After selling a manufacturing plant in Texas to Cardinal Health two years ago, Adams Respiratory Therapeutics has reacquired the facility in order to produce its expectorant Mucinex (guaifenesin extended-release), responding to a 15-fold growth in sales in the last couple of years.
When Adams sold the plant to Cardinal for approximately $8m in April 2004, Mucinex had just been approved so focus was placed on marketing, while two years on, with the drug now established and several other products in the market, the company's attention has shifted to securing cost-effective manufacturing capacity.
The New Jersey-based company paid $28m (€22m) to buy back the 130,000-square-foot Fort Worth facility, which is the primary manufacturing and product packaging facility for its Mucinex and Humibid franchise of guaifenesin-based extended-release bi-layer tablet products.
As a result of this acquisition, gross margin is expected to increase by about 2 percentage points for those products produced in Fort Worth come 2007.
"Looking back, the original decision to sell the Fort Worth facility to Cardinal Health in April 2004, was absolutely the right decision for our company at the time," said Adams CEO Michael Valentino.
"Two years later, with several products on the market and trailing-twelve-month net sales of more than $225m, our business priorities have evolved."
Adams and Cardinal have now entered into separate manufacturing supply agreements for granulation capacity at Cardinal's Kentucky facility and packaging capacity at two other Cardinal facilities.
These facilities have previously been validated and are operational with respect to the company's Mucinex and Humibid guaifenesin-based extended-release bi-layer tablet products.
Mucinex's formulation has earned it distinction from other products in the competitive cough, cold, and flu market, yet this advantage is under threat by a generic equivalent.
Last month Mutual Pharmaceutical warned Adams not to take legal action following an Abbreviated New Drug Application (ANDA) with the US Food and Drug Administration (FDA) for Mutual's guaifenesin extended-release tablets.
Mutual argues that two patents of Adams protecting Mucinex are invalid, unenforceable, and will not be infringed upon by its guaifenesin formulation.
Mucinex is currently the only FDA-approved extended-release expectorant that provides long-lasting relief from congestion in one bi-layered tablet.
The tablet's white layer immediately releases the medication while the blue layer works steadily to continually release medication for up to twelve hours.
However, Mutual's generic copy does not have two portions containing guaifenesin but only a single extended release portion.
"Based on what we have been told about this ANDA filing, it appears that this product application employs an older, well-known matrix technology," Valentino said.
"It is our view that this applicant should be held to the same set of rigorous standards that were required of Adams."
In the mean time Adams intends to ramp up production at the Texas plant, which Cardinal has upgraded and put new equipment in.