Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010 - (Page E15)

May 3, 2010 CRAIN’S DETROIT BUSINESS Page E15 25 Companies to Watch: Health Care/Biotech Rockwell dialysis drug nears market Rockwell Medical Technologies Inc. Location: Wixom Local employees: 100 2009 revenue: $14.8 million. Founded: 1995 Founder and CEO: Rob Chioini 25 Mainstays Bedrock businesses of Southeast Michigan Why it’s one to watch Poised to move from R&D to high-margin drugmaker ixom-based Rockwell Medical Technologies Inc. (Nasdaq: RMTI) is poised, finally, after years of research and development, to make the leap to becoming a maker of proprietary, patented high-margin drugs. Since its founding in 1995 by President and CEO Rob Chioini, Rockwell has supplied hospitals and dialysis centers with the materials needed for dialysis equipment to filter the blood of patients with kidney disease. The business began in Ferndale as barely more than a oneman operation making and selling dialysis kits. To help with early production, Chioni hired his mother and younger brother. In 1996, the business moved to Wixom and began morphing into a maker of the acid and bicarbonate powders needed to help filter blood. Rockwell has large competitors. German-based Fresenius Medical Care AG, which has the largest market share of the dialysis market, makes its own chemicals and has no need to buy product from Rockwell, W GLENN TRIEST Rockwell CEO Rob Chioini expects to get approval in June to begin Phase 3 trials of a drug that will help control red blood cell production, a benefit to people undergoing dialysis and suffer from anemia. which went public in 1998 and for much of the time since then has been working on a business model that would open up the Fresenius market, as well. The key? A drug called soluble ferric pyrophosphate, which Rockwell licensed worldwide from Dr. Ajay Gupta, then an associate professor at the University of California-Los Angeles. He invented the process of using a slow intravenous infusion of SFP to boost iron levels and is now is Rockwell’s chief science officer. Patients undergoing dialysis generally suffer from anemia, and current methods of treating it, such as erythropoietin, are expensive and only marginally effective. EPO is a hormone that controls red blood cell production and is better known as a performance-enhancing drug for sprinters and bicyclists. SFP, a much cheaper alternative to EPO, has shown promise in trials. Last year, the company finished Phase 2 U.S. Food and Drug Administration clinical trials of the drug, which consistently boosted iron levels in dialysis patients. Chioini expects to get approval in June to begin Phase 3 trials, which could start by the end of the year. The trials, which will involve about 500 patients at about 150 sites in the U.S., will last up to a year. If those results mimic the results of the smaller Phase 2 trials, the company could file for a new drug application in 2012 and begin selling SFP in 2013. Not only would that give Rockwell a high-margin drug to sell to current customers, it would open up Fresenius as a potential customer. That company could either buy SFP from Rockwell or license and make it. If Phase 3 trials are successful, Rockwell plans other uses for SFP, such as in oral prescriptions, nutritional supplements and peritoneal dialysis, a promising form of dialysis that can be done at home and uses the membrane that surrounds the abdominal cavity to filter waste from blood. Chioni said the company is currently in negotiations to license its SFP technology in Japan and Europe and thinks agreements will be reached before the end of Phase 3 trials. Last year, Rockwell boosted annual revenue from $13.5 million to $14.8 million, and cut losses from more than $3 million to $549,781. Chioni expects revenue to climb by at least 10 percent this year. The company employs about 350, including about 100 at its Wixom headquarters and manufacturing plant. It also has manufacturing facilities in Texas and South Carolina. Chioni hopes to add a fourth plant later this year and grow total employment by up to 100 over the next year. One advantage Rockwell has over the vast majority of biotechs hoping for approval to begin selling their first drugs? It already has distribution channels in place and existing customers nationwide. — Tom Henderson Masco Corp., Taylor Armenian immigrant Alex Manoogian began Masco as a screw products company six weeks after the stock market crash in 1929. He spent the next several years building up contracts with automakers, taking the company public in 1937. The company grew through auto and defense work until 1954, when it landed a contract to make parts for a single-handle faucet — which turned out not to be well designed. Manoogian bought licensing rights, improved R. Manoogian it and Delta Faucet was grossing $1 million for the company by 1957. The company, now chaired by Richard Manoogian, Alex’s son, is the largest U.S. faucet manufacturer. Alex Manoogian died in 2006 at age 95. Penske Corp., Detroit Roger Penske’s Detroit-based conglomerate includes investments in racing, trucking and logistics and car dealerships, but what also vaults the company into prominence is Penske’s emergence into civic leadership since chairing the Super Bowl XL Committee. (For more on Penske, Penske see Page 33.) Quicken Loans Inc./Rock Financial, Livonia Founder Dan Gilbert became an entrepreneurial success story twice with his online mortgage company: First selling the original Rock Financial in 1999 to Intuit Inc. for about $336 million, and then buying back the company, now called Quicken Loans, in 2002 for about $130 million. It continues to do business under the Rock name in Michigan. Gilbert plans to join Gilbert the ranks of downtown employers this summer when he moves about 1,700 employees from Livonia to the Compuware Building. (For more on Gilbert, see Page E33.) Youngsoft, H2H Solutions predict double-digit growth H2H Solutions/Youngsoft Location: Wixom Local employees: 205 2009 revenue: $19 million Founded: 2001 Founder and CEO: Rupesh Srivastava services to a variety of industries to help them comply with the Health Insurance Portability and Accountability Act of 1996, which addresses medical privacy and established national standards for electronic health care transactions. Some of Youngsoft’s customers include CMS Energy, Comerica, Boeing, AAA and Srivastava Wells Fargo. But when business slowed for Youngsoft, Srivastava formed H2H Solutions in 2001 to specialize in the growing IT needs of health care companies. In 2007, H2H rolled out an electronic prescribing product, Digital Rx, which is helping health care providers order prescriptions and track drug interactions for patients. Physicians are receiving bonus payments from Medicare to use e-prescribing through 2011, but they will be penalized starting in 2012 for not using the technology. “The last couple years we have invested a lot of money in technical products and we are starting to see the payoffs to that strategy,” Srivastava said. “We have growth plans and may start acquiring companies.” Because of fast-paced sales, Srivastava said 10 to 20 new employees are expected to be hired at both companies during 2010. Since 2005, Youngsoft and H2H have grown to 205 employees from 150, with 80 percent of his new hires former auto industry engineers. Despite slow growth in Southeast Michigan the past two years because of the economy, Srivastava said national sales are strong and he projects combined revenue for Youngsoft and H2H to more than double from $22 million this year to more than $50 million in 2013. Michigan accounts for 70 percent of revenue for H2H, with clients that include Blue Cross Blue Shield of Michigan, Health Alliance Plan of Michigan and Priority Health. Some 40 percent of revenue for Youngsoft comes from Michigan-based clients, Srivastava said. H2H has a multi-prong sales strategy for its Digital Rx e-prescribing program, said Milan Popovich, chief marketing officer. “We knew as a small company we were not going to field a sales force to knock on physician doors, so we decided to seek out integration partners,” Popovich said. Because many electronic medical record programs don’t include an e-prescribing module, H2H has struck deals with EMR and practice management vendors to include Digital Rx in their products, Popovich said. Some local vendors include NextStep Solutions Inc. in Rochester and Technimed in Clinton Township, he said. Popovich said H2H also sells Digital Rx as a standalone program to physicians who are not ready to invest in a complete electronic medical record. H2H also is developing a new program to help insurers test a new medical claim form that goes into effect in 2012. — Jay Greene Why they’re ones to watch Opportunities abound in health care IT he hunger of health care companies for information technology to improve efficiencies or comply with myriad government regulations is propelling sales and hiring at Wixom-based H2H Solutions, said CEO Rupesh Srivastava. “We have more than doubled our revenue in the last three years and sailed through the whole (poor economy) phase very nicely because of the need for our products and services,” said Srivastava, who moved to Michigan 17 years ago from his native India. Srivastava also founded Youngsoft in 1996 to provide IT Plante & Moran L.L.P., Southfield Sixty year after its founding Plante & Moran carries the Golden Rule as one of six core values listed on its Web site, values attributable to its co-founder Frank Moran, who died at the age of 78 in 1997. Those values and a string of innovative practices have serviced the firm well. It is the largest accounting firm in Michigan with more than 1,100 employees statewide and second-largest in metro Detroit with 840. Among other things, the firm diversified beyond audit and accounting work in the 1960s and hired a psychologist in the 1950s to help in hiring employees who would fit well in the firm. More Mainstays on Pages E9, E11, E13, E19 and E20 T

Table of Contents for the Digital Edition of Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010

Crain's Detroit Business 25th Anniversary
Looking Forward
25 Companies to Watch
25 Mainstays
25 People Then and Now
25 Scandals and Dubious Deeds.
25 Philanthropic Gifts
25 Newsmakers of the Year
25 Big Stories
25 Innovations
25 Gone But Not Forgotten
Health Care
Defense
Suppliers
The Internet and Communication
Energy
Finance
Signs of the Times

Crain's Detroit Business - 25th Anniversary Issue, May 3, 2010

https://www.nxtbookmedia.com