August 2005

MANUFACTURING

Chiron Cuts Supply of Flu Vaccines Made in Germany; Liverpool Plant Under Inspection

Chiron Corporation (Emeryville, CA, www.chiron.com) announced that quality problems at its Marlburg, Germany, manufacturing plant will prevent the company from supplying its "Begrivac" influenza virus vaccine to non-US markets for the 2005–2006 flu season. The announcement came while a US Food and Drug Administration (Rockville, MD, www.fda.gov) reauthorization inspection was still underway at the company's Evans Vaccines plant (Speke, Liverpool, UK). This plant manufactures the "Fluviron" influenza vaccine that was pulled from the shelf last year because of CGMP-related issues.

Chiron expected to supply 12 million doses of the Begrivac vaccine to primarily German and UK markets. The company had previously announced that it had uncovered a small number of Begrivac vaccine lots that did not meet product sterility specifications. In this announcement, Chiron predicted that the time required to conduct any further testing or finding any additional manufacturing or regulatory problems as a result of the investigation could force the company to stop its supply of the vaccine.

Chiron is still expecting to produce 18–26 million doses of the Fluviron vaccine (a vast majority of which are bound for the United States) for the 2005–2006 flu season, pending the FDA on-site inspection of its Liverpool facility. Once inspections are completed, Chiron expects to respond to any observations noted by FDA. The company must also receive supplemental approvals for changes to the product and its manufacturing process from the UK Medicines and Healthcare Products Regulatory Agency and from FDA, respectively.

–Kaylynn Chiarello

RECALLS

Able Labs Files for Chapter 11

Able Laboratories (Cranbury, NJ, www.ablelabs.com) filed for voluntary Chapter 11 reorganization in the New Jersey division of the United States Bankruptcy Court in July. This announcement comes on the heels of the resignation of company President and interim CEO Robert G. Mauro.

In Late May, the company was forced to halt all production and recall all available product after an internal investigation turned up problematic testing procedures.

The Chapter 11 filing will allow Able to continue as a company while working with FDA to improve the aforementioned failings, and cover all expenses to vendors and suppliers.

Another resignation In early July, Able accepted the resignation of company President and interim CEO Robert G. Mauro. Mauro's resignation comes only a few months after he replaced Dhananjay G. Wadekar as chief executive.

According to a statement posted on the company's Web site, the company is "seeking an appropriate replacement to lead the company in addressing the company's previously disclosed regulatory issues, including its recall of all products and its suspension of all manufacturing operations." In the interim, Able's board of directors will oversee day-to-day activities carried out by the senior management team.

Citations Able also received a list of inspectional observations (Form 483) from FDA. Citations include: failure to ensure that all drug product distributed had the safety, identity, quality, and purity that they are represented to possess; failure to reject drug products that failed to meet established standards, specifications, and quality control criteria; and omitting from the annual report information about investigations that may have affected FDA drug approval. Able stated that it intends to work with FDA to resolve the outstanding regulatory issues, and "is evaluating all potential strategic options available to it in light of the regulatory and financial issues it faces, including the possibility of seeking relief under the bankruptcy laws."

In response to the Form 483, Able stated that it had submitted possible terms for a consent decree to FDA on May 26, and is "prepared to enter discussions toward a decree at FDA's earliest convenience."

–George Koroneos

WARNING LETTER

Pragmatic Materials

On June 17, the Food and Drug Administration's Cincinnati office issued a warning letter to Pragmatic Materials, Inc. (Solon, OH), a company that repackages active pharmaceutical ingredients (APIs) for sale to pharmacies for compounding.

FDA said the company routinely listed manufacturers' expiration dates on the labels of repackaged products, even though it replaced the manufacturers' original inert and airtight packages (often with an inert gas overlay) with more porous packages—without performing additional stability or container tests. The products cited were NADH (nicotinamide-adenine dinucleotide, reduced sodium salt), oxytocin, streptomycin sulfate USP, polymyxin B sulfate, gentamycin sulfate, and cromolyn sodium.

The agency also criticized Pragmatic Materials for repackaging technical grade EDTA Disodium as USP grade for prescription compounding—without performing the additional tests necessary to support the higher grade rating.

In its letter, the agency acknowledged the company's counterarguments and efforts at remediation, but said they fell short.

ACQUISITION

Xanodyne Acquires aaiPharma Assets

Xanodyne Pharmaceuticals (Florence, KY, www.xanodyne.com) was named the winning bidder on July 12 in an auction that decided the fate of aaiPharma's pharmaceuticals division. Xanodyne acquired all company assets in bankruptcy court for $209.25 million. The company also said that it will purchase $30 million in services to be supplied by the development services division of aaiPharma.

As part of the deal, Xanodyne will acquire the pain-management drugs, "Darvon" and "Darvocet," as well as three pain products in clinical development. The additional products are expected to bring in pro forma 2005 revenues of nearly $100 million.

"We have believed for some time that the two businesses fit very well together," said William Nuerge, CEO of Xanodyne. "Xanodyne brings a pipeline of women's healthcare products and a strong commercial capability and infrastructure for both women's healthcare and pain management products, while aaiPharma has a broad range of currently marketed and pipeline pain products."

In other news, Xanodyne's board of directors was reshuffled to guide the company through the purchase and merger. Members James Cavanaugh, James Currie, and Nuerge remain on the board and will be joined by Ansbert Gadicke, Steven St. Peter, Adele Oliva, and Dennis Purcell. Cavanaugh continues as chairman of the board.

–George Koroneos

ACQUISITION

Aptuit To Purchase Quintiles

In a $125-million deal, Aptuit (Greenwich, CT, www.aptuit.com) has agreed to buy three Quintiles Transnational (Research Triangle Park, NC, www.quintiles.com) business units: the Pharmaceutical Sciences contract manufacturing and formulation development group, the Packaging and Logistics group, and the Preclinical Services group.

The three units now employ 1400 (primarily in Kansas City, MO; Mt. Laurel, NJ; Edinburgh, Scotland, and Singapore) and provide services to 19 of the world's 20 largest drug companies, according to a joint statement.

The statement quoted Aptuit CEO Michael A. Griffith as saying, "These business lines constitute a premier business that will form the foundation for our comprehensive drug development services offering. We gain an industry-leading team with the right expertise for our business model, a world-class customer base, GMP/GLP facilities, and a range of technologies to support and help drive drug development. From a technical and operational standpoint, the transition to Aptuit will be virtually seamless to employees and customers."

Aptuit reportedly intends to invest $50 million in reorganizing and developing the acquired businesses over the next several years.

The deal also includes a multi-year joint-marketing deal between the two companies.

–Douglas McCormick

FDA Posts Q5E Biotech and Biological Products Comparability Guideline

The US Food and Drug Administration (Rockville, MD, www.fda.gov) posted the Q5E Guidance for Industry, Comparability of Biotechnological/Biological Products Subject to Changes in Their Manufacturing Process. The International Conference on Harmonization (ICH) recommended the guideline for adoption in November 2004 after it had reached Step 4 of the ICH implementation process.

According to the document, Q5E details FDA's current thinking and recommendations about assessing "the comparability of biotechnological/biological products before and after changes are made in the manufacturing process for the drug substance or drug product" during development and after approval. The guideline was written to assist manufacturers in providing evidence to ensure that such process changes will not adversely affect the quality, safety, or efficacy of the product.

–Maribel Rios

MANUFACTURING

Wyeth, Purdue, and Schering AG Announce Restructuring Plans

Following Pfizer's (New York, NY, www.pfizer.com) lead in April, Wyeth, (Madison, NJ, www.wyeth.com) Schering AG (Berlin, Germany, www.schering.de), and Purdue Pharma (Stanford, CT, www.pharma.com) announced restructuring plans that will result in the downsizing of their workforces.

Wyeth Spokesperson Doug Petkus told Pharmaceutical Technology that the company will transition its primary care sales force, now staffed with full-time sales representatives, to a combination of full-time and flextime employees. The cuts are expected to affect approximately 30% of the full-time sales force.

"The marketplace is changing," Petkus said. "Primary care physicians have not been receptive to a typical mode of detailing, which in our case would be multiple visits from similar representatives from the same company talking about the same product. Repetition wasn't providing an environment to deliver important information, and the receptivity was less than optimal at best."

Under the new sales force structure, part-time employees will handle sample drops, allowing full-time sales representatives to focus on the actual product being discussed. "This new paradigm is something that we feel will make Wyeth more effective and will lead to more receptivity by our customers," Petkus said.

Purdue Pharma President and CEO Michael Friedman told employees that the company would downsize its workforce in response to the loss of patent protection for the pain medication OxyContin.

"This is the most painful decision I have had to make in my 20 years at Purdue," Friedman said in a meeting with employees. "But we are left with no other options, given the drop in revenues that we are projecting. However, Purdue has a culture of caring for its employees, and we will be offering generous severance packages to those whose jobs are eliminated."

Neither Purdue nor Wyeth has released figures regarding how many positions will be cut, but Purdue expects the downsizing to affect nearly 50% of its US workforce.

Schering AG Chief Financial Officer Joerg Spiekerkoetter revealed that the company would lay off 2000 employees and eliminate 12 of its 24 pharmaceutical manufacturing sites in an effort to increase profitability by 18% for 2006.

Sites in Mobara (Japan), Nanjing (China), and Tikkakoski (Finland) have already been terminated, with additional plants in Orizaba (Mexico), Bedford (MA, USA), Lys-lez-Lannoy (France), Alcalá de Henares (Spain), Sakura (Japan), Osaka (Japan), Jakarta (Indonesia), Buenos Aires (Argentina), and Bogotá (Colombia) slated for closing by 2010.

The restructuring plan is part of a program the company calls "Focus," which was established to help streamline Schering's portfolio and improve its profit margin. In the 2004 fiscal year, the company reduced costs across the board in administration, engineering, research, and development.

"Based on our solid business performance and further efficiency measures, we will continue to invest in growth opportunities and to improve our profitability," said Hubertus Erlen, Chairman of the Executive Board of Schering AG. "We are committed to even further increase our operating margin above 18% beyond 2006."

–George Koroneos

REGULATORY

FDA Pilots New Quality Assessment System

The US Food and Drug Administration (Rockville, MD, www.fda.gov) is looking for 12 pharmaceutical companies to take part in a pilot program designed to develop guidance for a new quality assessment system.

Participating companies will be asked to submit chemistry, manufacturing, and controls information to be used as a demonstration of their "quality by design, product knowledge, and process understanding of the drug substance and drug product in a new drug application."

The Office of New Drug Chemistry (ONDC) in the Office of Pharmaceutical Science, Center for Drug Evaluation and Research, is expected to use the information gained from the pilot program to establish a modern, risk-based pharmaceutical quality assessment system, as described in a September 2004 white paper entitled, "ONDC's New Risk-Based Pharmaceutical Quality Assessment System."

The new quality assessment system will focus on critical pharmaceutical quality attributes (related to chemistry, formulation, manufacturing process design, and product performance) and their relevance to safety and effectiveness. The principles underlying this new quality assessment system can be found in the February 2005 International Conference on Harmonization (ICH) draft guidance entitled, "Q8 Pharmaceutical Development."

Crawford Confirmed

After months of delay, the Senate finally confirmed Lester Crawford as commissioner of the US Food and Drug Administration (Rockville, MD, www.fda.gov). The vote occurred July 18 after FDA promised to make a decision by Sept. 1 on whether to approve over-the-counter status for the emergency contraceptive pill "Plan B." Crawford will face a range of equally difficult decisions in the coming months as FDA struggles to deal with drug safety issues and difficult ethical concerns related to drug research and use.