Features, Manufacturer Focus

Innovation and empathy: Inside a dermatology success story

Ego Pharmaceuticals discusses the company’s journey from developing formulas in bathtubs to its recent factory expansions.

Billy Friend sat down with managing director of Ego Pharmaceuticals Alan Oppenheim to learn about the company’s journey from developing formulas in bathtubs to its recent factory expansions supporting the production of 9 million kilograms of pharmaceutical products every year. 

After Alan Oppenheim finished his morning play at preschool, he would be taken across the road to Ego Pharmaceuticals’ first factory, where he would sit on a table, watching Pinetarsol Solution be put into glass bottles and labelled by the company’s second ever employee, Eunice.

“Sometimes I would get a label and attempt to put it on the bottle myself,” he said. “Four year olds aren’t particularly ambidextrous, and you need to get the label straight, so I suspect almost every label I put on Eunice had to take off and start again. She could label bottles faster than a machine could. When my father bought the first automated machine, it was surprising how slow it was compared to Eunice.”

Alan’s father, Gerald Oppenheim, founded Ego in 1953 with his wife, Rae, after they saw a need for products to restore and maintain healthy skin. Gerald’s father Erwin was a successful dermatologist himself in Germany – the family had emigrated to Australia in 1939, when Gerald was 13 years old. In the laundry of Gerald and Rae’s suburban Melbourne home, they developed Ego Pine Tar Bath Solution, later called Pinetarsol, which remains one of Australia’s most widely used itch and inflammation skin treatments.

As a chemist, Gerald was uniquely positioned to formulate innovative products that people needed to treat their skin. Rae, being a nurse, communicated the benefits of the products to dermatologists across Australia. When Alan suffered cradle cap as a baby, his father formulated a product to ease the skin condition, which remains the only product of its kind around the world. From the beginning, the husband and wife team established Ego as innovators in the scientific development of dermatology products.

Gerald grew the business by working with dermatologists, visiting them at different conferences around the country. The professionals understood the value of the products, but the trouble was you could only get a small amount of sales from this. In the mid 1970s, Ego begun to enter some pharmacies. In 1975, the trajectory of the company changed when Gerald was asked by Melbourne’s Queen Victoria Hospital to develop a specialist bath oil for its dermatology patients.

“The aptly named Dr. David Nurse wanted a bath oil for children with eczema in hospital,” he said. “My father formulated a bath oil with minimal chance of irritation as a service line for the Queen Victoria Hospital. We made a bucket full of the product and we labelled it QV bath oil. Everyone thought it didn’t matter at the time because it was just a service line, kind of a nuisance in the back corner. Then years later, patients loved the product and went to the pharmacy after leaving the hospital to ask for some QV bath oil. The pharmacies didn’t know the product existed, but the feedback was relayed to my dad and he had some bottles printed, did a pharmacy run and transformed the business.”

Alan Oppenheim on a tour of Ego’s facility with Minister Ben Carroll.

Ego’s QV Bath Oil, named in honour of the hospital, is a household name over four decades on. But that product just scratches the surface of Ego’s production today. Last year, Ego produced an equivalent of 50,000 full bathtubs of product, including 2.4 million kilograms of QV Gentle Wash alone. The Australian manufacturer produces over 120 products for all types of skin needs, sold in many different sizes, targeting anything from eczema, to head lice to anti-aging:

SunSense® – In 1988, Ego was the first company to use a combination of a physical blocker and UV absorber in sunscreen and make it cosmetically acceptable.

DermAid® – To the best of the company’s knowledge, it was the first company to produce a dissolved hydrocortisone cream.

Aqium® – Dr Jane Oppenheim created the hand sanitiser market in Australia when Ego launched Aqium in 2000. Ego continues to make Aqium in its $20 million facility designed to make flammable alcoholic products to world class pharmaceutical quality. During COVID- 19, Ego increased production by more than 100 per cent to meet the rapidly rising demand.

MOOV® Headlice – Ego was the first company to have a headlice product that had been clinically tested to the international GCP Guidelines for clinical trials.

QV® Dermcare – Ego was the first company to introduce products with ceramides into Australia at a cosmetic level. This was the QV Intensive with Ceramides range, which was rebranded to QV Dermcare in 2021.

The tried and tested formulas have global reach, with exported product equating to about 50 per cent of the business. Ego is sold in over 15 countries beyond Australia and New Zealand – the UK, Asia, and Middle East being the top buyers. Today, Ego employs 517 people (54 per cent female, 46 per cent male) in Australia, but over 700 in total globally.

To support this growth, Ego’s facility underwent a $25 million facelift over the COVID pandemic, including installation of new LED lights, sprinkler system, fire detection system, solar panels and replacing air conditioning systems with one centralised lower energy system. Air conditioning in pharmaceutical production is different to other manufacturing sectors, because it needs extremely clean air in the clean rooms, using fine filters.

Dr Jane Oppenheim, scientific and operations director at Ego, was in charge of the upgrade which was completed in the middle of last year. Jane explained Ego is determined to have expertise inhouse and not just rely on contractors for its continued expansion.

“When I took over the engineering team, we had two engineers with some electricians and fitters. We now have a team of over 50,” she said. “Over time, we’ve been able to develop the engineering team to really run the project.”

Ego has worked with the same one company on all of its structural engineering consulting for 15 years, developing a functional team of external and internal engineers who understand how each other work. Jane credits this as the main reason why Ego has delivered so many projects on time and on budget, including the 50 million, five-year facility called Oppenheim Way in Dandenong South.

“We bought the land as a team. We rezoned it as a team. We did a master plan as a team and we built the main office building as a team,” she said. “It is our Global Support Centre where a lot of the new manufacturing will be done. We’ve recently started the first expansion of this which is very exciting.”

From making its formula in bathtubs, Ego has progressed to become a local manufacturing powerhouse for the people of the world. This year, the company has announced it is expanding production capacity by 50 per cent as part of a $35 million project.

The project will add new cream and filling lines to Ego’s Braeside manufacturing facility and extend its distribution centre in Dandenong South, increasing capability and capacity to support local and fast-growing export markets.

“Keeping our high-technology manufacturing in Australia has and always will be important to us,” he said. “This grant will help us further in creating good jobs to support our local economy as we continue to grow and will enable Ego to transform more lives through the science of healthy skin across many nations.”

Minister for industry and innovation and manufacturing sovereignty Ben Carroll told Manufacturers’ Monthly the state government’s support of the expansion will create 90 new jobs.

“Ego Pharmaceuticals’ decision to expand its operations in Victoria demonstrates the strength of our nation-leading advanced manufacturing industry and highly skilled workers,” Caroll said.

Ego has set its sights on new cream and filling lines to increase production at its Braeside manufacturing facility.

A demand for quality control

Quality control is integral in the pharmaceutical world. Before he became managing director, Gerald was the scientific director himself, directly involved in projects such as significantly upgrading the businesses’ water purification standards.

Ego’s products are not sterile, but the goal is to produce products with very little bacteria in them. Australia’s Therapeutic Goods Administration audits processes on a frequent basis, and Ego decides to make all of its products to international pharmaceutical standards (even though some products aren’t classed as therapeutic and therefore wouldn’t require as such).

“Our job is to produce and supply a product that is really clean with really low levels of bacteria,” Alan said. “The most important ingredient for that is the water. Water at room temperature doubles in bacteria about every half hour, which is really, really fast. When we’re putting water in our products, or rinsing our tanks, we are using our purified water systems that makes reverse osmosis water. We don’t go sterile because that’s a whole another level of cost, but the level of bacteria in the water is really critical and really low.”

To test the level of bacteria, chemists can’t just duck into a lab and resolve a sample in five minutes. In a microlab, staff have to grow the sample in an incubator and wait for 48 hours for the results, which is why it’s critical for bacteria levels to begin low, and if they are concerning at all, to get onto it early.

“For the purified water system, the most important ingredient is TLC – tender loving care – by the engineers who understand it and work closely with microbiologists,” he said. “Improvements might come from a particular tap where the water comes out, or it might be the system or a whole range of things. We do a lot of work to ensure the bacteria levels stay really, really low.”

The people behind the product

Dr Jane Oppenheim has been working on Ego’s mixers for more than a decade, having purchased the first machine from Germany around 15 years ago. This machine is a two-tonne, computer-controlled mixer which makes batches of emulsions such as sunscreen and anti-fungal cream. Ego has another two-tonne mixer for making its Aqium Hand Sanitiser, which is flammable, thus requiring completely different engineering because of the alcohol in the formula.

When touring Ego’s facility in Braeside, Victoria, it was clear to see the company recognises the impact particular staff have had over the years. It was impossible to miss the new arrival – Ego’s gigantic new mixer, which is named after one of its dedicated employees – ‘Ravi.’

The machine weighs eight tonne empty – so big it couldn’t be shipped in a container and had to be transported in wooden crates – and came with two whole shipping containers of cables and valves.

“We then had two structural engineers, civil engineers and one computer engineer from the supplier come out from Europe with many of our engineers all working together,” he said. “We had to raise the ceiling, and literally take the roof off and raise the roof to fit it in.”

The mixer makes five tonne batches of emulsions. The oil ingredients and oil soluble ingredients are put into one container, while the water soluble ingredients are in another container. The ingredients are heated and mixed together, cooled and emulsified.

“The huge motor which runs the emulsifier pushes the mixture through a very fine gap to make sure that the droplets of oil in the water mixture are really small which increases the stability the product for the long term,” he explained.

The machine’s namesake – Ravi – has worked with Ego for 28 years. Described by Jane Oppenheim as “just a really, really good sort,” Ravi has been integral to Ego’s manufacturing operations, including working a way to increase from two batches a day to three batches per day.

“Whenever I step into manufacturing, Ravi has always a good reason for change,” Jane said. “He looks at what we can do differently in the future. He gives me the floor credit and I give him the management credit, so together we are able to convince most people of plans to better production and efficiency.”

Alan Oppenheim explained that the company’s values – including considering staff as family themselves – stemmed from his family heritage.

“When you’re running a small business you don’t usually have time to put them on paper, but my mother and father lived these values – quality, our people making the difference, innovation, ethics, service and helping our customers.”

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