In Brief: Vitamix Expands, No “Probiotic” In E.U. Ads, Mylan Misses On Meda, Akorn Hits On VersaPharm
This article was originally published in The Tan Sheet
Executive Summary
Vitamix triples manufacturing space; using ‘probiotic’ not allowed in E.U.; Meda rejects Mylan bids; Akorn acquires VersaPharm; La. blocks DXM sales to minors; and more news In Brief.
Vitamix triples manufacturing space
Vitamin manufacturer Vitamix Laboratories more than triples its manufacturing space by moving to a 23,175 square-foot facility in Commack, N.Y., the firm announced May 30. The space has three fully climate-controlled warehouses, two in-house labs and fully automated filling and packaging lines. The space will allow the firms to speed production of its meal replacement and energy drink Beverage Booster line and continue private label supplement manufacturing. The firm, which has operated in a Farmingdale, N.Y., facility, also hopes to hire 20 employees in the next two years, which would bring its staff to 31. Suffolk County supported the move with a $67,091 property tax reduction over the next five years and a $7,892 sales tax exemption for equipment and materials.
Probiotic: a health claim not allowed in E.U. ads
Advertising references to probiotics or prebiotic fiber relate to a function of the body and are unapproved health claims in the European Union, the U.K.’s Advertising Standards Authority reminds Clasado Ltd t/a Bimuno. The advertising watchdog also told the firm in a June 4 decision that the claim Bimuno Prebiotic Powder “has the most potent bifidogenic (Bifidobacteria promoting) effect of any available prebiotic” is an unapproved comparative claim. Likewise, similar claims for the firm’s Travelaid violated advertising rules. The company unsuccessfully argued that some claims for the product were allowed until May 13, 2014, because they were similar to a claim regulators gave the firm a grace period to use. The original claim, “Bimuno may reduce intestinal discomfort,” fit under the temporary safe harbor, but the other claims did not, including “support your tummy while abroad,” ASA said. ASA also said other claims suggested the products could treat disease, also not allowed. These claims included “Your body’s natural defense against ‘foreign tummy bugs.’” ASA advised the firm to discontinue the ad in its current form.
Meda rejects Mylan bids
Meda AB rejected two acquisition offers from Mylan NV, according to Informa Business Information sources. The first offer was undisclosed but speculated to be $19.61 per share, a 33% premium on Meda’s share price, and the second, which was disclosed and rejected April 28, sweetened the proposal to approximately $21.88 per share, representing a 47% premium and valuing the deal at about $6.7 billion. Meda primarily is focused on branded generics and OTC drugs in the dermatology and respiratory fields. The products include Betadine, an iodine-based antiseptic for skin and mucous membrane treatment, Vartfri/Endwarts, a wart treatment that promises to leave no scars and, a treatment for bad breath. In 2013, OTC drug sales accounted for 24% of its $1.98 billion in sales. In addition to in-licensing products over the past four years, Meda expanded its portfolio through various acquisitions, including OTC firm Antula Healthcare AB (Also see "Antula Acquisition Expands Meda's OTC Portfolio, Marketing Expertise" - Pink Sheet, 28 Feb, 2011.). Already the biggest U.S. Rx generics company, Mylan – if the deal goes through – will not only be able to increase its global sales force, but expand through specialty brands that make up two-thirds of Meda’s business.
Akorn acquires VersaPharm
Niche drug firm Akorn Inc. paid $440 million in cash to acquire private generics firm VersaPharm Inc. in a deal estimated to be worth 11 times VersaPharm’s reported 2013 EBITDA. VersaPharm brings a diverse portfolio of more than 20 drugs, including 11 abbreviated new drug applications filed with FDA, for dermatology, hemophilia, TB and other conditions. A large portion of VersaPharm’s offerings are topically delivered and will likely be manufactured by Hi-Tech Pharmacal Co. Inc., the generic and brand OTC company Akorn bought for $591 million in 2013 (Also see "Hi-Tech Deal Broadens Akorn Consumer Business" - Pink Sheet, 28 Aug, 2013.). From the VeraPharm deal announced May 9, Akorn expects to see an additional $90 million to $100 million in annual revenues. VersaPharm and parent firm VPI Holdings Corp. were owned by private equity firm Tailwind Capital prior to the acquisition. Tailwind bought VersaPharm for $50 million in 2007.
La. blocks DXM sales to minors
Louisiana becomes the sixth state prohibit minors from buying dextromethorphan-containing OTC cough medicines without a prescription, the Consumer Healthcare Products Association said May 28. Arizona, California, New York, Virginia and Washington already passed similar restrictions (Also see "In Brief: Endo Buys Somar; Neptune, Enzymotec Settle Dispute; FDA Prohibits Omega-3 Nutrient Claims" - Pink Sheet, 5 May, 2014.).
Burwell heads HHS
The Senate confirmed Sylvia Mathews Burwell as Department of Health and Human Services secretary on June 5 in a bipartisan 78 to 17 vote that followed a smooth confirmation process. Burwell replaces Kathleen Sebelius as she moves from her post as director of the White House Office of Management and Budget. It is not clear how her HHS leadership will affect policies of specific interest to the FDA-regulated industries, but she has been praised on both sides of the aisle as a highly capable manager (Also see "HHS Secretary Nominee Burwell Pledges To Promote Innovation At FDA" - Pink Sheet, 19 May, 2014.).
FDA issues registration guidance for food facilities
FDA released June 2 guidance on how it will enforce the requirement that food and dietary supplement facilities register with the agency biennially as required by the Food Safety Modernization Act. The agency notes it will consider a facility’s registration expired if the registration is not renewed between Oct. 1 and Dec. 31 of each even-numbered year. Failure to renew could result in suspension, FDA notes. The final guidance does not make major changes from the draft guidance published in April 2013.