PhillyDeals: Rejuvenating brands that are long in the tooth

Old drugstore brands don't always fall off the shelf. Sometimes they get shipped to the suburbs of Philadelphia, where a few small drug firms specialize in over-the-counter brand repair.

Remember Sucrets? The cough drops once made by Philadelphia's Smith, Kline & French are now among dozens of brands owned by Insight Pharmaceuticals Corp., a 24-person Langhorne firm.

Boss Gary Downing, an executive at the former Rhone-Poulenc Rorer Inc., among other drugmakers, claims a "dramatic" sales jump since he returned Sucrets to their old metal containers last year and started an ad campaign proclaiming, "It's all in the tin."

Insight also owns Anacin painkillers (formerly owned by Wyeth) and Nix lice treatment (from Pfizer Inc.), among others. Downing says his firm's gross sales to retailers, including recent acquisitions, total $100 million a year, and he's under orders to "double or triple" that revenue by 2015 from owner and investor Swander Pace Capital, of Bedminster, N.J.

Insight said Tuesday that it had acquired e.p.t., a home-pregnancy test (yearly sales by retailers: $50 million) first sold in the 1970s, from a unit of Johnson & Johnson. The tests are made in China. The supply agreement is part of the deal. A consumer-health business that size could be worth $50 million or more, if it's profitable, said Andy Greenberg, partner in GF Data Resources L.L.C., of West Conshohocken, which tracks private-company sales.

"The beauty of e.p.t. is that it started the home-pregnancy-test market" and is well-known to women even without ads, Downing said. "It wasn't strategic for J&J," but it complements other "new mom" Insight products  .

Downing says his firm relies on marketing partners such as Emerson Group, of Wayne. "We buy, or partner with people who acquire, the tired, worn-out brands like Prell shampoo or Luden's cough drops," Emerson founder Scott Emerson told me. "We repackage them and make sure the value proposition is right, meaning that the price is right. We have 47 employees that call on Wal-Mart, CVS, Rite-Aid, Target."

Emerson, one of the growing army of Center City residents that commutes to the Main Line, worked at Johnson & Johnson and at the former William Rorer Co., which made Maalox antacid in Fort Washington, before founding his firm 16 years ago. He says his total retail sales top $1 billion a year, including Emerson's latest acquisition, St. Joseph aspirin for children.

"The best thing government can do is get the hell out of the way and decrease regulations," Richard Hayne, founder and head of the Urban Outfitters Inc. women's clothing stores group, told a packed house at the Union League last week at an Urban Land Institute event.

If that's how the world looks to an expansive retailer based in the government-aided ex-Navy Yard development, U.S. exporters, who compete with foreign government-backed rivals, are more likely to see government as an endangered friend these days.

"I'm worried that the current overemphasis on the deficit reduction, about which we [are] all concerned, could result in a fallback to recession" if Congress cuts too much, said James Conybear, director of operations at Metlab, a Wyndmoor company that provides metal-treatment services to other manufacturers.

Conybear joined a group of Philadelphia-area factory owners who met with U.S. Reps. Steny Hoyer (D., Md.), Chaka Fattah (D., Phila.), and Allyson Y. Schwartz (D., Phila./Montco). I wrote about the owners' tough questions. But Conybear says exporters need government support: Government-backed factories and restrictive rules abroad make it no time for Congress to put market ideals before real-world sales and jobs.

Unlike defense-dependent U.S. manufacturers, Metlab relies on Navy work for only about 5 percent of its sales. So exports are key. Conybear says U.S.-backed free-trade agreements with Canada and Mexico "make it easier for small manufacturers to ship stuff across borders."

By contrast, China subsidizes producers of energy equipment, cars, even Western-style bicycles. The United States can't compete, Conybear says, without a tough State Department to push back at unfair competition.

Conybear also praised the work of the 23-year-old Delaware Valley Industrial Resource Center, a nonprofit manufacturing consulting group that relies on federal and state contracts, plus membership dues.

"They are one of the best things we have in Pennsylvania manufacturing," Conybear told me, helping owners boost exports, improve processes, cut costs, and reach government leaders.

But in the current environment, he warned, "they are in danger of getting any support reduced or eliminated." Budget-cutters should support programs that work, Conybear said.