Jordan's Hikma has decided to pull the trigger on a deal to take ownership of the Boehringer Ingelheim plant in Bedford, OH, one of the largest sterile manufacturing sites in the world but one that sits idle after quality issues made it too expensive to operate.
Hikma snagged an exclusive option on the plant from Boehringer's Ben Venue Laboratories in May after agreeing to buy the generic injectables Boehringer sold under its Bedford Laboratories brand. It agreed to pay $225 million in cash upfront and up to $75 million in performance-related milestones. No additional payments are required for the plant, it said in its July 24 announcement.
The site has four manufacturing plants and a Quality and Development Center, which includes an R&D pilot plant and a team of experienced employees, Hikma said. It intends to move "certain modern, advanced equipment, including lyophilizers and filling lines," to some of its other plants in the U.S. and Europe so it can get some immediate use from them as it decides whether it is worth reactivating some parts of the operations at the massive facility.
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| Hikma CEO Said Darwazah |
"I am very pleased to be acquiring the Ben Venue manufacturing site and their talented R&D team," Hikma CEO Said Darwazah said in a statement. "We believe this will meaningfully enhance our R&D capabilities and enable us to significantly expand future capacity." He also said that bringing the R&D folks on should help it more quickly get the products it acquired from Ben Venue back into the market as well as in the development of other new products.
Boehringer Ingelheim closed the site at the end of last year and laid off about 1,100 workers after years of problems and dozens of product recalls. Ben Venue suspended most operations at the plant in November 2011 and later signed a consent decree with the FDA. The temporary closure resulted in more than 80 drug shortages, including of Johnson & Johnson's ($JNJ) ovarian cancer drug Doxil. The company plowed $350 million into upgrades but last year announced it had decided to close the plant, saying the $700 million in operating losses it projected over the next 5 years were just too steep.
- here's the Hikma announcement