Akorn's Hi-Tech source of another recall


When Akorn ($AKRX) bought Hi-Tech Pharmacal a couple of years ago, CEO Raj Rai called the $640 million deal transformative. Most recently, what has transformed for Illinois-based Akorn is recalls tied to manufacturing issues at Hi-Tech.

Just a month after voluntarily recalling several hundred thousand bottles of an antibiotic manufactured by Hi-Tech in Amityville, NY, because of dissolution issues, Akorn is now recalling what may amount to more than 1 million bottles of the generic anxiety drug hydroxyzine hydrochloride because it failed impurities specifications.

In one of two recall notices listed in the most recent FDA Enforcement Report, it reported it is voluntarily recalling 22 lots of the drug that it manufactured for KVK-Tech. That recall amounted to 424,174 bottles. In the second class II recall notice, it also said it was recalling for the same reason another 37 lots of the drug that it ostensibly manufactured for sales itself. It didn't list how many bottles that amounted to, but if each lot averaged 19,280 bottles as the lots in the KVK-Tech did, then the total would be around 1.1 million bottles.

This is not an entirely new place for Hi-Tech to find itself. In 2010, it received an FDA warning letter, in part for selling drugs that had tested outside of specifications for impurities, twice. The company got a closeout letter the following year.

Hi-Tech's client, Newtown, PA-based KVK-Tech, is a privately owned generics maker that is in the midst of a major manufacturing expansion. The drugmaker announced in March that it had acquired a 460,500-square-foot complex in Newtown that Lockheed Martin was unloading in order to cut costs. Anthony Tabasso, CEO of the 11-year-old KVK-Tech, said that the company will get not only more manufacturing space but also offices and labs. The company already has a manufacturing operation in Newtown and is also building a $40 million sterile injectables manufacturing facility in nearby Langhorne Township.