Panoz Pursues $900,000 Le Mans Racecars Fueled by Nicotine Patch Fortune

Don Panoz made his fortune inventing the nicotine patch. Inside a corrugated metal warehouse in a north Atlanta suburb, he’s spending some of it to develop a triangle-shaped car that could transform auto racing and eventually make regular cars more efficient.

Panoz’s Elan Motorsport Technologies is putting the final touches on its DeltaWing, which looks a bit like the Batmobile. It has a tapered design to reduce drag, a rear fin to boost aerodynamics, and extremely thin (four inches wide) front tires to remove weight and hug the road, Bloomberg Businessweek reports in its Jan. 9 issue.

Most importantly, it’s built using a special material developed by Elan called Recyclable Energy Absorbing Matrix System or REAMS. The composite plastic is 20 percent lighter than the carbon fiber used in race cars and tough enough to block bullets, according to Panoz. The car’s light weight means it will use half the fuel of a typical Formula One racer, he said.

“When you look at this car, the first thing you think is, ‘It’s going to fly,’” the 76-year-old Panoz said in an interview in his office, where glass surfaces have a blue haze from the Australian Winfield cigarettes he favors.

Aviation Clients

The near-term goal is to debut the car in France’s 24 Hours of Le Mans race on June 16-17. But Panoz, whose company is one of five partners creating the $900,000 DeltaWing, hopes REAMS will affect transportation more generally. Elan’s client list includes aviation companies such as Lockheed Martin Corp. (LMT) and General Dynamics Corp. (GF)’s Gulfstream unit and, as well as a major Chinese automaker Panoz declines to name. REAMS is cost- effective for regular vehicles since the material is cheaper than carbon fiber, Panoz said.

“Everyone would like to have something lightweight that absorbs energy on impact,” said David Cole, chairman emeritus at the Center for Automotive Research in Ann Arbor, Michigan, who has followed the Panoz car business for several years.

The family of Panoz auto companies, headed by his son, Dan, is also awaiting European road approval on a new $500,000 sports car called the Abruzzi, named for the Italian city where Don Panoz’s father was born. Only about 80 Abruzzis will be made, each one corresponding to a historical Le Mans race, and buyers will participate in a special ceremony at the 24-hour endurance race when they take delivery of the car. Panoz also founded the American Le Mans racing series.

Auto Icons

Hurley Haywood, a five-time winner of the Daytona 24-Hour race and a three-time winner of the 24 Hours of Le Mans, compares the Panoz designs with those of auto icons such as Carroll Shelby, who helped create Ford Motor Co. (F)’s Shelby Mustang GT.

“He’s willing to travel down a road that nobody has walked before,” Haywood said in a telephone interview. “That’s what Henry Ford did.”

Each Panoz car is hand-made. Only a couple thousand have been produced since the family business was started after Dan Panoz started building roadsters as a hobby in the 1990s. One of the first Panoz race cars, called the Esperante GTR-1, beat Audi and BMW eight times and won an award at the 1999 Autosport show in London for its unusual design that put the engine in the front of the car.

Racing and auto development were unexpected retirement diversions for Panoz, who was raised in White Sulphur Springs, West Virginia, and studied as a pharmacist. In 1961 he founded generic-drug maker Mylan Pharmaceuticals, which was based in an abandoned roller skating rink and counted among its early investors Pittsburgh Pirates baseball players Bill Mazeroski and Bob Friend, who used some of their World Series winnings to fund the startup.

Nicotine Patch

Panoz moved his family in 1969 from West Virginia to Ireland, where he founded Elan Corp. (ELN), a drug maker that patented time-release antibiotic pills that cut the dosage and cost in half.

He came up with the idea for a time-release adhesive patch while visiting his father in the hospital in 1975, when escaping fumes from the nitroglycerine that was being administered with paper bandages to treat his father’s heart condition gave Panoz a headache. Panoz realized that a different backing could not only prevent harmful fumes, but also target specific doses of other medications that absorb into the skin at certain rates.

Panoz went on to patent an adhesive patch for nicotine and received FDA approval in 1992. Similar technology is now used to administer drugs ranging from birth-control to attention deficit hyperactivity disorder.

“We just happened to patent it for nicotine,” Panoz said. “It was by accident.”

‘Wild Dreams’

Panoz stopped smoking for five years and used the nicotine patch, but said it gave him “really wild dreams.” He resumed smoking 11 years ago after watching his friend Mario Andretti crash while racing a Panoz car 170 miles an hour.

When he’s not at his Australian home or on extended European visits, Panoz zips around Atlanta in one of his Panoz roadsters -- there are more than 1,500 Panoz-built cars in service -- or a white Porsche (PAH3) Panamera with tan interior. Shuttling visitors between Panoz factories, he foregoes a seatbelt and, with a cigarette dangling in his left hand, steps on the gas pedal.

“We just touched 80,” he said with a grin. “What can I say, I like to drive.”

To contact the reporters on this story: Michael Buteau in Atlanta mbuteau@bloomberg.net. Mary Jane Credeur in Atlanta at mcredeur@bloomberg.net.

To contact the editor responsible for this story: Anita Sharpe in Atlanta at asharpe6@bloomberg.net.

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