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FDA Places Hold on Andrx's New Drug Applications

Posted on: Thursday, 8 September 2005, 15:00 CDT

Sep. 7--The Miami Herald has issued a correction for the story slugged MI-ANDRX-FDA, filed by Knight Ridder/Tribune Business News for Sep. 7.

The headline incorrectly stated that production has been halted at Andrx. The plant is operating. The company's new drug applications have been put on hold.

Please delete the previous version of the story and use the following corrected one.

FDA places hold on Andrx's new drug applications

By John Dorschner

The Miami Herald

Sep. 7--The Food and Drug Administration is placing all new drug applications of Andrx on hold because of problems inspectors found in its main manufacturing plant, the Davie drug maker announced Tuesday.

The news sent Andrx's stock plummeting. On Tuesday morning, it fell 29 percent before closing at $14.89, down $3.05 or 17 percent on trading of 17 million shares -- 17 times higher than normal.

Neither Andrx nor the FDA is saying exactly what the problems are, but experts say that if there had been major issues with the safety of the drugs the company makes, the FDA would have quickly closed the Davie plant.

The FDA's move came after three months of back-and-forth communication with the Davie company. Inspectors visited the plant in May and discovered deficiencies in the production process. The company responded with a "corrective action plan." Instead of directly responding to the plan, the FDA announced the hold on new products, Andrx said.

Chief Executive Thomas P. Rice said the company was working with the FDA and had already made changes that he believed put the plant in "full compliance" with the agency's requirements.

Amy W. Stevens, an analyst with Susquehanna Financial Group, said investors were obviously concerned about the uncertainty of the process. "There are all kinds of sanctions" that are possible, "ranging from fines to some kind of product recall or suspension of production."

Stevens, who doesn't own any shares and has a negative rating on the company because she thinks it's overvalued, said Andrx had filed applications for five new generics this year and had a total of 25 on file with the agency, but none of them were on a schedule to be approved in the next several months, and so a temporary hold on applications wouldn't necessarily hurt the company.

Andrx did not detail the problems inspectors found, and the FDA did not respond to three calls from The Herald. The agency doesn't make site-visit reports, called Form 483s, instantly available to the public. Andrx said only the FDA could release the information.

Without the Form 483s, experts said, it was hard to determine what exactly was going on or what might happen next. "It all depends on the severity," said Alexander Rubido, head of BioQuest, a Coral Gables consulting firm that assists pharmaceutical companies in dealing with the FDA. "And we don't know the severity in this case."

Andrx had gone down this same bureaucratic path last year, said Rice, when it received two Form 483 letters and also had its applications put on hold for a while. Rice said he wasn't certain how long that period was because the FDA didn't tell him.

"We don't have any sense that this is a product recall or a safety issue," said Rice about the May 2005 report. "It's more of a technical compliance issue." After the Form 483 was filed, Andrx made changes in its manufacturing process.

Rice said the company wanted to resolve the issues quickly, but it was uncertain what the FDA would do. "People want guidance where this is going to end up, and we don't know. . . . We don't really know what they're thinking."

In most cases, if inspectors found serious health or safety issues, they would shut a plant down shortly after going through it.

If they don't accept a company's plan to correct the problem, the FDA's next step would be to issue a warning letter, which is a public document.

Still, the FDA's putting a hold on applications seems like a portent, said Stevens, the analyst. "One would expect to see something very shortly from the FDA. The more serious the issues, the quicker they would act."

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ADRX,

Source: The Miami Herald

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