Duramed's decade of turmoil August 1987 - Duramed Pharmaceuticals CEO Dasan Potti resigns amid a Food and Drug Administration investigation into Duramed's manufacturing methods in particular and the generic drug-making industry as a whole. October 1987 - E. Thomas Arington comes on board as CEO; the next day, Oct. 23, the company launches a costly recall of a previous conjugated estrogen product because of a packaging problem. 1989 - Duramed files a new petition with the FDA to market a generic version of Premarin, the brand name for American Home Products' estrogen drug. 1987- 92 - Losses exceed $33 million over five years but Duramed avoids bankruptcy liquidation by working out a payment plan with Provident Bank. First half of 1993 - The company manages a $315,000 profit. September 1994 - Duramed submits another FDA application after regulators specify that generic conjugated estrogens made by Duramed and others may not be as effective as Premarin because they contain only two of the most common estrogens in Premarin. Duramed's new drug, eventually known as Cenestin, contains all but one of Premarin's 10 estrogens. July 1995 - Duramed makes a key pitch in Washington to an FDA panel studying whether to approve a generic conjugated estrogen. The committee decides not to issue a recommendation, saying it does not know enough about the ingredients in Premarin. Investors who had driven up Duramed's stock by 34 percent within a week begin bailing out. August 1995 - CNBC broadcaster Dan Dorfman reports that Duramed has a "rotten" balance sheet and a 50 percent chance of filing for bankruptcy within six months. Mr. Arington fires back, saying the company is wiping out its debt and poised to thrive. November 1995 - Duramed raises $11 million in a stock placement that, coupled with a previous offering, gives the company $24 million. February 1996 - Shares of Duramed jump to a three-month high of $22 amid speculation of Cenestin's imminent approval. March 1996 - Stung by continuing delays with the FDA, Duramed says it has laid off up to 35 workers and instituted pay cuts affecting about half of its 344 employees. October 1996 - Another 94 workers are laid off. April 1997 - Duramed reports a $25.6 million loss for 1996, roughly half its total sales, with heavy pre-launch costs for Cenestin and price erosion on some of its generics. May 1997 - The FDA rejects Duramed's application to market a generic Premarin.

Duramed Pharmaceuticals Inc. Monday lost an agonizing, three-year quest to market a generic version of the country's top-selling prescription drug, raising doubts about whether the Cincinnati-based drug maker will survive.

The U.S. Food and Drug Ad ministration (FDA) ruled that Duramed and another generic drug company, Barr Laboratories of Pomona, N.Y., could not sell a generic equivalent of American Home Products' conjugated estrogen drug because their substitute products did not have all the same ingredients.

AHP's Premarin is a natural estrogen made from the urine of pregnant mares. Duramed's synthetic version, called Cenestin, contains all but one of Premarin's 10 estrogens: delta 8,9-DHES.

The decision lets American Home Products continue to enjoy a lock on the $1 billion-a-year market for Premarin, a drug prescribed about 44 million times a year in the United States, often to treat post-menopausal women susceptible to the bone disease osteoporosis. Premarin costs 40 cents a day. A generic competitor could cost a nickel.

Duramed, with current annual sales under $50 million, has spent millions on pre-launch costs for Cenestin, betting that FDA approval of the drug could increase its sales sixfold or more. The company even built an $11 million plant in Pleasant Ridge specifically to produce Cenestin.

Trading was halted on Duramed's stock about 11:30 a.m. as the FDA released its ruling; it never reopened. Analysts said they are bracing for a run from investors who had bet millions that Duramed would win approval.

In the past two years, Duramed's stock has bounced from a high of $22.75 in July 1995, to a low of $6.94 last December. Shares were at $10.37ï apiece when trading halted Monday.

Late Monday, Duramed Chairman and Chief Executive Officer E. Thomas Arington vowed that the company would continue trying to introduce its blockbuster product. Among its options: appealing the FDA ruling, undergoing more studies suggested by regulators, or seeking approval to market the drug outside the United States.

"We are certain we have a sound, reliable, quality product," Mr. Arington said in a statement.

Echoing a refrain used by Duramed throughout the FDA review, the chairman of Barr Laboratories said Monday's ruling represents "the triumph of politics over science."

"Wyeth-Ayerst (a unit of American Home Products) has used its influence in the political and marketing arenas to unfairly extend its product monopoly at the expense of American consumers," said Barr Chairman, President and CEO Bruce L. Downey.

During its limbo period with regulators, Duramed filed for FDA approval on several other generic drugs and struggled through price erosions on some of its generics now in the marketplace. Last year, the company lost $25.6 million - more than half its total sales.

"I don't know if they can weather the storm. They've put all their eggs in one basket and they have no cash," said pharmaceuticals analyst Hemant K. Shah of the New York firm HKS & Co.

"It's quite possible they could get some kind of short-term financing, but it's going to be a very, very difficult period for Duramed."

Other observers, however, have hesitated to give up on Duramed, given its comeback track record.

Amid bank-loan restructurings, a recall of an earlier estrogen product, a private workout with debtors and losses totaling $33 million, Duramed held on through the late 1980s and early 1990s. During a new round of layoffs last year, a wildly fluctuating stock price and premature media reports of the company's imminent demise, Duramed again held on.

In the past few months, Duramed used private placements to wipe out its debt with Provident Bank and began quietly moving into an expansion - hiring back about 40 of the 110 or so workers it laid off during 1996, filing new drug applications with regulators, striking joint ventures and scouting Greater Cincinnati for more distribution space.

The company has rebounded to about 300 employees.

Many of the moves, Mr. Arington said recently, were designed to extend Duramed from a "one-trick pony" relying on estrogen.

In a 40-page decision, the FDA said it was not clear which of Premarin's ingredients are essential to making Premarin effective and could not guarantee that a generic without all the same ingredients would have the same benefits.

The FDA initially classified delta 8,9-DHES as an impurity. But it rethought that opinion after American Home Products submitted new data a year ago indicating that the ingredient contributed as much as 25 percent of Premarin's effectiveness.