Impax Laboratories Inc.’s Oct. 9 purchase of several interrelated, privately held pharmaceutical companies should bring new options to a company dealing with manufacturing woes, bringing it a new manufacturing facility as well as marketed products and a suite of generic products and pipeline candidates.

Based in Hayward, Calif., Impax had been awaiting an FDA decision by Oct. 9 on an NDA for its Parkinson’s disease candidate, Rytary (IPX066), an extended-release version of carbidopa/levodopa, but that user fee date was pushed back to Jan. 9, 2015 by a major amendment. Impax recently submitted a response to FDA in relation to a 483 letter filed for cGMP violations at its Taiwan plant and also amended the chemistry, manufacturing and controls (CMC) section of the Rytary NDA.

In a Sept. 17 note, UBS Investment Research analyst Marc Goodman said Impax had been fortunate not to receive a “complete response” letter instead. “It’s not surprising to get a delay of three months given there were changes to the NDA,” he wrote. “The question is whether the FDA will accept the responses to the Taiwan 483 letter and the amendment (CMC changes) to the NDA.”

Rytary had already received a “complete response” in January 2013, due to concerns dating back to May 2011 about manufacturing issues at Impax’s headquarters in California Also see "Impax Parkinson’s Therapy Suffers Manufacturing Setback During FDA Review" - Pink Sheet, 23 January, 2013.. The agency had cited concerns about deviations related to sampling and testing of process materials and drug products, production record review and failure of manufacturing batches to meet specifications. That manufacturing-related delay scuttled a 2010 partnership for Rytary with GlaxoSmithKline PLC[See Deal].

Impax’s $700 million buyout – split between $270 million in cash and $430 million in a loan from Barclay’s – acquires Tower Holdings Inc. and three operating subsidiaries: CorePharma LLC, Amedra Pharmaceuticals LLCand Lineage Therapeutics Inc.[See Deal] Impax CEO Fred Wilkinson told an Oct. 9 conference call that the acquisitions would add portfolio products expected to generate 2014 revenues of between $215 million and $225 million.

Getting CorePharma’s two-building, 63,000-square-foot manufacturing facility in Middlesex, N.J., not only brings Impax a site licensed by both FDA and the U.S. Drug Enforcement Agency, but a wide range of new capabilities including extended-release and controlled substances, low-share and high-share granulation, direct compression and functional and non-functional aqueous film coatings, Wilkinson said.

The site has gone through two successful pre-approval inspections and a full GMP inspection in 2013 that put it in full compliance, the exec added. “We love the concept of integrating quality initiatives and quality cultures across our manufacturing facilities with companies who have been in a spot and have come back out of that,” he said. CorePharma ran into some problems of its own in 2014 ([A#08140529008]).

No Manufacturing Transfers Planned

At present, however, Impax does not anticipate transferring any manufacturing work to Middlesex from its two existing sites, Wilkinson said.

“We have no plans to close down or do anything different with the Hayward facility. We’re working very closely with the agency and with the quality teams there to make sure that that facility is as functional and viable as possible,” he explained, adding that Impax has not had to stop any manufacturing activities at the Hayward plant. The company still makes and supplies products from there and the Taiwan facility.

“What I think this [transaction] does is give us some increased capacity, as well as increased products,” the CEO continued. “They’re a pretty busy facility in what they are producing for themselves right now. We have not put together a plan, nor are we really evaluating a plan of transferring products back and forth. We think that through the R&D efforts, we’ll be filling up most of these facilities. And I think for the first time, we’re going to give our supply chain folks the opportunity to place products in facilities based on their capabilities, not based on the capacity.”

Wilkinson explained that the three companies being acquired from Tower complement one another –CorePharma is a generic drug producer, Amedra manages supply chain and manufacturing for work done by third parties, and Lineage is a specialty pharma that is a primary customer of those two businesses.

The deal brings Impax Albenza (albenzadole) for tapeworm infections, the anaphylaxis injection Adrenaclick (epinephrine auto-injector), Daraprim (pyrimethamine) for parasitic infections and Dexedrine (dextroamphetamine sulfate) for attention deficit/hyperactivity disorder.

Impax talked up Albenza as offering it the leading position in a new specialty therapeutic area, with the product yielding attractive sales margins and strong sales growth so far. Adding that and the other branded products will enable Impax to utilize its commercial infrastructure more efficiently, Wilkinson said, while providing upside sales growth potential. Impax expects to realize $10 million in synergies from the transaction.

Competing With EpiPen

Adrenaclick is a direct competitor to Mylan NV’s EpiPen, and Impax also is obtaining a generic version of Adrenaclick among the generic products contained in the transaction. In addition, those generics include four ADHD drugs, including two generic formulations of Dexedrine, a muscle relaxant (metaxalone) and methenamine hippurate for urinary tract infections.

The epinephrine auto-injector products were launched in 2013 and Wilkinson called the two products “a huge opportunity for growth.”

In an Oct. 9 note on the deal, UBS’ Goodman said he was skeptical that Impax could succeed in competition with EpiPen. But the ADHD generics might offer high value, he added, and he was bullish on the generic pipeline potential added through the buyouts.

“The generics pipeline of 51 ANDAs ($10.7 billion in branded sales), with 16 pending approvals or re-launches, is solid and should add growth,” Goodman wrote.

Wilkinson said this pipeline consists of five products that have been approved but not yet launched, 11 that are awaiting approval and 35 now in various stages of development. It includes a few high-volume Paragraph IV opportunities, he added.

Impax Buyouts Add Plant, Portfolio And Pipeline

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