CDMO hit with FDA warning shutters plants, files for bankruptcy

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A North Carolina CDMO hit with a warning letter by the FDA earlier this year has shut its doors as its parent company files for bankruptcy. (Pixabay)

Ei, a North Carolina CDMO that was hit with a warning letter from the FDA earlier this year for manufacturing pharmaceuticals in the same building with the same equipment used to produce pesticides, has shut its doors as its parent company declared bankruptcy.

Product Quest Manufacturing, which operates the Ei facility located Kannapolis, North Carolina, filed for Chapter 11 protection last week. Operations at the facility ceased abruptly, leaving 296 employees without jobs. Although a letter to the state about the layoffs said they would not occur until November, WSOC-TV reported that a note left on a door of the facility informed employees that plant closed effective last Thursday.

Operations at the Florida plant ended July 30, the company said.

Product Quest said in its filing that “extensive product quality issues” that lead to the recall of products produced at the Kannapolis and its Daytona Beach, Florida, plants were among the reasons for declaring bankruptcy. The company said in the filing that it would cost $3 million to $4 million to address the issues related to cross-contamination.

RELATED: FDA hits CDMO Ei for making drugs and pesticides with same equipment

In a warning letter posted on the FDA’s website in May, the regulator said its inspectors found the company “manufactured topical human drugs and several pesticides in the same building, using shared equipment” despite the risk of cross-contamination. Agency inspectors also found two of the drugs meant for human use contained a pesticide produced at the Ei facility.

Last week, the company also issued a voluntary recall of a lot of CVS Health 12 Hour Sinus Relief Nasal Mist due to microbiological contamination.

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