Hospira ($HSP) said on Tuesday that it was recalling more than 60 lots of the pain reliever ketorolac tromethamine injection in the U.S. and Singapore just 5 days after Pfizer ($PFE) said it would pay $15 billion for the specialist in sterile injectable drugs. In fact, on the day the deal was announced, the FDA announced a Hospira recall of the sedative propofol.
Like many of its others, the recall of ketorolac tromethamine was set off by a complaint of particulate, in this case "visible, floating particulate identified in glass fliptop vials," the FDA said. The company is looking for the root cause so it can be fixed.
Pfizer, of course, is aware of the quality issues that Hospira has struggled with for years. Its warning letters for plants in the U.S. and India, and more recently in Australia have been highly publicized, as have its frequent recalls. In late December, Hospira started a global recall of 10 lots of the cancer med mitoxantrone that was manufactured at Australian plant that the FDA spanked in a warning letter for not figuring out why tests showed its potency was too low and its impurities too high. But Pfizer is satisfied that Hospira has gotten on top of its problems.
|Pfizer CEO Ian Read|
In a call with investors, Pfizer CEO Ian Read handed off a question about how confident the company was in Hospira having gotten its house in order when it comes to manufacturing. Executive VP of Global Supply Tony Maddaluna answered, saying, "So we performed a review of Hospira's manufacturing network and had several discussions with their operations folks and their quality leadership, and we visited three key sites." That included its Rocky Mount, SC, plant, and its extensive new operation in Vizag, India, as well as device facility in Costa Rica, all of which have had issues. "As a result of this review, we feel very comfortable that the issues raised by the regulators have been addressed or are being properly addressed. Consequently, we are comfortable with the transaction based on this review."
A spokeswoman for Hospira declined to comment further on the recall on Wednesday or to say whether executives there believed the company's manufacturing issues were primarily behind it.
On Thursday, Hospira reported 2014 revenues of $4.5 billion, up 8.7% and adjusted, diluted earnings per share of $0.53, beating Wall Street forecasts. The company said its capital investments for the year were $392 million, up about $40 million, which it said was mostly for work on the Vizag plant and other plant upgrades.
In the case of the ketorolac tromethamine, the lots were distributed from February 2013 to December 2014 in the U.S. and from January 2014 to July 2014 in Singapore. The company said it has not received any reports of adverse reactions from patients who might have gotten particulate in their system.
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