UPDATED: Hospira gets FDA OK for massive India plant from which Pfizer will reap the rewards

Hospira CEO F. Michael Ball

The game is on at Hospira's ($HSP) massive new manufacturing plant in India. After two delays to work out kinks identified by the FDA, the drugmaker says the agency has signed off on it and Hospira has started "limited commercial production at the facility."

The Lake Forest, IL-based Hospira made the announcement in a financial filing today which said that with the approval, it could expect to win "U.S. product approvals from this facility in the future." This is particularly good news for Pfizer ($PFE), which has crafted a $17 billion buyout of the sterile generics and biosimilars maker. Pfizer will fold Hospira into its established products division, beefing up a unit which analysts are hoping Pfizer will spin off into a separate company.

The Vizag plant is one of three that Pfizer execs assessed ahead of deciding to take on Hospira with its history of manufacturing mess-ups. Hospira has been working on the 1.1-million-square-foot, $450 million manufacturing plant in Visakhapatnam, India for several years. It will add about 500 million additional units of sterile injectable drugs to Hospira's supply chain annually, which CEO F. Michael Ball has said should significantly reduce its overall cost of products.

The plant was slated to open at the end of 2014 but in the FDA's initial preapproval visit in March of last year inspectors found some things they said didn't measure up, leaving behind a Form 483 with 10 observations. Hospira then received an untitled letter focused on two corrective actions.

Ball assured analysts several times that the facility should be good to go on schedule but the FDA didn't return for a follow-up until February, and that didn't go as well as Hospira, and Pfizer execs, might wish. After a 10-day inspection, the plant was issued another Form 483 with 14 more observations. But now, Hospira said today, the plant "was deemed acceptable" by the regulator.

The problems at Vizag are not the only ones the drugmaker has been dealing with in India, and elsewhere. A warning letter was issued to its facility in Irungattukottai in May 2013 and the plant received another 23 observations in a follow-up inspection later that year. In fact, Hospira now has plants tagged with warning letters on four of the 7 continents: Europe, North America, Asia and Australia.

The drugmaker has made progress in finally getting its issues behind it. Ball recently told analysts that Hospira got word from the FDA that the agency had lifted the warning letter for its long-troubled Rocky Mount, NC plant as well as one in Clayton, NC. It is too late for the Clayton plant, which Hospira is closing.

- here's the filing

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