Some companies, like Hikma, have had great success targeting drugs on the FDA shortage list, getting them to market and reaping the premium pricing that comes from supplying pent-up demand. Now IGI Laboratories has plans to do the same, having picked up 17 currently retired injectable drugs from AstraZeneca ($AZN), nearly half of which are on the FDA list.
IGI offers contract services for topical meds but this is IGI's initial foray into the injectable space. CFO Jennifer Collins said today the company is talking with contractors who might manufacture some of them to begin with, with an eye on eventually making the products itself.
"Eventually we want to manufacture them ourselves but in the interim we want to get these products back into the market as quickly as we can," Collins said. "It would be difficult before you have a product to build your own facility, so we are acquiring the products and then will build or buy an injectable facility where we would eventually make the products."
The Buena, NJ-based company announced today that it is paying AstraZeneca $500,000 in cash for 18 products, 17 injectables and one topical, and will make milestone payments of up to $6 million. It also will make royalty payments, which it also could pay off with a single $3 million outlay anytime up to Dec. 1, 2015, it said in an SEC filing today.
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| IGI CEO Jason Grenfell-Gardner |
"Expanding our development and commercial focus to include injectable pharmaceutical products will leverage our existing expertise and capabilities, and broaden our platform for sustainable growth." CEO Jason Grenfell-Gardner said in a statement. "Almost half of the products we acquired are currently listed on the US FDA shortage list, and we look forward to working closely with the U.S. FDA to return these products to the market as soon as possible."
Collins said it was not surprising for the company to head the direction because Grenfell-Gardner knows this part of the business well. He came to IGI from West-Ward, which includes the sterile injectable business of Hikma. She said while he was there, he helped West Ward with the acquisition of Baxter International's Multi-Source Injectables business ("MSI") and then helped build it into what Hikma says is the the third largest supplier by volume in the U.S. generic injectables market.
Grenfell-Gardner joined Hikma in 2004 from the investment banking industry to lead the company's initial public offering. When he left to become CEO of IGI in 2012, he was serving as senior vice president of sales and marketing for West-Ward Pharmaceuticals.
Collins said the company will work closely with the FDA to get the products back to the market and that since about half are currently on the FDA shortage list, expects that might help the company speed up the approval process. Having drugs on the shortage list, "is not good for anyone," she said.
- here's the SEC filing
- here's the announcement