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PENNEX SHIPMENTS FROM ILLINOIS PLANT HAVE BEEN HALTED

Executive Summary

PENNEX SHIPMENTS FROM ILLINOIS PLANT HAVE BEEN HALTED since mid-July as the result of GMP problems, including concerns about the facility's water system. Pennex Pharmaceuticals is currently enjoined from shipping any products from its recently acquired Morton Grove, Ill. facility under a consent order filed July 23 in Chicago federal court. The agreement was filed on behalf of FDA as a mass seizure action which was waived upon the company's agreement to the consent order. Pennex says it hopes to resume shipments from the closed plant "soon." Pennex discontinued shipping products on July 17. Under the terms of the agreement, Pennex is enjoined from shipping any product that has been "manufactured, processed, packed, labeled, stored or held" at the Morton Grove plant "except for manufacturing solely for the purpose of attempting prospective validation of processes" until FDA is satisfied that the facility is in compliance. Pennex will also pay the cost of validation inspections and court costs. Pennex purchased the Morton Grove facility from Pharmaceutical Basics, Inc. March 22 ("The Pink Sheet" March 29, T&G-9). Under the consent agreement, Pennex agreed to retain an independent investigator in order to "determine whether the methods, facilities and controls are operated and administered in conformity with...GMP regulations for drugs." Pennex hired an independent consultant in March when it purchased the facility from PBI. The complaint, U.S. v. Multi-Vita Drops with fluoride... and all other finished dosage form prescription and over-the- counter drugs located on the premises of Pennex Pharmaceuticals, alleges that the articles in question are "adulterated...in that the methods used in, and the facilities and controls used for their manufacture, processing, packing and holding do not conform to and are not operated and administered in conformity with the current good manufacturing practice requirements." Pennex indicated that one issue at the Morton Grove facility involved concerns with the water system. At least two recalls have occurred at the Morton Grove facilities since it changed corporate hands. The company conducted a nationwide recall of 315,771 units of promethazine prescription oral liquid cough and cold preparations due to subpotency. On June 4, Pennex initiated a nationwide recall of 90,371 units of lidocaine oral topical solution due to subpotency. Both recalls involved products that were manufactured before Pennex bought the plant. Pennex President Jack Van Hulst previously served as president of PBI. During his tenure at PBI, he negotiated the purchase of the Morton Grove facility (then My-K Labs) from Kun Chae Bae in 1988. Several employees working under Van Hulst at PBI/Akzo followed him to his new job at Pennex in 1992. On Aug. 12, Pennex announced an agreement to sell its Verona, Pa. OTC manufacturing facility to Rexall Sundown. Pennex Products concurrently filed for Chapter 11 bankruptcy protection for its Verona operations. Pennex Pharmaceuticals plans to continue operations of the Morton Grove plant under a new label.

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