Sagent recalls antibiotic after customers complain of particulates

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Sagent Pharmaceuticals ($SGNT) will soon have a new Japanese owner, but for now any recalls are all on the U.S. injectable drug manufacturer. And it has another recall to deal with, this one of an antibiotic manufactured by one of its contractors in India.

According to the most recent FDA Enforcement Report, the Schaumburg, IL-based drug company is recalling 3,990 vials of oxacillin for injection. Sagent, which specializes in sterile injectables, most of which are manufactured by a network of dozens of contractors, said the oxacillin was manufactured in India. Sagent began a recall in June after receiving two customer complaints of small, dark particulate matter seen in the solution after it was reconstituted.

Sagent had another antibiotic-related recall earlier this year. In that case, it recalled a lot of an antifungus treatment that it said might be contaminated with an antibiotic. That product also was manufactured for the company.

Sagent Pharmaceuticals got into selling sterile injectables about 10 years ago, backed by private equity money and using an unusual model. Its initial play was to concentrate on high-demand generics, but instead of manufacturing them itself, it put together a network of dozens of contractors in an effort to move quickly to be able exploit market opportunities. It has since added its own manufacturing plant in China.

With the margins on generic drugs getting thinner and costs higher, Sagent went looking for a buyer this year. Last month, Japan’s Nichi-Iko announced a $736 million deal to buy Sagent and said it expected the deal to close by the end of September.

Nichi-Iko has a pipeline of biosimilars it hopes to sell in the U.S. and wanted the U.S. company to help it get established in the lucrative market. On the other hand, it figured that Sagent could only benefit from its own manufacturing infrastructure. The Japanese company says it is the largest generic drug manufacturer in Japan by sales, with annual revenues of about $100 million.

- access the recall here 

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