Jazz: Lonza terminates long-term Xyrem API supply deal

By Gareth Macdonald

- Last updated on GMT

Related tags Controlled substances act Lonza

Jazz Pharmaceuticals says that API maker Lonza has terminated a long-term sodium gamma hydroxybutyrate development and supply agreement.

The compound, the active pharmaceutical ingredient (API) in Jazz’ sleep disorder drug Xyrem, is produced at the plant in Riverside, Pennsylvania that Lonza previously announced it will close by the end of the year​.

The US drugmaker said that although, Lonza remains contractually obligated to supply sodium oxybate through to the end of December 2011, it has already identified potential new long-term suppliers.

Any replacement manufacturer and its facility will need to be registered by the US Drug Enforcement Administration (DEA) and approved by the Food and Drug Administration (FDA).

For the more immediate term, California-headquartered Jazz also said it will work with Lonza to manage inventory to minimize the risk it will run out of the API, but suggested that it “may need to build significant additional supplies” ​before the plant closes.

The importance of maintaining supplies of Xyrem was highlighted earlier this month when, during its 2009 results presentation, Jazz revealed that sales of the drug had doubled to $31.6m in the final three months of the year.

Speaking at the time, company president Bob Myers cited record sales of both Xyrem and Luvox, the firm’s second biggest product in terms of revenue generation, as part of a “tremendous year for Jazz​.”

The firm also predicted that sales of Xyrem, forecast to be between $124m and $130m, will make up the vast majority of its estimated revenues in 2010.

All of which means that Jazz will be keen to find an alternative sodium gamma hydroxybutyrate supplier and publicise that it has done so well before Lonza ceases operations at Riverside.

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