Mikhails have 'huge' plans to develop pharma operation in Windsor

Wednesday, July 10, 2019

The Windsor Star/Brian Cross




A Markham-based pharmaceutical company with Windsor owners plans to expand here with a $25-million project that could initially create up to 100 jobs, with the potential for hundreds more on the horizon.

“We’re expanding our pharmaceutical group in the Toronto area and we need to double the size. So we chose Windsor for the second location, hopefully,” local developer Joe Mikhail of Mikhail Holdings said Tuesday. He cautions, however, that the move still needs approvals and incentives from the federal and provincial governments.

A company owned by Mikhail brothers Joe, John and Lou has bought a seven-acre former manufacturing plant in the 2600 block of Howard Avenue with 90,000 square feet of space to accommodate the new Pancap Pharma Inc. operation as well as a Pancap subsidiary that’s developing an environmentally responsible tampon.

Mikhail said the benefits to the city would be incredible.

“Effectively, what we’re doing is we’re bringing an absolutely new industry to the City of Windsor,” he said, referring to the research, development and manufacture of prescription medicines.

“The more important thing is we aren’t getting blue-collar workers. We’re getting scientists. We’ll be dealing with the university, we’ll be bringing in university students and working with their chemistry labs.”

Pancap, in operation since 1993, makes prescription medications called pancreatic enzyme products — primarily for cystic fibrosis patients — on contract to brand name pharma companies. It’s the exclusive manufacturer of a Merck product called Cotazym and is intent on further expanding and marketing its products in the U.S. market, according to the company.

Pancap is owned by a numbered Ontario company which is owned by the Mikhail brothers. They’ve applied to the city for financial incentives under Windsor’s economic revitalization community improvement plan. A report from city staff going to council’s development and heritage standing committee on Monday recommends approval of grants that effectively pay back any municipal tax increases at the Howard Avenue plant for up to 10 years.

Joe Mikhail, a local developer, said he recently paid $35 million for a large plaza on Walker Road. “That $35 million means nothing compared to what the capsule business will give to the city. This is huge,” he said.

The Pancap Pharma operation will take up 50,000 square feet, with a clean room, warehouse, laboratory and office space at a renovation cost of $3 million. But the Mikhails’ plan includes establishing a Pancap Pharma subsidiary, Bio-Tam, in the remaining 40,000 square feet at a cost of $1 million.

Bio-Tam’s potential is a “much, much bigger story,” said Mikhail.

Three years ago, while making capsules, he said the Pancap people had a technological breakthrough in development of a potential new capsule material — a plant-based material that dissolves in cold water in a short period of time.

The new material was never used for capsules, but it has been patented worldwide with plans to use it to replace the plastic applicators for tampons. Mikhail said it takes 28 years for a plastic applicator to dissolve, and they’re often flushed down the toilet and ultimately pass through the water treatment process and end up washing up on beaches.

The new patented material dissolves in two hours, 32 minutes, he said, “so it’s gone before it gets to the water treatment plant.”

After approaching the major tampon manufacturers, Mikhail said one of them entered into a research and development agreement to have his company develop a tampon product. The firms have shied away so far from the added cost of 1.3 cents per unit or 40 cents per package, said Mikhail.

He believes, however, that the tide is changing, that the recent public outcry over the environmental problems associated with plastic straws indicates that women would be willing to pay a little extra for a product that’s better for the environment. He wants to see the tampon operation — for research, development and manufacturing — established in Windsor.

“That’s Phase II,” he said, predicting that many hundreds of jobs could be created, because the Mikhails own the patent and no one else can use it.

“That’s the big goal here, that’s the billion-dollar gain.”

By opening both operations in Windsor, he said there will be available space to bring in the big machines required to manufacture tampons. The Bio-Tam operation will also have access to Pancap’s R & D expertise as it develops the product and refines the manufacturing process to bring costs down.

“I’ll basically be leveraging my quality control people, my production people and having them wear two hats while we’re in there,” he said. “I couldn’t do that in Markham because the facility was too small (18,000 square feet). This one will allow me to do it.”

Yet, while the State of Michigan has offered “everything under the sun” to entice the companies to set up there, “what Ontario has given us is pittance,” said Mikhail. Still, they intend to set up in Windsor because this is home and they’re Canadian.

“We think we owe something back to the community,” Mikhail said.