| Inc. magazine
Oct 1, 2010

PharmaJet Finally Gets Unstuck

 

It was one heck of a recovery. Since that episode, Royals has been invited back to São Paulo to train nurses in using the PharmaJet system for H1N1 vaccinations. And PharmaJet, in a program funded by the global health care nonprofit PATH, is performing measles-mumps-rubella vaccinations in Brazil.

Indeed, 30 years after the AIDS crisis first hit, thanks to PharmaJet and a handful of other small companies, needle-free technology "is taking off, finally," says Bruce G. Weniger, a physician and vaccine expert who recently retired from the Centers for Disease Control and Prevention in Atlanta. Weniger got his own flu shot last fall via a PharmaJet injector and says, "It didn't feel like much of anything."

PharmaJet's focus on selling to developing countries has its roots in Kathy Callender's childhood. She was raised in Gary, Indiana, where her father, Joseph Finerty, was mayor during World War II and after the war a homebuilder. When construction stopped for the winter, Finerty would take his wife and two daughters south, living November to April on a 40-foot cabin cruiser, a block of ice for a refrigerator. Kathy's mom, a former science teacher, homeschooled the girls.

The family often docked for long stretches in the Bahamas. It was decades before the casino-resort boom there, and a family of white Americans was unusual. Kathy and her older sister, Jean, fished and played with local kids. "The children didn't have shoes," Callender says. "Simple little houses with tin roofs, no glass in the windows. I was comfortable there."

Later, married in Colorado and expecting her first child (Heather), Callender was delighted when her husband, Sam, joined Rotary International and signed the young couple up to host foreign students. They boarded youngsters from 29 countries. The Callender kids would end their day in the exchange student's room, hearing stories of life abroad. All three of Kathy and Sam's kids married non-U.S. natives and live outside the country. "I raised my kids to be global citizens," Kathy says.

Sam built his orthodontia practice up to three offices. By the mid-1970s, he needed help. "Kathy, I think someone's embezzling from us," he told his wife. As her first assignment for the practice, she dug into the finances and sniffed out the culprit. After confronting the person, Sam and Kathy decided to give the worker another chance. "Oh, she cried and cried," Kathy says. "Then she did it again. We were so stupid." The worker was fired, and Kathy had gained some toughness.

By the mid-1980s, Kathy and Sam were taking time to do relief work in Honduras. "We had horribly abscessed dental surgery from morning to night," Kathy says. "Sam and I both had needle sticks there. You're tired at the end of the day. That's when needle sticks happen."

They slept on hut floors. "You become part of the village," Kathy says. "For me, that was the defining moment. The developing world is my passion."

Sam sold his practice in 2001. In the years leading up to the sale, he and Kathy were wondering what was next. Their youngest, Todd, was in law school and was doing an internship in Orange County, California. He met a local inventor, Jerald Umbaugh, who had designed a spring-loaded needle-free injector. Umbaugh had a rough mockup of it in his shop.

Billions of vaccinations, and here's the better mousetrap, thought Todd, who knew about his parents' needle sticks. He brought them out to meet Umbaugh, who operated a small injection-molding shop in Santa Ana. Kathy and Sam knew a needle-free injector could help reduce the spread of HIV and hepatitis; they also thought they could make some money. They decided to finance Umbaugh, with Todd managing the investment. The Callenders ultimately spent about a quarter of a million dollars.

A year in, the parties weren't getting along. "He was missing deadlines," Todd says of Umbaugh. "Pig studies -- he wasn't doing them, it turned out, because the device didn't work." Todd asked Kathy to scour Umbaugh's books. She spent two days in Umbaugh's office, in the front of his molding shop, turning over every piece of paper. "I went through his books," says Kathy. "Show me. Show me the mold. Show me the plunger. I found out it wasn't right." She came to believe the Callenders' money had been mixed in with Umbaugh's other projects.

"That's what she was finding," Umbaugh, 66, tells me over the phone. "My bookkeeping was bad." For the project's lack of progress, though, he blames the Callenders' tightfistedness. "They nickel-and-dimed me," he says. "That meant every step I took was clumsy."

Todd, by then a lawyer, came around with an ultimatum that Umbaugh says he quickly accepted: "Fine, you won't sue me. Here's my stock. You take it." Some harsh words were exchanged, but Umbaugh says he parted company impressed by Kathy Callender. "Kathy is really the business brains in that family," he says. "She is the reason that family has money."

I asked Todd, who lives in the Bahamas, how it felt to be bailed out by his mom, and he answered with a question: "Did she sound mad at me? I'm not as acute a businessman as my mom is."

It had all seemed so easy to him in the beginning. "The business plan in my mind was, Let's get this thing working and sell it off to a big pharma company," Todd says. "Or the lawyer in me: Let's hope like hell someone infringes, and we'll sue." On that basis, the Callenders should have cut their losses. But Kathy's vision went beyond a quick score. Todd backed away. Kathy took over.

It would be a long slog. As owners of intellectual property for a needle-free-injector design, the Callenders were hardly alone. At least half a dozen competing designs were in development or on the market. Needle syringes entered wide use in the 1800s, revolutionizing health care, but from the beginning, people didn't like getting shots. Today, as much as 10 percent of the population may be severely averse to needle shots. Many physicians and others assume needlephobes are simply being wimps. But some people faint getting an injection. Others feel the pain of the needle intensely. And some are so frightened by needles that they forgo medical care altogether, endangering their health.

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