AKORN IN-HOUSE DRUG MANUFACTURING WILL RESUME IN THIRD QUARTER

AKORN IN-HOUSE DRUG MANUFACTURING WILL RESUME IN THIRD QUARTER, at Akorn's newly acquired Taylor Pharmacal subsidiary in Decatur, Ill., the firm said April 15. The Abita Springs, La.- based company previously manufactured approximately 40 OTC and grandfathered generic pharmaceuticals at its Walnut subsidiary in Los Angeles. The company ceased production in July 1991 due to regulatory problems. Akorn will file amended ANDAs for the transfer of production of its 11 injectable and nine ophthalmic multisource prescription products to the Taylor facility by mid-1993, the firm says. Priority ANDAs for the company include gentamicin, sulfacetamide, prednisolone, and tropicamide. Since closing the Walnut plant in July, Akorn has contracted with "alternate supply sources for virtually all products" that had been manufactured there, the company said in its 1991 annual report. While Walnut was operating, its products represented 40% of Akorn sales. The remainder were obtained from other manufacturers, chiefly Bausch & Lomb subsidiary Pharmafair. Akorn closed the Walnut facility after FDA inspections in April and July 1991 found good manufacturing practices violations. The company issued recalls in March and June 1991 for several of its products ("The Pink Sheet" Aug. 26, 1991, T&G-15). Other recalls were issued in August, September and December. Although it had originally intended to modernize and renovate Walnut to bring it into compliance with GMPs, Akorn said this proved to be too expensive. The facility is for sale. Batch records of Walnut-produced products are currently being reviewed by FDA to determine if further recalls are needed, Akorn said. This is the third time the records have been reviewed: an internal audit by Akorn ended in the fall of 1991 and a review by outside consultants was completed in January 1992. Akorn predicted that the FDA audit would be completed by the end of April. Akorn acquired Taylor, a contract manufacturer of injectables, on Jan. 15. Akorn will pay a maximum of 1 mil. shares of its stock for the privately-held firm, dependent on the outcome of outstanding litigation against Taylor. A product liability judgment of $1.8 mil. was issued against Taylor by default in November. Akorn said Taylor "was not properly defended" and is pursuing recovery of the losses and hopes to have the judgment vacated. Due to the judgment, Akorn said it "will reduce the number of common shares to be issued to Taylor by approximately 900,000 shares." More Akorn shares will be issued to Taylor shareholders "contingent on the recovery of any losses caused by the judgment." On April 22, Akorn announced its acquisition of exclusive U.S. rights to NAAXIA from French firm Therapeutique et Applications. The compound is a "mast cell stabilizer," Akorn said, "to treat ocular allergic reactions." NAAXIA is "the leading product in the allergic ocular market" in France, Akorn said. Due to costs related to the acquisition of Taylor, the closing of the Walnut subsidiary, and the recall of Walnut products, Akorn said it expects to report losses up to $6.5 mil. for its third quarter, ended March 31, and a loss of as much as $8.5 mil. for the year ended June 30. For the year ended June 30, 1991, Akorn lost $4.6 mil. on sales of $15.9 mil. Privately-held Taylor Pharmacal posted sales of $4 mil. in 1991. In a Jan. 16 release, Akorn president and CEO Barry LeBlanc said Akorn "will be modestly expanding the Taylor facility in order to accommodate the Akorn product line" and "Taylor will continue to contract manufacture for third parties as capacity permits." Akorn stated that Taylor's contract business currently uses "less than 50% of Taylor's present capacity."