When many pharmaceutical companies win federal approval to market a new drug, they rush out predictions of potential riches for investors. Not so with Danco Laboratories LLC.
"A lot of what we're about is not driven by the profit motive," explained Richard Hausknecht, medical director of the firm, which just received permission to market the abortion pill known as RU-486.
"I'm not in this to get rich, because it's not going to make me any money," said Hausknecht, who said he is paid by the hour for his part-time work at Danco. "Here's a chance to offer to American women a real new option, something that has been denied to them for political reasons for 15 years."
Secretive and obscure, Danco is one of the most enigmatic companies in the pharmaceutical industry. It has worked for years and spent millions of dollars to bring to market a drug that investors knew would immediately face intense resistance--and they feared possibly violent intervention--from people opposed to abortion.
Danco has only a handful of employees. For security reasons, company officials say, Danco's telephone number is unlisted and the details of its whereabouts are carefully guarded. Company officials will say only that Danco is housed in an ordinary suite of offices somewhere in midtown Manhattan.
They say Danco intends to make a profit eventually. Its immediate plan is to make RU-486 available in the United States within a month as an early alternative to surgical abortion. The cost of the procedure, which includes two drugs and three office visits, is expected to be about $300, around the same as a surgical abortion.
The company also intends to research the possibility that the drug could also be a treatment for ovarian cancer and other life-threatening ailments.
Food and Drug Administration officials agree that Danco is not the usual pharmaceutical company. The agency "followed all normal" procedures in approving the drug, including inspecting the manufacturing facilities, officials said. But regulators determined that information about the manufacturer was confidential under statutes governing trade secrets and freedom of information.
FDA Commissioner Jane E. Henney said the agency broke with precedent by not publishing the names of the experts who reviewed RU-486 for the agency. In another first, it did not publish the name or location of the company that will manufacture the drug.
Some antiabortion activists fear that because of Danco's secretive approach, it will not be held accountable the way other drug companies have.
"This company seems rather clandestine and, I believe, suspicious," said Judie Brown, president of the American Life League, an antiabortion group based in Stafford, Va. "Women should be able to know immediately who the provider of a particular product is."
Danco has a close relationship with the Population Council, a nonprofit reproductive-rights group that sponsored the drug for approval. In 1994, the Population Council was given the rights to sell RU-486 by French drugmaker Roussel-Uclaf SA, which was put off by the controversy surrounding the drug in the United States.
The council, supported by the Buffett Foundation and others intent on making abortion more accessible, in turn gave Danco the rights to manufacture and distribute the drug.
According to records filed in Delaware on Feb. 7, Danco was formed in the Cayman Islands on July 25, 1995. On those papers, Hausknecht was listed as vice president--a formality, he said, that lasted only a week.
Apart from some basic facts, company officials are chary with details about Danco's structure, its investors and its plans.
The chief executive is Roy Karnovsky, a former marketing executive for the Merck Human Health Division of Merck & Co. Through a spokesman, he declined to discuss the company.
Medical director Hausknecht is an associate professor of obstetrics and gynecology at Mount Sinai School of Medicine in New York. He also serves on an advisory board for Planned Parenthood and was the medical director for Planned Parenthood of New York City.
Danco's director of public affairs is Heather M. O'Neill, who has helped prepare materials for FDA hearings about the drug. O'Neill, a graduate of Harvard University's John F. Kennedy School of Government, previously worked as a consultant at the Population Council.
O'Neill, who joined Danco in 1997, declined to provide the names of individual investors. But she acknowledged that supporters generally share the company's desire to make RU-486 available.
Instead of talking about company profits, she refers to its "project."
"Everyone here is committed to this project, to making Mifeprex [the trade name for RU-486] available to all women," she said. "We've been singleminded in our determination in making Mifeprex an option American woman can have."
"It's extremely unusual," Kevin Schulman, director of the Center for Clinical and Genetic Economics at the Duke Clinical Research Institute. "Only people who are truly dedicated to 'the cause' would have stuck with it. The unique thing here is how everybody [involved] has a shared vision."
O'Neill said the company may eventually try to market RU-486 abroad but has no plans to do so now. "We, I think, would be interested in looking at certain other countries around the world," she said.
She said the company will soon have a higher profile at medical conferences and will begin providing educational material on how to use the drug safely and effectively.
The fact the manufacturer is not named would not prevent someone from filing an RU-486-related lawsuit. The target would be Danco, O'Neill said. "Danco is responsible for all aspects of the drug's introduction into the United States, from FDA compliance to manufacturing, marketing and distribution," she said.
O'Neill acknowledged that crucial financial support over the past decade came from several foundations.
The Buffett Foundation, which was begun by investor Warren E. Buffett and places a strong emphasis on reproductive issues, made at least $2 million in interest-free loans to the Population Council, according to tax documents filed in 1995. That money was in turn used to conduct clinical trials of RU-486.
One of Danco's main backers has been the David and Lucile Packard Foundation, which lent Danco $10 million in 1998 to support approval and marketing of RU-486.
Sarah Clark, director of the Packard Foundation's Population Program, said her group and other Danco backers share an array of motivations for taking on responsibility for such a controversial drug.
"We're trying to make sure this choice is available and is not kept out for the wrong reasons," she said. If it were up to more profit-oriented drug companies alone, she added, RU-486 would probably not be on the market: "We wouldn't have to make loans to Danco if the commercial market were there."