Manufacturing problems at Impax Laboratories' ($IPXL) California plant first cost the company a drug approval, then a $186 million partnership with GlaxoSmithKline ($GSK). Now, it is costing 110 workers their jobs.
The Hayward, CA, company said in a statement today that it was whacking the positions, most of them from the manufacturing facility that has been at the heart of its troubles. It said it was also trimming 24 sales jobs because of a delay in release of its Parkinson's drug Rytary. The FDA has said it would not approve the drug until Impax fixed manufacturing problems. The company said much of its manufacturing for other products has been moved to a more cost-efficient plant in Taiwan. It said the downsizing should save it $10 million this year and $15 million annually going forward. It is taking a $2.4 million charge to pay for the cuts.
"To succeed, we must decrease our costs while efficiently advancing our strategic growth priorities in both our generic and brand businesses," Impax CEO Larry Hsu said. "These steps ensure the availability of sufficient investment capital to fund these priorities."
In January, Impax acknowledged the FDA had said it needed to get its plant problems resolved before it would consider approval of Rytary, an investigational extended-release capsule formulation of carbidopa-levodopa for the treatment of idiopathic Parkinson's disease. Last month, GlaxoSmithKline said it was tired of waiting for that to happen and was moving on. Glaxo in 2010 agreed to pay Impax $186 million for rights to Rytary outside the U.S. and Taiwan, and it paid Impax $11.5 million of that upfront. Since GSK backed out, Impax has called in a team of outside experts to help it figure out how to move forward and deal with the FDA concerns.
Impax has already had two years to get its manufacturing practices down at the Hayward plant since being issued an FDA warning letter. But inspectors continued to note problems last year, and a recent reinspection of the plant left the company with a Form 483 noting a dozen observations, three of them repeats.
- here's the release