UPDATED: Alli sale still held hostage by Roche GMP issues

GlaxoSmithKline ($GSK) has buyers interested in taking the diet drug Alli off its hands, if Roche ($RHHBY) could just get manufacturing issues fixed so it was again available. The diet pill was manufactured at a Roche plant in South Carolina until deficiencies there interrupted supplies.

Piece by piece, GSK has been able to unload the rest of its OTC business, but Alli, which was supposed to be part of the divestiture, remains on its books. The company last week said it had a deal to sell pretty much what was left of its OTC business to South Africa's Aspen Pharmacare for £164 million ($263 million). In March it sold its OTC brands in Europe to Omega Pharma, for $613 million. Omega picked up GSK's manufacturing plant in Herrenberg, Germany, as part of that deal. In December, it sold its North American OTC products to Prestige Brands Holdings ($PBH) for $660 million.

Alli is a lower-strength version of Roche's Xenical. The active ingredient for both is made at the Roche plant in Florence, SC. In February the company said manufacturing issues had interrupted production. In an email sent to FiercePharmaManufacturing at the time, the Swiss company said it was enlisting the help of an expert to get a handle on "Good Manufacturing Practice (GMP) deficiencies discovered during an internal audit," but gave no specifics. Late last month it notified doctors that it would not know until mid-May when supplies might be available.

The Wall Street Journal reminds us that when GSK launched Alli 5 years ago, it had expected the drug to sell in large measure, maybe even $1 billion a year. But it never lived up to those expectations, and sales were hindered by reports, and FDA warnings, that a small number of people taking it experienced liver damage, which might or might not have been related.

Now the company just wants to sell it. "We have had interest from potential buyers and our intention is still to sell Alli," a Glaxo spokeswoman told WSJ.

- check out the WSJ piece
- here's the shortage announcement