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Impax Shares Plunge 17% After FDA Warning On Continued Manufacturing Issues

Shares of Impax Laboratories, Inc. (IPXL) plunged nearly 17 percent in extended trading on Monday after the generic drug maker was issued a second warning letter by the U.S. Food and Drug Administration (FDA) following the completion of a re-inspection of its Hayward manufacturing facility.

"We have committed significant resources in our efforts to meet FDA requirements and are clearly disappointed by this news," President and CEO Larry Hsu said in a statement.

Hayward, California-based Impax was initially issued a Form 483 in March 2012 by the FDA that identified several manufacturing problems at its Hayward facility.

A second Form 483 was issued after the latest plant inspection, which found continuing problems at the Hayward manufacturing facility. The issues could affect the company's new and pending drug applications.

The FDA has listed out twelve observations in the new form 483, with three of them being designated as repeat observations from inspections that occurred in the first warning letter.

The company noted that resolving the FDA concerns remains a top priority and it intends to work diligently to address the issues as quickly as possible. The company added that it will respond to the FDA observations within the fifteen business days from the receipt of the second Form 483.

Additionally, the FDA also conducted a pre-approval inspection (PAI) for its Parkinson's drug candidate Rytary, and a general good manufacturing practices (GMP) inspection. Rytary is an analytical method validation and a portion of the stability data were generated in Hayward. The company had planned to launch Rytary in the first half of 2014.

Among the other findings. the FDA found problems related to the testing and evaluation processes for its drug candidate Rytary. The company is also charged of failing to identify the cause of broken tablets of its anti-inflammatory drug Carprofen.

"The analytical method assessment observations arose from our internal work and review as a part of the ongoing quality improvement program designed to assess and enhance our Quality Control Laboratory Analytical Methods and to ensure they meet or exceed internal and industry standards," hsu added.

Impax's problems began way back in May 2011, when it received a FDA warning letter related to related to an on-site inspection of its Hayward facility conducted between December 13, 2010 and January 21, 2011.

The letter cited deviations from current GMP for finished pharmaceuticals related to sampling and testing of in process materials and drug products, production record review and process for investigating the failure of certain manufacturing batches (or portions of batches) to meet specifications.

The company had then conducted a voluntary recall in March of 2011 of five lots of its generic cholesterol drug Fenofibrate capsules 200 mg at the wholesale level and took additional remedial actions.

IPXL closed Monday's regular trading session at $20.00, unchanged on a volume of 2.34 million shares. However, the stock plunged $3.35 or 16.75% in after-hours trading.

by RTTNews Staff Writer

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