A CDMO’s Small-Town Environment With Big-Time Operations

Originally published on 11/03/2017 at Pharmaceutical Processing, and appears in the November/December issue of Pharmaceutical Proccessing

By Meg LaTorre-Snyder

With multiple generations of employees, UPM Pharmaceuticals makes headway in the drug development space, specializing in oral solid dosage forms.

Based in Bristol, Tenn., UPM Pharmaceuticals specializes in drug development services from R&D through commercialization, including formulation development, cGMP manufacturing and packaging, analytical method development, testing, and inventory management and distribution services.

“We started at 56 employees in 2013. We’re up to 265 employees now,” said Jim Gregory, CEO of UPM Pharmaceuticals, in an interview with Pharmaceutical Processing.

Given the company’s current mailing address, it might come as a surprise to learn that the contract development and manufacturing organization (CDMO) didn’t always have roots in Tennessee. 


Founded in 1998 at the University of Maryland, UPM was formed after the university worked with the U.S Food and Drug Administration (FDA) on SUPAC management equipment addendum guidelines. Deciding to start an early-stage development company, the university opened the business as a public-private partnership — with the university offering services and lab space and private investors offering capital for operations.

Three years into the enterprise, the business was struggling. The dean of the University of Maryland School of Pharmacy was a board member and a former instructor of John Gregory, former CEO of King Pharmaceuticals and managing partner of SJ Investments.  John Gregory was a graduate of the School of Pharmacy and a benefactor to the school.  John decided to make an angel investment in UPM to help it grow.

In 2003, the company, still struggling, approached John for additional money. At that point, he decided to get his family’s management team involved. Jim Gregory became the president of UPM in January of 2005, after which point, the brothers collectively worked to grow the company.

“We slowly built it into a pretty solid early stage development company — grew it from 20 employees to a staff of 60 professionals in Baltimore,” Jim Gregory said. “We were in a 40,000-square-foot facility (8,000 square feet of cleanroom space) and were working for a lot of prominent companies in the United States as well as a lot of small companies.”

A Family Matter

With approximately over a thousand small, early-stage development companies in the U.S., UPM had to shift gears in order to be competitive.

“We knew we’d have to go to commercial-scale equipment and capability if we were ever going to grow as a CDMO. And we became interested in looking for commercially viable space,” said Gregory. Pfizer had acquired King Pharmaceuticals in 2011, and at the time a portion of King’s products were being made in the Bristol facility.

When Pfizer announced its intention to transfer all of the products out and shut down the facility, the Gregory brothers stepped in.

“My brothers and I considered that a tragic development,” said Gregory. “They’d been manufacturing pharmaceutical products at this Bristol site for 100 years. In March of 1917, S.E. Massengill started in a building on this campus, making his very first pharmaceutical products for distribution in the United States. Massengill ran the site until 1970. It was Beecham Group plc’s headquarters for 20 years. Beecham merged with GlaxoSmithKline and they were getting ready to shut down the facility.”

The Gregory family, which had acquired the Bristol manufacturing facility from a small, employee-based ownership group in 1994, took King Pharmaceuticals public in 1998 and subsequently developed King into a multi-billion dollar market cap company. The family stepped down from leadership of the Bristol operation in 2004, Gregory said.

But, when Pfizer was getting ready to shut down the facility after its acquisition of King earlier this decade, it was a perfect pairing of requirements.

“Pfizer wanted to get rid of the facility, we wanted a commercial-scale facility — so we were able to make a deal and move all of our CDMO operations from Baltimore down here to Bristol in a facility we were intimately familiar with. And we’ve been running it now for better than four years out of this facility,” he said.

UPM is one of the two businesses that make up Gregory Pharmaceutical Holdings, Inc. (GPH). NFI Consumer Products — a subsidiary of GPH that owns, markets, and distributes the Blue Emu pain relief analgesic product line and EPT (early pregnancy test kits) — is the second.

Scaling Up

Now operating in a 720,000-square-foot facility, UPM has two campuses. One is approximately 475,000 square feet, comprised of the manufacturing area that’s 250,000 square feet, as well as the labs. Fifteen blocks away, there is also a 250,000-square-foot distribution facility.

With a broad range of capabilities, UPM can take a company from about 100 grams of product all the way up to a metric ton of product.

“We can take someone at a very, very small scale and go with that product through scale-up to pilot plant size, later-stage larger clinical batches, all the way up to commercial-scale production. All of it done with scalable and fully instrumented capabilities,” said Gregory.

At the UPM facility, the company specializes in oral solid dose dry blend, dry granulation, and wet granulation formulations. For example, they have a mini Glatt system to handle wet granulation drying or fluid bed spray-coating capabilities at a small size. In addition, other Glatts can handle 2kg, 30kg, and as much as 300kg of production.

“It’s scalable and it’s instrumented every step of the way, which is what clients love to see,” he said, adding that the company has encapsulation, tableting, and coating capabilities as well. They also do a great deal of semi-solid production. “We can handle every step of the process for formulation development and analytical testing, including method development, method validation, raw material release, micro lab, and stability all the way through commercial manufacturing and packaging.”

UPM has had successes in formulation development with their technical team. For example, of the three oral peptides on the market of which UPM indicates it is aware, two were developed by UPM.

“We’re making one of the products commercially,” Gregory said. “It’s a very sophisticated development exercise we were able to accomplish at this facility.”

Ahead of Serialization Deadlines

“We are fully operational with serialization capabilities,” he said. “We’ve successfully serialized multiple commercial products.”

UPM has its hardware systems completely installed and validated and elected to work with TraceLink for the cloud.

“We’ve already serialized several of our clients’ products. We’re working with all of our commercial clients, and they’re all at some stage of moving forward with serialization,” he explained. “Certainly, with a number of these clients, the hysteria around November 2017 has calmed. But all of them are putting some energy into trying to get serialized as quickly as possible. Our full expectation is everyone will be serialized before the November 2018 deadline.”

According to Gregory, packaging services CDMOs, as a whole, are way ahead of the serialization implementation schedule.

“Since we’ve gone through so much of it ourselves, we’re hand-holding some of our clients in terms of what they need to be doing and try to help them move along, particularly working with their cloud provider to set up the serialized numbers they have to provide,” Gregory said. “I think, in fairness, it would have been pretty dicey for some of the people in the industry to hit November 2017, as sad as that is to say. I would be surprised if there is much of a problem by November 2018.”

Global Trends

“With all of the FDA’s concerns regarding manufacturing sites in India and China, we’re starting to see a shift back from pharmaceutical manufacturers from overseas,” Gregory said. Companies are more cautious about taking a product to China or India, uncertain if the FDA will shut down operations in a few years.

“There isn’t nearly that kind of problem in the U.S. We’re certainly seeing that shift back,” he said.

In addition, many large pharmaceutical companies continue to outsource products to CMOs and CDMOs. 

A Family Business

“This really is a pharmaceutical community in a small town. It’s a very unique business in that regard,” Gregory said. “They’ve been manufacturing pharmaceuticals here for 100 years. There are folks who literally started in this facility at 20 years of age and retired here at 65. You don’t see that anymore in America.”

Generations of employees have worked at UPM’s facility.

“We have a young lady who is in charge of our stability and product release group in the lab. When I first started here in 1995, her dad (who still works here) was a mechanic on the packaging line and she was a young teenager,” Gregory said. “You don’t see that in a lot of pharmaceutical companies where you’ve got multiple generations in the same facility and have been working here for 20 years.” 

Local Hiring

The company takes pride in the small town, family focused environment. According to Gregory: “We strive hard to promote from within and hire locally. We are a private, family owned, client focused business. It’s not just a tagline for the Gregory family. It is our culture and we try to bring that spirit to work every day for the benefit of our clients.”