The generics company announced today it is paying Boehringer Ingelheim an upfront cash payment of $225m, plus potential milestone payments worth up to $75m, for its Ohio, US-based subsidiary Bedford Laboratories.
Bedford is part of troubled contract manufacturing organisation (CMO) Ben Venue Labs which Boehringer announced it was closing in October 2013 after the cost of remediation needed to fix quality issues was deemed unsustainable by the parent company.
As part of the deal, Hikma has the exclusive right to acquire the assets of the Ben Venue manufacturing facility, which CEO Said Darwazah described on a conference call today as “one of the largest sterile injectable manufacturing sites in the world.”
Ben Venue’s quality problems and consent decree led to a halt in manufacture and shortages of customers’ products, most infamously Janssen’s cancer drug Doxil . However, during the call there were no suggestions that production would restart at the site nor that Hikma would take on the role of contract manufacturer for Ben Venue’s client base, other than Bedford’s own portfolio.
Riad Mechlaoui, Global Head of Injectables, told stakeholders that the problems at the plant are “not about the facility itself but more about the consent decree and how to remediate the quality issues, i.e. the practices and procedures.”
Therefore, he continued, Hikma would only be looking at the facility from an assets point of view – the building and the equipment – and is currently evaluating the site.
Darwazah added Hikma is “planning to tech transfer all the products to [its] existing facilities,” so if the firm buys the facility – at a price that was undisclosed – remediation and upkeep “costs will be minimal, just simple maintenance.”
He also added Bedford’s product portfolio would be transferred to Hikma’s own US FDA approved sites in the US, Portugal and Germany, with 20 products transferred initially and expected to be reintroduced from the second half of 2015.