Seven months after deciding the manufacturing failings at its Ohio plant were too costly to fix, Boehringer Ingelheim has found a company interested in taking on the troubled facility. But while Hikma Pharmaceuticals has an agreement in place to buy the plant, there are caveats in the deal that could cause the Jordan-based manufacturer to back out.
Hikma gained an exclusive option to buy the Bedford, OH plant--which caused Ben Venue Laboratories and its parent company Boehringer so many problems--as part of a broader deal for injectable drugs. The plant will only change hands subject to due diligence and approvals in the U.S. and U.K., which given the facility's troubled history and Boehringer's previous willingness to give up on the site seems far from certain.
Other aspects of the deal are more definite. Hikma is paying $225 million in cash upfront and up to $75 million in performance-related milestones for the generic injectables Boehringer sold under its Bedford Laboratories brand. Manufacturing failings at the Ohio plant caused shortages of some of the 84 products included in the deal. And with the fate of the facility still uncertain, Hikma plans to move the manufacture of key products to its plants in the U.S., Portugal and Germany to end the shortage.
|Hikma CEO Said Darwazah|
"I am confident that we have the technical capabilities and manufacturing expertise to successfully relaunch the acquired products over the next few years," Hikma CEO Said Darwazah said in a statement. Hikma plans to relaunch the first group of 20 products between 2015 and 2017, with more being added later based on market need, the ease of transfer and financial considerations. The drugs generated sales of just $19 million last year, but Hikma expects them to bring in $150 million by 2017.
If Hikma succeeds it will represent a further demonstration of its ability to plug the gaps in global drug supplies. Last year its sales were boosted by doxycycline, an antibiotic that was on FDA's shortage list. With other manufacturers unable to supply the drug, Hikma cornered the market.
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