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After two big departures, business is good for remaining players

The first sign that all may not be right in the radiochemicals business appeared in July 2008 when Sigma-Aldrich announced that it would leave the field that September. The research products giant told customers that carbon-14 and tritium labeled compounds were on the decline, being replaced by “newer and less hazardous” technologies, such as fluorescent and stable isotope labeling.

Then in December 2008, General Electric informed customers that it would exit radiochemicals by the end of 2009. Six months later, GE sold the custom synthesis side to Quotient Bioresearch, a U.K.-based provider of drug development services.

A business abandoned by two major companies in the past two years can’t be a great one. Still, remaining players insist there’s life left in the market for these research tools. They say nothing’s better for the tracking of pharmaceuticals and other compounds as they work their way through living things.

As the name implies, radiochemicals are chemicals in which one or more atoms have been replaced with a radioisotope. Some radiochemicals incorporate short-lived isotopes such as phosphorus-32 and iodine-125. More common are compounds tagged with the long-lived isotopes carbon-14 and hydrogen-3, better known as tritium.

Surendra Gupta is particularly optimistic about the radiochemicals market. He’s the Ph.D. chemist who founded American Radiolabeled Chemicals, Inc. (ARC) in St. Louis in 1983 and has led the firm ever since. For Gupta, the demise of other competitors has been a boon to business.

When Tocris, a British radiochemicals producer, shut down five years ago, Gupta bought its inventory and business. Then when Sigma-Aldrich, a Missouri neighbor, decided to exit the market in 2008, Gupta purchased its inventory as well.

Today, ARC has between 4,000-5,000 radiochemicals in its catalog, the largest such collection in the world, Gupta says. PerkinElmer’s catalog is smaller, but it stocks more of the most popular compounds and thus has higher sales, Gupta concedes. Still, he considers ARC a formidable numbers two radiochemical supplier after PerkinElmer.

ARC’s sales have been expanding at 5-10% per year, Gupta says, and could be growing faster if he had more qualified radiochemists on staff. The growth is partly because of the shrinking supply base, he acknowledges, but partly because certain segments of the market are going as well.

In order to complete Food & Drug Administration-mandated safety studies, pharmaceutical companies generally must radiolabel their prospective drugs to study absorption, distribution, metabolism, and excretion (ADME) and demonstrate that no toxic by-products are being formed. “Drug companies used to have a radiosynthesis group in-house with 10 or 20 chemists,” Gupta says. Owing to cost-cutting moves, many of these groups have been disbanded. “Companies are ordering more and making less,” he notes.

The business has other bright spots as well. Radiolabeled compounds that were once used to study traditional biological pathways are now being enlisted in epigenetics research. Likewise, Gupta is getting requests for radiolabeled compounds from neuroscientists who are studying Alzheimer’s disease and other disorders of the brain.