Outsourcing-Pharma.com special focus
Inyx Pharma gets new life; Ashton awaits fate
Meanwhile, its larger sister site Ashton Pharma is still anxiously waiting to have its fate revealed as sale negotiations continue. Inyx Pharma is now under new management, with the entire business, including assets and staff, being sold as a going concern to a company called Pharmaserve North West on September 13. The deal ends months of nervous twitching from all those with a vested interest in the site, from employees, to customers, suppliers and investors. The new owners are said to have bagged a bargain, with the sale price rumoured to be a mere $5m (€3.5m). An industry source told Outsourcing-Pharma.com that there had been four companies placing bids on the site, although this remains unconfirmed by the administrators. Taking out the competition Pharmaserve is a new company that has been set up especially to run the acquired Inyx business and it has taken over the former Inyx operations at the site in Runcorn, where aerosols and metered dose inhalers (MDIs) are made under contract on behalf of several biopharma firms. There are very few contract manufacturers operating in this arena. Pharmaserve is owned by a holding company based in Liverpool called OBG Pharmaceuticals, which is part of the O'Brien Group. It has no affiliation with the Irish contract manufacturer, also called Pharmaserve. OBG Pharma also owns another UK contract manufacturer called Pharmasol, which also makes aerosols, in addition to creams and solid doses. In an interview with Outsourcing-Pharma.com, Kelvin Bacon, CEO of Pharmaserve said that the Inyx acquisition was attractive to the group because it was its main UK competitor in the aerosol manufacturing space and also brought it a new capability in the MDI field. "On the aerosol side we have more or less taken out our only major competitor and on the MDI side there is only one other large company, 3M which makes these on a contract basis. GlaxoSmithKline has the capability but they only make them for their own products," he said. Bacon also said that since the purchase, it has been "business as usual" for the site. "Its been difficult… but things have been going well in the weeks since we took over." "There is nothing wrong with the business, but because of the way it was previously managed it was carrying a lot of overheads. We are now running it as a small business with no overheads and it is profitable," he said. It is understood that a number of former-Inyx senior- and middle-management and administrative staff are no longer employed by the new owners. Bacon confirmed that all the Inyx manufacturing contracts are still in place and that during its time in administration the business continued to operate as normal. This appears to be validated by at least one customer from a large pharma company, who told Outsourcing-Pharma.com that "there has been no supply interruption to us from the site." Those left behind... Meanwhile, the administrators confirmed that they were continuing negotiations for the sale of the other and much larger former Inyx business in the UK, Ashton Pharma, which is based in Lancashire and produces dry powder inhalers, sterile and injectable products, solid dose tablets/capsules and blister packaging. There are whispers that a deal will close by the end of the month, although the administrator said that "the timescale was unclear" and that they could comment no further. The administrators previously told Outsourcing-Pharma.com that they would ideally like to sell both businesses to the same company, although this now seems unlikely, as Bacon said his firm was not attempting to acquire this site. The troubles first kicked off for Inyx Inc.'s two UK units when on 28 June it was announced that they were forced into administration by Inyx Inc.'s financier Westernbank Puerto Rico, due to insolvency, i.e. they owed more money than they were capable of paying back, a reported $46m for Inyx Pharma and $54m for Ashton. Westernbank sent a letter to the two manufacturing firms, along with Inyx Europe, which is an intermediate holding company that owns and operates Ashton Pharma, alleging that the three firms "were in default under the loan and security agreements," it was reported in the Securities and Exchange Commission (SEC) filing at the time. Roy Bailey and David Duggins from Ernst & Young (EY) were then appointed by the UK courts as joint administrators to the three companies. At the time they confirmed that "Both facilities are good profitable businesses… and any buyers would take on the assets and employee liabilities, while the administrators would pay off the companies' debts using the money from the sale." The debts were incurred by the businesses through the financing arrangements of the parent company so the situation these two sites found themselves in was highly unfortunate. However, it would seem considering the circumstances that they may have escaped more lightly than Inyx Inc's other businesses based in North America. The company's small business development and support services division, Inyx Canada is now closed, as is Exaeris, based in Philadelphia, a firm which focused on the commercialisation and marketing of niche pharma products, and only commenced formal operations in January 2006. By far the hardest hit though has been Inyx USA, which serves markets in North and South America from a site in Manati, Puerto Rico, in the development and manufacture of inhalation, dermatology and topical pharmaceutical products. Westernbank and Inyx Inc. chairman and CEO Dr Jack Kachkar have been fighting tooth and nail over the control and future of the site, with much legal wrangling. Business and staff at the site have been affected throughout this bitter saga - which still continues.
