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| IGI CEO Jason Grenfell-Gardner |
Talk about selling off old products. AstraZeneca ($AZN) has unloaded 18 drugs it no longer sells to specialty generics maker IGI Laboratories. Apparently, IGI thinks it can profit from reintroducing meds that weren't worth the trouble for a drug giant.
It's a small deal. The proceeds include $500,000 up front, and then $6 million in milestones and up to $3 million in royalties. A drop in the bucket for AZ's multibillion-dollar income statement, but it could yield big money to the smaller drugmaker.
In a way, the deal illustrates one of the problems in the U.S. drug market. Drugmakers have been scrapping off-patent injectables over the past few years, because they're tougher to manufacture than pills, but don't offer the big margins of branded meds. That's triggered shortages of some important drugs.
Other companies have turned the shortages problem into opportunity. Jordan-based Hikma, for one, has fueled its growth by targeting drugs on the FDA shortage list. One of them has been doxycycline, a crucial antibiotic that's been running short for some time.
IGI could do the same thing. Seventeen of the meds AZ is selling are injectables. All were previously approved by the FDA, and 17 of them had been marketed at some point. All of them were discontinued or withdrawn. And almost half of them are on the FDA's current shortages list, IGI CEO Jason Grenfell-Gardner said in a statement.
IGI doesn't make injectable products at the moment--it specializes in topical products--but it has been looking for an opportunity to expand into the field. To reintroduce the AstraZeneca drugs, IGI plans to turn to contract manufacturers at first, and eventually move to manufacuring them itself, CFO Jennifer Collins told FiercePharmaManufacturing. That means IGI will have to ramp up manufacturing and win FDA approval for its production processes.
"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," Grenfell-Gardner said. "[W]e look forward to working closely with the U.S. FDA to return these products to the market as soon as possible."
- read the SEC filing from IGI
- get the IGI release
Special Report: Top 10 pharma companies by 2013 revenue - AstraZeneca