Impax says $700M deal for Tower will help it deal with quality issues

CorePharma last year secured an FDA closeout letter for resolving the agency's concerns over its plant in New Jersey. Now that Impax Laboratories ($IPXL) is picking up CorePharma and some sister businesses in a $700 million deal, CorePharma can share with Impax just how it managed to get that done. In fact, Impax today listed that among a long list of reasons it is buying the company.

"The transaction will provide Impax with a DEA and FDA licensed manufacturing, packaging and warehousing campus in Middlesex, NJ, and will strengthen Impax's global Quality Improvement Program with the addition of the experienced team from the companies," Impax said in a statement.

Impax undertook that "Quality Improvement Program," after getting a warning letter in 2011 for its plant in Hayward, CA. Impax's ongoing manufacturing struggles have kept the Hayward-based company from getting FDA approval for its Parkinson's drug candidate Rytary, and cost it a partnership with GlaxoSmithKline ($GSK) when it was clear approval would be delayed. That then led it to cut jobs.

Earlier this year, the company said it believed it was on the right track and it had again submitted Rytary for consideration. Since then, the FDA returned for inspections at both the Hayward plant and one in Taiwan where it had shifted much of manufacturing for Rytary. Both plants again had issues cited in Form 483s, again putting the Rytary approval in question. In September, Impax announced that that the FDA, in a procedural move, delayed until January reconsideration of the drug after Impax made changes to its application tied to its Taiwan manufacturing facility. The changes were made in response to the FDA Form 483.

The deal it announced today, which it expects to close within 6 months, is for Impax to buy Tower Holdings and subsidiaries CorePharma, Amedra Pharmaceuticals and Lineage Therapeutics. It said it will get a portfolio of branded and generic drugs in the deal, including a branded and generic version of the allergic reaction drug epinephrine. It said it expects the new lines to have 2014 revenues of $215 to $225 million. The companies also have products in their pipelines.

Impax said it also gets additional manufacturing capacity, including a DEA and FDA licensed manufacturing, packaging and warehousing campus in Middlesex, NJ, and of course the added help for getting its own issues in line.

The warning letter that CorePharma had to deal with was delivered in 2010. The FDA criticized the company's Middlesex plant for releasing a batch of drugs that did not meet specs and then not getting to the root cause of the problem. It received the closeout letter three years later in June 2013. At the time, the CorePharma CEO said the company had made a significant achievement "to ensure compliance in a sustainable fashion."

- here's the release

Related Articles:
CorePharma gets closeout letter for NJ plant
FDA procedural delay on Rytary gives Impax breathing room
FDA piles misery onto Impax with 2nd Form 483 in a week
Impax now faces FDA issues at Taiwan plant that could affect Rytary
Impax believes manufacturing issues are fixed

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