New management team at IDT Australia must confront FDA warning letter

The FDA has issued a warning letter to IDT Australia. (FierceBiotech)

Struggling generics maker IDT Australia has been trying to figure out its way forward given the impact the pricing collapse in the U.S. has had on its business. It has a new executive team and a strategic plan, but now it also faces an FDA warning letter that will complicate its efforts.

The warning letter, issued this week, followed a December 2017 inspection of the IDT Australia API and finished products plant in Boronia. One of the observations noted that in more than two years the plant had failed to correct an issue it knew resulted in an out-of-spec API.

In October 2015, workers rejected an API batch for assay failure, then over the next few months, determined what it believed was the root cause. The problem, the FDA said, was that IDT never fixed the issue and continued to sell batches of the API.

“(A)s of our December 2017 inspection, more than two years after the failure, you had not implemented a corrective action to address the root cause you identified. In the interim, your quality unit released … batches of finished API.”

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Another serious issue noted by inspectors was that IDT sold a batch of an API to a client that makes sterile finished drug products despite the fact that testing showed a total aerobic count that exceeded specifications.

In a statement, the company said: “IDT’s new management team is taking this warning letter very seriously. Changes have already been made which include the recruitment of quality and operational personnel and remediation activities currently underway are directed at fully addressing the concerns expressed by the FDA. IDT is acting on this letter with the utmost priority, whilst fulfilling our current and future obligations to our customers.”

It has been almost a year since IDT undertook a strategic review (PDF) to figure out what to do with its “challenged business model.” After considering four possibilities to keep itself sustainable, it decided to “continue with selected generics where it has strengths, like cytotoxic, stop spending on those where the market has decimated pricing,  and build up its contract API and development business.”

It said it would consider selling any surplus assets, including manufacturing facilities or equipment.  

It then undertook some management changes. CEO Paul MacLeman resigned and was replaced this year by David Sparling. Chairman Graeme Kaufman and director Mary Sontrop left in February.

It also named new manufacturing and quality control professionals. Veteran Jim Sosic was made VP of manufacturing/infrastructure and Gordon Brien as VP of quality.

These new players are now faced with FDA demands over the plant. That includes its request that IDT Australia do comprehensive investigation into the extent of the inaccuracies in data records and reporting as well as a current risk assessment of the potential effects of the observed failures on the quality of your drugs.

The agency also said no new applications for drugs will be accepted until IDT fixes its problems. Its current products could be banned, as well.