Hospira fails latest inspection at Rocky Mount

Two weeks ago Hospira ($HSP) CEO F. Michael Ball said the crucial FDA re-inspection of the company's Rocky Mount, NC, plant was under way and he was excited for it to happen.

"It is like studying for a test for a year-and-a-half and suddenly it arrives,"  Ball said in an earnings call. That excitement had melted to disappointment. Turns out the company failed the exam.

In a filing Tuesday with the Securities and Exchange Commission (SEC), Hospira said that it had been handed a Form 483 outlining 20 concerns, three of which were repeat violations. The observations came after 5 inspectors spent three weeks going back over the plant and the upgrades that are part of a $375 million remediation Hospira has launched at a number of its manufacturing sites. It said some of the issues were slated to be addressed in a later phase of that remediation and that it is "seeking input from the FDA regarding the scope and timing of remediation efforts at the facility."

In the earnings calls, Ball had said the outcome of the inspection would affect Hospira's production schedule and earnings this year but that it was counting on passing and further ramping up production of key products. The company today acknowledged the new 483 could alter its plans.

Problems at the Rocky Mount plant were first noted in a warning letter in 2010. Since then the company launched into a major overhaul of its U.S. manufacturing network including plants in Clayton, NC, Austin, TX, and Boulder, CO. But even as the re-inspection was under way, Hospira last week issued three recalls of 5 products, some because of particles found in retained samples. GlaxoSmithKline ($GSK) has recently sued Hospira over some of the problems, seeking more than $25 million after Hospira was unable to fulfill a contract to make vaccine for GSK. 

- here's the Hospira SEC filing