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Boehringer sells injectables business to Hikma for $300m

Bedford Laboratories is part of troubled Ben Venue division
Boehringer Ingelheim headquarters

Boehringer Ingelheim has sold troubled sterile injectables subsidiary Bedford Laboratories to Hikma Pharmaceuticals in a deal valued at $300m.

US-based Bedford, part of Boehringer's Ben Venue Laboratories division, has been in the spotlight in recent years as it struggled to remedy quality issues including sterility failures at the facility it operates in Ohio that have exacerbated a shortage in Johnson & Johnson's cancer drug Doxil (doxorubicin).

Boehringer had said it intended to close down the Ben Venue facility by the end of 2013, with the loss of more than 1,000 jobs, as the cost of bringing it back into compliance was prohibitive. There are still a little over 300 staff members at the plant.

Now, the Hikma deal looks like it may save the unit, which is described as "one of the largest sterile injectable manufacturing sites in the world." The UK-headquartered company has suggested it should be able to retain a proportion of Bedford's workforce although it will not yet be drawn on numbers.

In addition to the manufacturing facility, Hikma will also gain ownership of Bedford's portfolio of 84 generic injectable drugs and a number of ongoing contacts to manufacture medicines for other companies, and the company said it plans to "address critical supply shortages in the US market through the planned re-introduction of the acquired products."

Hikma's generic injectables division achieved sales of $536m last year - accounting for 39 per cent of the group's total revenues - while Bedford brought in $19m at an operating cost of $22m.

Boehringer had spent $300m to get manufacturing at the Ben Venue plant up and running at the end of 2012 after an FDA-enforced suspension, and the company has suggested it could cost another $700m over five years to bring it fully back to compliance.

Hikma seems undaunted by the challenge, presumably because it will get a near-term boost from being able to transfer production of around 30 Bedford drugs to its facilities in the US, Portugal and Germany, which should be ready for launch between 2015 and 2017.

A statement from the company suggests the Bedford may play a more specialised role in future, focusing on its lyophilisation (freeze-drying) capabilities and facilities for cytotoxic medicine production, although its eventual fate is by no means certain.

Local officials in Ohio said they were "cautiously optimistic" that the Ben Venue plant would be saved from closure.

Article by
Phil Taylor

29th May 2014

From: Sales



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