Abraxis adds more manufacturing muscle
its drive to expand production capabilities, this time announcing
the purchase of Watson Pharmaceuticals' sterile injectables plant.
The facility is the second manufacturing acquisition Abraxis has made this year, back in February having completed the purchase of Pfizer's sizeable Puerto Rico production plant. The Watson plant in Phoenix, Arizona is capable of manufacturing lyophilized powders, suspension products, and aqueous and oil solutions. Although currently used to manufacture a number of Watson products, the plant is also used to produce products for third parties. Under the terms of the acquisition, Abraxis will serve as an interim contract manufacturer for specific injectable products currently made at the plant. The site is 200,000 sq ft. (slightly smaller than the 262,000 sq ft. Pfizer plant), with manufacturing facilities as well as chemistry and microbiology laboratories. The company anticipates the facility being used along with its existing plant in Melrose Park, Illinois, for the production of Abraxis' proprietary products such as cancer medication Abraxane (paclitaxel protein-bound particles for injectable suspension). Earlier this year Abraxis announced its intention to split the company into distinct entities, one focusing on its proprietary product business - Abraxis Oncology and Abraxis Research (the new Abraxis BioScience) - and the other on the hospital-based product business - Abraxis Pharmaceutical Products. Abraxis production at the Watson site will begin once the separation of the business is complete towards the end of the year. "The acquisition of this facility will allow us to expand our cGMP manufacturing capabilities to provide the necessary infrastructure for worldwide growth of the new Abraxis BioScience," said company CEO Patrick Shoon-Shiong. Abraxis had trouble at its Melrose Park facility earlier this year, when the company revealed that it had been issued with a warning letter from the US Food and Drug Administration (FDA), citing concerns regarding contamination and deviations from current good manufacturing practice (cGMP) at the site. The future of the Watson Phoenix site had been somewhat debated since it was acquired by the company as part of the firm's purchase of Schein Pharmaceutical back in 2000. Only a matter of weeks after the acquisition was complete, Watson announced its intentions to explore 'strategic alternatives' for the sterile injectable facility, along with another similar plant in New Jersey also acquired through the Schein deal. However, by 2004 Watson had changed its mind, and following strategic and operational reviews decided to hang on to the facility in a bid to compete in the injectables market. Other Watson facilities, including a manufacturing plant in Miami and another in Puerto Rico, fell by the wayside, closed in response to a cost-cutting drive at the company. The Phoenix site looked safe until March 2006, when Watson again decided that divesture of the facility was the best option. At that time, fifteen products, including several third-party products, were being manufactured at the plant. If a suitable buyer had not been identified, Watson planned to close down the facility by the end of the second quarter this year. However, Abraxis stepped up in time to rescue the facility and give it a new lease of life under the Abraxis name. Watson, for its part, has since followed the off-shoring route to help cut costs, acquiring two sites in India over 2006, and with plans to establish further off-shore sites as of 2008.