`
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`








`




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`



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`#

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`"# &&&
`"
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`)*
` 
`"
`
`
`
`Already a leader in the development of advanced drug delivery technologies, Noven Pharmaceutical's mission is to become the world's
`
`premier developer, manufacturer and marketer of transdermal drug delivery systems.
`
`http://www.encyclopedia.com/books/politics-and-business-magazines/noven-pharmaceuticals-inc
`
`3/6
`
`

`

`6/29/2017
`
`Noven Pharmaceuticals, Inc. - Dictionary definition of Noven Pharmaceuticals, Inc. | Encyclopedia.com: FREE online dictionary
`
`Although Noven's new manufacturing plant had still not received FDA approval, Ciba (soon to become part of Novartis AG)
`decided in the spring of 1996 to finally start marketing Vivelle, after experiencing a 7 percent drop-off in sales of its older
`patch. This turn of events resulted in an surge of investor confidence, which would more than double the price of Noven stock.
`Such volatility in the price of the company's stock would be commonplace over the next few years. By the spring of 1997 the
`stock was again trading at the $8 level, due to lower levels of reorders as the company worked through its stockpile of estrogen
`patches. Noven hoped to improve its fortunes, and move closer to its elusive goal of profitability, when it introduced its second
`product, Denti Patch, in 1997. The adhesive strip filled with lidocain was designed to numb the mouth within two minutes and
`remain effective for 45 minutes, allowing a dentist to painlessly introduce a needle to the area. Although a positive step, Noven
`lost close to $9.6 million in 1997.
`
`New CEO and Move to Profitability: Late 1990s, Early 2000s
`
`Noven, on the other hand, was still nine to 12 months from being able to manufacture its patch in one of the company's new
`South Dade facilities, which was experiencing difficulty in gaining FDA approval. Ciba was reluctant to introduce the product
`unless it was certain of a steady supply, forcing Noven to start producing the patch at an existing facility for the European
`market and to build up sufficient inventory for eventual sales in North America (/places/oceans-continents-and-polar-
`reRions/oceans-and-continents/north-america). Noven officials were confident that their estrogen patch, designed to be used
`twice each week, was superior to the one developed by Berlex, which was to be worn for an entire week, resulting in problems
`with adhesion and skin irritation. Nevertheless, experience held that the product that launched first gained a significant market
`share. Essentially, Noven was forfeiting the advantage it had with Ciba, whose first-generation transdermal product had a
`monopoly on the estrogen patch market, generating $125 million in North American sales. Moreover, other companies were
`coming out with second-generation transdermal patches, so that Noven would have an even more difficult time entering the
`market. As a result investors lost confidence in the prospects of the company and Noven's stock languished in the $8 range,
`after hitting a high of $19.25 the previous year. Because of sales to Europe Noven was able to double its revenues over the
`previous year, logging sales of $12.1 million, but the company's net loss also grew to nearly $6.6 million.
`
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`#

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`In December 1997 Noven hired a seasoned executive, Robert C. Strauss, who was named president and chief executive officer
`as part of a transition to new management in early 1998. Not only did Sablotsky step down from these posts, he promised to
`ultimately resign as chairman of the company. Prior to joining Noven, Strauss served briefly as president and chief operating
`officer at Ivax, following 14 years of holding various executive positions with Cordis Corporation. Under his guidance Noven
`began to take significant strides toward profitability, due in large part to the introduction of new products that Sablotsky had
`been instrumental in developing. The company received FDAapproval on the world'sfirst combination patch,one that joined
`estrogen with progestin for menopausal women. In the late 1990s Noven also in