Actavis production not meeting demand for new version of Alzheimer's drug

Actavis CEO Brent Saunders

Actavis ($ACT) CEO Brent Saunders has maintained that the company's plan to discontinue production of the original version of its Alzheimer's treatment Namenda and move patients to the extended-release version depended on patient and payer buy-in and being able to produce adequate supplies. The company has achieved the first two goals but has run into a shortage because production has been unable to keep up with demand.

"We're working as fast as we can to fix supply for the XR version," Actavis spokesman David Belian tells Bloomberg. He was unable, however, to give an estimate of when that might occur.

Namenda is one of the drugs that Actavis got with its $28 billion merger with Forest Laboratories in July. Earlier this year, Forest announced it would discontinue production of the twice-daily version in August, a move that forced patients to switch to the new drug before generics of the original version become available in April 2015, and one that would help Forest protect sales of Namenda.

The idea is that once they got used to the once-daily version, doctors, patients and caregivers would not want to go back, even for a cheaper option. The plan depended, Saunders said, on "ensuring that we optimize the efficiency of our manufacturing capabilities to ensure adequate supply to support the ultimate conversion to the XR product."

But in June it became evident that piece of the puzzle was not falling into place. Forest decided to continue making the original version as it worked to improve production of the new dose. Saunders said that the company was making "progress in improving manufacturing yield and efficiency," but that the changeover had exceeded expectations.

- read the Bloomberg story