Entrepreneur Paul Dorman could have retired, but there's this one thing: "This is what I do for fun," CEO of the Fort Worth biotech firm DFB Pharmaceuticals, says with a smile, not really joking.
Dorman, a longtime pharma executive, quit his job at 42 and founded DFB with the purchase of a contract manufacturing plant owned by Alcon Laboratories. He grew sales 22 times to more than $400 million, then sold most of his units, realizing more than $2 billion in proceeds. He kept a few small pieces, including a company called Phyton Biotech that makes anti-cancer drugs.
Then in 2015, he founded a company called NanOlogy that's developing a new way to administer chemotherapy: nanoparticles made of anti-cancer drugs, suspended in saline and injected like a shot directly into tumors. The nanoparticles wedge themselves into the tumor and reside there for weeks, killing cells for much longer than traditional intravenous treatment.
And because they're in the tumor, don't contain the toxic solvent used to dissolve chemo drugs before IV administration, and aren't flowing through the blood system indiscriminately, the new delivery method allows injections at higher levels without side effects like hair loss and nausea, Dorman said.
At age 81, can he get this done in his lifetime? "I think we have a chance by the end of 2019-2020, to have some products in the marketplace," Dorman says.
The nanoparticles are made of paclitaxel or docetaxel – decades-old chemotherapy drugs made by Phyton and already proven effective and approved by the Food and Drug Administration. Paclitaxel has been sold under various brand names including Taxol. Results in human clinical trials on nanoparticle treatment have been encouraging, Dorman says.
"We're developing some very interesting delivery technology; we're seeing some very positive and surprising results that weren't expected," Dorman says. "We're bringing in some experts right now to make sure that we understand what's happening and the potential of what's happening. But we're all very excited about it. If we continue to have results we are seeing, there may be some opportunity for accelerated pathways approval with the FDA. It's a little early, because it's unprecedented to have this situation where the drug's already approved. Additionally, we hope to show the FDA that, going into the tumor with a higher level of nanoparticles, we haven't increased the side effects. In fact, we decrease the side effects."
Additionally, the team – working with development and manufacturing groups in Germany, Canada, and Kansas and a California company that's running the trials – is getting some "unexpected positive results" in how immune systems are responding. "We believe we're getting some very positive reaction from the immune system to help the chemo drugs in killing the tumors," Dorman says. "And that was surprising to us. We're still developing an understanding of that."
The group has been carrying out its work quietly. Dorman has taken on a significantly higher profile lately with his philanthropy, committing last year to paying the first-year tuition for the 60-student inaugural class of the new TCU and UNTHSC School of Medicine, opening next year in Fort Worth. The gift is estimated to total $3 to $4 million. Dorman is among prospective donors who"ve been offered the opportunity to name the new medical school for $50 million.
"I have an interest, a strong interest in this opportunity, but the immediate short-term commitment is just the first-year tuition; I'm spending a considerable [amount] of my personal money on cancer research," Dorman says, estimating he's invested "tens of millions and growing" in animal and clinical trials. "We have a large number of programs in animal and human clinical trials right now. That's my first priority."
How to commercialize if the FDA gives the green light? Dorman says he's working on a different business model.
"In the past, I've built organizations, developed our own sales force, and developed internal managers and all of that," he says. "That takes a lot of time. If this works the way we are thinking it's going to, I think we have a duty to get it out into the people who need it, as quickly as possible. I think I'm going to do a different business model here. I'm going to sell or license to a larger company that already has a sales force on a worldwide basis."
Dorman, who's lost friends to cancer, doesn't expect the nanoparticle medication to be very expensive. "What we're doing is taking one of the most widely used drugs in the world and making it into nanoparticles," he says. "That's a patented technology process, but it's not an ultra-expensive process." Patents have run out on paclitaxel and docetaxel -based products, and those drugs are in the market today as generics. "We'll be positioned a little higher than those generics, but significantly less than the immunotherapy drugs which everybody is excited about right now."
As an engineering student at Tulane University in New Orleans, Dorman had to work his way through school because his father had just bought a business and was able to only pay his son's first-year tuition. Dorman got a night job at an oilfield equipment business, which shifted some daytime work to night for its new employee. "I was really able to see the value of somebody helping somebody to help themselves," he says. Dorman earned his law degree from Loyola University in New Orleans, working a full-time job during the day and going to school at night and becoming fascinated by patent law.
At 42, working in management for Johnson & Johnson in Arlington and El Paso and, among other responsibilities, having relocated manufacturing plants for the company, he went off on his own, buying a plant in a third-party manufacturing plant in San Antonio owned by Alcon. Dorman used that company, which made topical skincare products for clients including the predecessor of the giant Galderma, as a launch pad for products in wound and skin care and other segments. Among the Fort Worth companies that Dorman launched, grew and sold: HealthPoint in wound care, Coria Laboratories in dermatological products, and DPT Pharmaceuticals.
Dorman had lined up a lender who agreed to finance his plant purchase. Then an investor offered better terms, Dorman says. "They wanted a warrant that allowed them to buy an equity interest in the future. I had a financial partner, a silent partner. That person has continued to be involved with me to the day, 28 years later."
Dorman grew his business from the San Antonio plant's $18 million in annual sales and 140 employees to more than $400 million and 1,800 employees. In 2008, he sold the dermatological business to Valeant Pharmaceuticals for $90 million. In 2012, he sold the wound care business to Smith & Nephew for $780 million. The same year, he sold 70 percent of his original business – DPT Pharmaceuticals – for $180 million. And recently, he sold half of his 30 percent remaining stake in DPT for $950 million. "These are all good prices," Dorman says.
After the sales, Dorman says he "was thinking of retirement." Phyton "wasn't very large enough to sell," he says. "I thought I could at least keep it for a while and find ways to grow it and then sell it later on. I kind of went into semi-retirement for a brief period of time. That didn't last very long."
Dorman came across the nanoparticle technology, and he acquired the worldwide rights for oncology from its inventor. Phyton launched NanOlogy in 2015 and started doing tests with animals, and those results were very encouraging, Dorman says.
NanOlogy has largely completed a number of trials as part of the FDA's three-phase approval process, showing safety and developing the dosage level in working with human subjects. It's moved onto the Phase 3 proof of efficacy and side effects, Dorman said. Phase 3 involves a large clinical trial where the product proves whether it's effective. Generally, the entire process can take years. "The FDA has been very supportive," Dorman says.
NanOlogy is into Phase 2 trials with prostate, ovarian, and pancreatic cancers; has finished animal work with lung and bladder cancer; recently began animal work on kidney cancer; and is working on metastasized skin cancers, Dorman said.
Direct injection of traditional chemotherapy has been tried before but not with pure, solid nanoparticles. "When we first started talking to the oncologists about going directly into the tumor, they said, "Well, we looked at injection of liquids years ago,"" Dorman said.
Using nanoparticles, the drug stays in the tumor for about a month, compared to up to 24 hours for IV chemotherapy, Dorman said. "As much as they put into the veins, only a small percent of that actually gets into the tumor," he said. "The drug goes all over your body."
NanOlogy is finding a "very minimal amount" of its nanoparticle drug leaks into the bloodstream. "It stays in the tumor for weeks, it starts acting like the cancer cells and starts migrating," he says. "It may get into the lymphatic system, which is a positive thing, because that's how the cancer spreads. It may impact the spread of the cancer. It has that potential."
The team includes as many as eight employees in Fort Worth; US Biotest in California, running the clinical trials nationally; and a group from the University of Kansas. Phyton is manufacturing the active ingredients in Germany and Canada and shipping them to Kansas, where a company called CritiTech is converting the drug into nanoparticles. Phyton has secured patents, including ones on how to make the nanoparticles, their concept and shape. The nanoparticles are shaped like rods, Dorman said, so they don't work their way out of the tumor. "We're developing an extensive patent portfolio," he said.
Even though his companies are privately owned, Dorman has long employed an outside board of directors, comprising mostly pharma executives. "If you want to do something and you can't convince a learned group that this is something you should do, then you really ought to step back and question yourself," he says.
Dorman sees other potential uses for nano technology, including a topical application to reduce wrinkles and even a topical insulin application beneath the tongue for diabetes patients. Dorman expects that would enable diabetes patients to avoid insulin shots.
"It's very exciting, very exciting," he says. "If it doesn't work, we made the good try. But I don't think it's a question in anybody's mind here that it works. It's just how much better is it going to be than anything else."
DFB Pharmaceuticals Family Tree
Entrepreneur Paul Dorman founded DFB Pharmaceuticals in 1990 with the purchase of Dermatological Products of Texas from Alcon Laboratories. He and its principals have since sold several business units at sales prices totaling more than $2 billion.
DPT Laboratories
Contract pharma development and manufacturing
2012: Sold majority interest to Renaissance Pharmaceuticals for $180 million, kept 30 percent. Recently sold half of that 30 percent for $950 million.
HealthPoint Biotherapeutics
Leading pharmaceutical company in wound care products, founded 1992 by DFB
2012: Sold to Smith & Nephew as basis for Smith & Nephew's biotherapeutics platform for $780 million
Coria Laboratories
Dermatology company with a portfolio of drug and OTC products
1994: Founded as a division of HealthPoint, established as a separate company 2001
2008: Sold to Valeant Pharmaceuticals for $90 million
HealthPoint Surgical
Developed and commercialized a portfolio of surgical antisepsis technologies
2010-11: Licensed USA marketing rights for three product lines
2017: Established a startup in China
Phyton Biotech
One of world's largest producers of paclitaxel and docetaxel generic anti-cancer drugs
NanOlogy
Developing nanoparticle delivery method for chemotherapy drugs
