Facing persistent manufacturing difficulties, New Jersey-based Pacira Pharmaceuticals will stop producing chemo drug DepoCyt, taking a $5 million charge and laying off some employees as it winds down those operations at a plant in California.
The drugmaker announced in an SEC filing late last week that it told authorities in the U.S., Canada and EU about its decision, pointing out the alternative treatments for patients who take DepoCyt, which is injected into the brain to treat lymphomatous meningitis.
It said it was halting production because technical issues related to the product’s manufacturing process “have persisted despite our corrective efforts.”
In 2012, the EMA had cited sterility concerns at Pacira’s manufacturing site and asked it to pull current supplies from the market.
“Given that alternative therapies are available for patients with lymphomatous meningitis, Pacira believes that it is in the best interests of patients to permanently discontinue the product, rather than face the prospect of prolonged uncertainty about product availability,” Susan Mesco, Pacira's head of investor relations, said in an email. “There is no impact on the quality or safety of product that has already been distributed to customers or their patients.”
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The company expects to take a charge of about $5 million in the second quarter to write off about $2.5 million worth of assets, $500,000 for employee severance and $2 million in lease payments it still owes on the facility where it produces the drug, minus some money it expects from a sub-lease.
It will pay $3.3 million of that in cash. It said a "small number of employees" will lose their jobs.
DepoCyt made up about 2.5% of the 2016 revenues for the Parsippany-Troy Hills, New Jersey-based company. About 95% of the company’s revenues come from Exparel, a surgical pain drug also based on its DepoFoam extended release technology. Pacira said that manufacturing of Exparel, which is produced at a different facility in San Diego, California, is not affected by the decision on DepoCyt.
It was five years ago that Pacira faced concerns from the European Medicines Agency (EMA) over manufacturing of DepoCyte, as it is called in the EU. At the time, an inspection by regulators from France and the United Kingdom found a number of manufacturing deficiencies, suggesting a "lack of adequate sterility assurance" that pose a "theoretical risk of sterility failure."
While no adverse events had been reported, the EMA asked Pacira to pull supplies from the market.