Impax settles lawsuit related to manufacturing issues for $8m

By Zachary Brennan

- Last updated on GMT

Impax settles lawsuit related to manufacturing issues for $8m

Related tags Impax Food and drug administration

Hampered by manufacturing issues, Impax Laboratories has decided to settle a lawsuit over allegations related to the issues in order “to eliminate the uncertainty, distraction, burden and expense of further litigation,” the company said in a SEC filing.

The $8m settlement includes a “full and complete release of all claims that were or could have been asserted against the Company​” and Impax said it will not take any charges for the settlement as the $8m will be covered by the company’s insurance policy.


Plaintiffs in the lawsuit​, which included investors that lost hundreds of thousands of dollars when the company’s stock price fell last year, alleged that Impax made “false statements and omissions​” related to FDA inspections and adverse findings at Impax’s manufacturing facility in Hayward, California.

Despite troubles related to the FDA inspections, plaintiffs said that Impax made statements throughout 2011, 2012, and the first two months of 2013 “indicating that the FDA’s concerns were being addressed, and that it did not expect the regulatory violations, or the steps being taken to remedy the violations, to have a substantial negative impact on its manufacturing, research, or development operations​.”

However, on March 4, 2013 -- two months after the company’s NDA for its Parkinson’s treatment Rytary was rejected​ for manufacturing issues -- Impax announced that the FDA had completed another inspection of the Hayward facility, and found twelve problems at the facility, three of which were repeat violations.

As a result of its failure to comply with these regulations, Impax indicated that it was now expecting significant delays in launching launch several key drugs in the company’s line of products​,” plaintiffs alleged.


In May, 2013, the company hired specialists​ to help sort out the manufacturing issues, but a little more than a year later, the company’s manufacturing site in Taiwan was hit with an FDA Form 483​ with 10 observations. That letter cited the company for not appropriately validating equipment, as well as for out-of-specification test results.

Impax spokesman Mark Donahue told us that there is “no update on the Taiwan facility​,” but the company has amended the NDA that was rejected back in 2013 and the PDUFA date, which is the date by which the agency has to approve or reject the treatment and was originally set for Oct. 9, has been pushed back by the FDA by 90 days.

In August of this year, Impax also announced that it received another Form 483​ at the Hayward site from the US FDA with seven observations, including two that were repeat observations.

The settlement with plaintiffs still remains subject to preliminary and final court approval and certain other conditions, and does not resolve the related shareholder derivative litigations, according to Impax.

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