Xellia Pharma buys former Boehringer Ben Venue plant, once the poster child of quality failings

Denmark's Xellia Pharmaceuticals has bought the former Ben Venue plant, at one time the most notorious U.S. plant under FDA supervision, and the facility responsible for dozens of recalls and a slew of drug shortages.

Xellia CEO Carl-Åke Carlsson

Xellia acquired the closed facility in Bedford, OH, from Hikma Pharmaceuticals, which got it last year as part of its $300 million deal to buy the generic injectables business that Boehringer Ingelheim sold under its Bedford Laboratories brand. Boehringer had closed the plant at the end of 2013 and laid off its 1,100 workers when the burden of FDA-required upgrades got to be too much. Xellia said it intends to hire 170 people back to operate in the nearly new sterile injectable lines Boehringer installed before abandoning the effort.

"The U.S. is a very important market for us, and as a region with a strong manufacturing heritage and a uniquely skilled and specialized workforce," Carl-Åke Carlsson, CEO of the anti-infectives specialist, said in a statement. "Bedford, Ohio is an ideal location to expand our manufacturing capabilities." 

Hikma is retaining the rest of the facilities at the massive site, including the Quality and Development Center, but Xellia said it is getting substantial parts of the site, including the new manufacturing units for sterile injectables, which are not currently operational. Xellia would not disclose what it paid for the facility, one of the largest sterile drug manufacturing facilities in the country, but said it intends to invest heavily to get the facility ready for production in the next 24 months. It said it would work closely with the FDA.

The FDA is very familiar with the plant, which operated under a court-ordered consent decree issued in 2013, two years after FDA citations led BI to voluntarily close the facility to get on top of problems there. By that point, the contract facility had issued more than 40 recalls in 9 years and the FDA had outlined a long list of issues which left its sterile drugs open to contamination. FDA inspectors even discovered a 10-gallon container of urine in a storage facility, ostensibly used by employees to avoid bathroom breaks.

The 2011 closing immediately led to shortages of important drugs such as Johnson & Johnson's ($JNJ) cancer drug Doxil, as well as drugs made by Pfizer ($PFE), Takeda and Bristol-Myers Squibb ($BMY). The FDA worked to find substitutions and solutions for the shortages, but patients and doctors were unhappy. A U.S. House committee criticized the agency's regulatory aggressiveness, blaming it for four plant closings in which production interruptions created or exacerbated shortages of many drugs. The agency defended its actions as necessary to preserve patient safety but also found itself scrambling to try to deal with the shortages. The FDA decided to permit Bedford to continue to manufacture about 100 essential drugs under the consent decree.

The Germany-based Boehringer invested about $350 million on fixes but in the fall of 2013, it said enough was enough. The company explained the "magnitude of continued investment and time required to overcome the systemic manufacturing challenges is not viable." It projected it would rack up $700 million more in operating losses over the next 5 years to keep it open.

When Hikma bought it last year, the Jordan-based company said it would keep the R&D center and its staff for drug development. It moved some of the new equipment to its other production sites, but said it had no intention of restarting the facility.

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