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| F. Michael Ball |
Injectable drug specialist Hospira ($HSP), which is being bought by Pfizer ($PFE), blew past analysts' projections for its Q1 earnings today, but its manufacturing issues continue to be a drag. Just last week, the FDA said Hospira had issued a recall of an anesthetic because iron particles had been found in some vials.
The Lake Forest, IL-based drugmaker today reported a profit of $75.6 million on revenue of $1.17 billion, both of which beat what Wall Street was expecting, the Associated Press points out. Its earnings per share of 43 cents hit 97 cents a share when adjusted for non-recurring costs and amortization costs, the company said. Zacks Investment Research said that analysts had only expected about 51 cents per share.
"Hospira started out the year with very strong sales and profitability, driven primarily by continued momentum in our specialty injectable pharmaceuticals business," CEO F. Michael Ball, said in a statement.
But included in some of those costs was nearly $13 million for the quarter to pay for things like third-party oversight and consulting costs as well as "extended production downtime related costs." Those costs all track back to the many warning letters the drugmaker has received in the last several years, one for a plant in Italy issued last month. That warning raised questions about the plant's vial stoppering procedures, its failure to look deeply enough into complaints and its lack of controls for access to prevent data deletions from test equipment, among other things.
The drugmaker also continues to recall products for a variety of problems, often because of particulate found in its sterile drugs. Last week, it recalled one lot of Preservative-Free Bupivacaine after confirming a customer complaint of orange and black, visible particles embedded and free floating in a vial, particles that the company figured out was iron oxide.
But getting Hospira's quality issues resolved will soon fall to Pfizer, which has a $17 billion deal to buy Hospira. The deal includes about $15 billion for shareholders and the assumption of about $2 billion in debt.
- here's the earnings release
- here's the AP story
- here's the recall