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Chemist and Entrepreneur Tom D’Ambra ’78 Runs Counter to Type
By Donald N.S. Unger
Albany Molecular Research, Inc. (AMRI), the company that Tom D’Ambra ’78 co-founded in 1991 and of which he is currently chairman, president and chief executive officer, is in the midst of a counter-cyclical spending program: the economy may be down; AMRI is up. Other companies are being sold; AMRI is buying, as it has been for a number of years now.
At the company’s inception, D’Ambra had to think counter-cyclically in other ways—about time for example.
Like other startup companies, his had to scramble for space. The alternative he came up with: nearby Rensselaer Polytechnic Institute. But the labs were unavailable for use during the day. So he and his people cadged space in the labs from four or five in the evening until three in the morning.
It bears pointing out here, as well, that the choice for AMRI’s location has been a sound one, if not for reasons that might have been immediately obvious at the time of the company’s founding. The Albany-Schenectady-Troy area comes in third on the list of “Best Cities for Education,” in the most recent edition of the Places Rated Almanac, behind only Raleigh-Durham-Chapel Hill and Greater Boston. The list assesses the quality of the local mix of public and private elementary and high schools up through the range of colleges and universities—which is to say that it takes into account both the desirability of raising a family in these areas and the ongoing availability of highly educated potential employees.
D’Ambra might as easily have started his company in Boston. He earned his Ph.D. just across the river in Cambridge, at M.I.T. And—at that time and to some degree now as well—what AMRI was doing might also be seen as counterintuitive, as well as counter-cyclical. Chemistry was coming to be seen as the dowdier sister to genomics and molecular biology. If one were going to form a startup company, why go for “old” science, rather than new? Surely, it was becoming clear that the future lay in gene therapies, genetic engineering and the like—That’s where the big bucks were going to be, right? Perhaps.
But that future has stubbornly remained the future, and chemistry has stubbornly refused to die. And AMRI, which provides contract chemistry research and development services to the pharmaceutical and biotech industries along with small-scale manufacturing—though getting larger all the time—has benefited from a variety of trends along the way—as a rapidly consolidating drug industry has often found it more efficient to outsource rather than to do a variety of things in-house.
Along with the outsourcing trend, another engine for growth has been revenue from commercial products, prime among them the patents that AMRI holds on the active ingredient in the phenomenally successful antihistamine Allegra.
“In 2002,” according to D’Ambra, “AMRI received approximately $51 million,” from these patents, and, “AMRI has received over $165 million from Aventis since 1998.”
Currently, there is patent infringement action pending, which may have an impact on this revenue stream.
“Should Aventis [Allegra’s manufacturer] prevail, as I believe they will,” D’Ambra adds hopefully, “then Allegra royalty payments will continue for at least another decade. Time will tell.”
On the broader front, however, D’Ambra’s optimism about the company’s future is quite strong. On a 10-year time-line, here’s what he sees:
“Growing our platform of contracts and collaborative relationships, we’ve set a goal to grow from a company that had $150 million in contract revenue in 2002 from AMRI and Organichem [their most recent acquisition] combined, to a company generating one billion dollars annually in a 10-year time frame. At the same time, leveraging our R&D know-how and resources, we also expect to generate more Allegra-type royalty opportunities in our future. I believe we have an opportunity to become a very large and very successful company. It doesn’t happen overnight, but this is what we are aiming for.”
This is by no means from a standing start, of course. In the year 2000, Business Week ranked AMRI fourth on its list of Hot Growth Businesses. In October of last year Forbes listed it as the 16th best small company in the nation. And this is by no means a complete list of lists.
The advantage of counter-cyclical spending, of course, of having both the confidence and the capital to buy when others are selling—and when prices are therefore lower—is that you are well positioned to profit when the market rebounds.
D’Ambra concurs. “In the last four years, AMRI has made a number of acquisitions, particularly of companies with technologies and capabilities that can bring high value-added returns or have broadened our range of technologies for drug discovery and development. Although the economic environment is weak, AMRI’s growth and acquisitions strengthen our leadership position and put us in a position of great opportunity for the next up cycle, when it comes.”