JAMES R. WEERSING - IOMED - (IOX)
CEO Interview - published 12/18/00

DOCUMENT # LAE623

JAMES R. WEERSING has served as acting President and Chief Executive Officer of Iomed, Inc. since November 1998 and was named President and Chief Executive Officer of the company in January 2000. During this time he has created within IOMED the entrepreneurial focus and culture he practiced while founding and serving as President and CEO of many successful Silicon Valley-based medical products companies. Mr. Weersing has been Managing General Partner of MBW Management, Inc., a venture capital firm, since 1983. Mr. Weersing also serves as a Director of Ventana Medical Systems, Inc., a publicly traded medical diagnostics company. Mr. Weersing received a Bachelor of Science degree in Mechanical Engineering and an MBA degree from Stanford University.

Sector: Biotechnology

TWST: Could you give us a brief overview and a short history of Iomed?

Mr. Weersing: Iomed is a specialty pharmaceutical company that looks at pharmaceutical markets with substantial unmet medical needs where we can address specific problems using the combination of an ethical pharmaceutical and our proprietary active drug transport system. Historically, Iomed has been in the drug delivery portion of that business. Since I have become CEO, we have really transformed the company from one where the commercial paradigm was to try to find large pharmaceutical partners to fund the clinical development and do the commercialization and thereby collect royalties; to becoming an integrated business where we will develop and commercialize products ourselves as well as through partners. Therefore, we return to our investors the profitability that can be derived from being a pharmaceutical company and having greater control over our destiny. The interesting thing with Iomed is that in one of our areas of focus, local soft tissue inflammation, we’re already providing a medical product that has been used for a number of years for that indication. And we generate approximately $11 million in revenue from it while enjoying operating margins of 30%, which is a source of funding for our product development programs. The second primary area of focus is in delivering therapeutics to the back of the eye. That has become a market of significant interest. What we’ve done with the company in essence is turn it from a drug delivery company into a specialty pharmaceutical company that has identified two very large markets. Combined, these markets are in excess of $15 billion per year worldwide. We’re providing the clinical solutions to dealing with those unmet medical needs through a combination of therapeutics and drug transport technology that enables us to deliver the therapeutics in a non-invasive, site-specific manner.

TWST: What is on the agenda when you look out over the next 12 to 24 months and what would make that time frame a success for Iomed?

Mr. Weersing: Our plate is quite full during that time period. On the local inflammation side, we are in Phase III clinical studies with our ProDex™ product, which is a system that delivers the drug dexamethasone for the treatment of local inflammation, like tendonitis and tennis elbow. Dexamethasone is a potent and well-characterized drug, whose efficacy is very well known to the medical community. Our method of delivery brings dexamethasone directly to the elbow, the knee, the ankle, whatever is aching you, and does so in a very safe and effective way. We will have to complete those clinicals, and then we will submit a New Drug Application to the FDA. Meanwhile, we are developing a comprehensive sales and marketing plan for that product, and expect to launch ProDex in 2002. A year or so later we plan to follow that with a patient home-use product called IontoDex®. On the ophthalmic side, we recently signed our first collaborative development agreement with EyeTech Pharmaceuticals. Under the EyeTech agreement, we are working to develop a non-invasive drug transport system using an EyeTech compound to treat age-related macular degeneration. Initially, we will focus on establishing the general human safety of our ophthalmic application. We have demonstrated that we can deliver very important therapeutic drugs to the back of a rabbit’s eye in appropriate quantities in a way that appears to be safe, but we need to demonstrate similar safety in humans. Then we can flesh out the product offerings coming off that capability, both those that we’re going to be marketing ourselves and, in the case of certain proprietary compounds, those that will be developed with major pharmaceutical and biotechnology partners. We want our OcuPhor™ system to be the delivery system of choice for getting drugs to the back of the eye. If we can do all of that, in the next 12 to 24 months, we’ll be happy.

TWST: Give us an assessment of the management team, and then give us an idea of the bench strength, the skill sets that you have on board. What are the changes and additions that we might anticipate as you move into these new areas for the company?

Mr. Weersing: In terms of my experience, I have been building companies since the early 1970s, primarily in the medical products area. A number of these companies have done very well, and many of them now are either divisions of large pharmaceutical companies or are significant standalone companies, companies such as ATL in ultrasound, Lifescan in blood glucose monitoring, the hematology division of Abbott and several others. I have been fortunate to spend my career building enterprises that, on average, have done terrifically well. When I got involved with Iomed, I was fortunate to have a strong management team in place in two areas. Bob Lollini is as good a small company CFO as there is. Tim Miller, who runs our local inflammation business, has a broad range of experience in both pharmaceuticals and medical devices. We hired Steve Hamilton to run our ophthalmics program, Steve is a pharmacist who comes out of the pharmaceutical industry and is very experienced in sales, marketing, and business development. Within the last couple of months we have further broadened our pharmaceutical expertise. We have added Vice Presidents of Clinical and Regulatory Affairs, of Sales and Marketing and a Vice President to concentrate on the development of IontoDex, the patient home-use dexamethasone product. So we feel very fortunate that we have been able to add top-notch people. I think we’ve built and have in place much of the organization needed to carry out our strategy.

TWST: Is cash or capital a limitation as you look at these opportunities ahead?

Mr. Weersing: Not near term. If you look at our balance sheet, you’ll see that we have over $14 million in cash. We also have a business that generates about $11 million in annual revenues and contributes over $3 million in cash flow per year. We are inherently frugal and yet know where we need to spend money. I would think that within the next two to three years, yes, we need to raise capital to fund our commercialization activities. We would plan and orchestrate it so that we can also deal with the strategic investment problems that our current investors and prospective institutional investors have relative to our small float and limited liquidity.

TWST: What role might other technologies or market opportunities play in the future of this company?

Mr. Weersing: We are considering licensing or acquiring complementary products or technologies that would further serve the commercial objectives in our target markets in either local inflammation or ophthalmics. In addition, we will always consider other applications of our active drug transport technology in a manner that does not interfere with our other development programs and objectives.

TWST: What are the misperceptions that you encounter from analysts or potential investors?

Mr. Weersing: Over the last 18 months, IOMED has been in a transition from a technology-driven device maker to a market-driven specialty pharmaceutical company. However, we have an established business as a medical device manufacturer. I think where people can get confused is if they look at that established business and try to visualize it as a specialty pharmaceutical business, when that’s not what we’re doing at all. That existing commercial business provides a leverage for us, both in terms of cash flow and expertise. It generates cash flow to fund research and product development efforts, and it has established us as experts in the field of non-invasive, site-specific drug delivery. We are taking that expertise and coupling it with pharmaceutical expertise in order to take IOMED to the next level. We are building long-term value into IOMED’s growth strategy.

TWST: What would be the summary statement that convinces an investor to buy in?

Mr. Weersing: Look at where IOMED is valued today. The company has over $2 per share in cash and is not burning through it at biotech speed; we have a successful operating business and then look at what is in the pipeline. We are at the tail end of clinical studies for a new anti-inflammatory product, using proven technology, and are expecting an NDA filing next year. We have signed development agreements or are in negotiations with recognized, credible, and well-funded ophthalmic companies. We have an experienced management team, established manufacturing capability in place, and sales and marketing expansion underway. We believe that we have assembled the key elements — the building blocks of IOMED’s future success.

TWST: Thank you. (DA)

JAMES R. WEERSING
 President & CEO
 Iomed, Inc.
 3385 West 1820 South
 Salt Lake City, UT 84104
 (800) 621-3347 - Toll-free
 (801) 975-1191
 (801) 972-9072 - FAX
 www.iomed.com
 e-mail: jweersing@iomed.com

Each Executive who is the featured subject of a TWST Interview is offered the opportunity to include an Investors Brief or other highlight material to be provided and sponsored by and for the company.

To ask a question of this or any other publicly traded company, visit QAWire.com


Copyright 2000 The Wall Street Transcript Corporation
All Rights Reserved

The Wall Street Transcript (TWST) interviews are published verbatim, and TWST does not in any way endorse or guarantee the accuracy of any information or opinions expressed herein and all opinions are subject to change without notice. Nothing herein constitutes a solicitation to buy or sell any securities. TWST interviews with CEOs may include include "forward-looking statements", which are based on factors that involve risks and uncertainties. Actual results may differ materially from those expressed or implied. TWST shall have no liability whatsoever for any trading losses arising out of use of this information. Copyright 2000 Wall Street Transcript Corporation. All Rights Reserved.