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Cadence’s Manufacturing Woes Detailed; Black Eye for Baxter?

Xconomy San Diego — 

San Diego-based Cadence (NASDAQ: CADX) disclosed two weeks ago that the FDA could not approve the company’s pain reliever because of manufacturing problems, but the company didn’t provide any details. Now the FDA inspection report on the manufacturing plant has surfaced—and the details aren’t pretty.

The FDA found numerous deficiencies in the production process and discovered that one of three batches of Cadence’s intravenous acetaminophen was contaminated with a piece of nylon, three PETs (a polymer used to make bottles or clothing) and human skin. The drug is being produced for Cadence by Baxter Healthcare, a unit of Baxter (NYSE: BAX), at a factory in Cleveland, MS.

Intravenous acetaminophen is intended to be Cadence’s flagship product. Cadence licensed the drug from Bristol-Myers Squibb (NYSE: BMY), which sells intravenous acetaminophen in Europe under the name Perfalgan.

Cadence hopes to market the drug to hospitals in the U.S. as an alternative to opioid-based pain relievers, which can be habit-forming and can cause other side effects, such as constipation. Patients recovering from abdominal surgery can’t swallow the acetaminophen pills or capsules that are currently available. It should be noted that while acetaminophen isn’t addictive, it can cause liver damage.

The FDA inspection report states that Baxter must sequentially produce three acceptable batches of intravenous acetaminophen in order for the drug to receive FDA approval. So far, it seems, Baxter has failed to do so.

The report states: “The firm did not successfully produce three sequential batches for NDA submission nor did they (sic) process three acceptable batches for stability purposes.” NDA is shorthand for new drug application.

Other problems cited in the Feb. 5 inspection report include:

— Baxter’s failure to adequately validate that its manufacturing process can consistently and reliably produce intravenous acetaminophen. The report notes problems with the alkalinity and fill volumes of some vials.

— Sampling and testing was not adequate to ensure quality control. Baxter relies on visual inspection to detect particulate matter in vials but the report said this method did not appear adequate. The inspectors said Baxter hadn’t indentified the sources of contamination found in vials.

The report says Baxter told Cadence about the production problems, but Cadence didn’t include the bad news in the new drug application it submitted to the FDA. “The production of all these batches was detailed to the sponsor [Cadence] but not detailed in the NDA submission to the FDA,” the report says.

That’s a no-no, says independent securities analyst Elliot Favus. It might cause the FDA to question whether Cadence intentionally withheld information about the manufacturing problems, which could in turn further lengthen the approval process, he said.

Correcting the manufacturing problems and producing three new batches for NDA submission and stability tests could delay launch of intravenous acetaminophen by 12-18 months, he wrote.

Baxter spokeswoman Erin Gardiner said the company has already responded to the FDA. Cadence said that, based on Baxter’s responses, it continues to believe that the batches are good enough to support its application for approval. Once the manufacturing issues raised in the FDA’s report are resolved, Cadence says, it will resubmit its application to market intravenous acetaminophen.

The company believes the issues can be addressed in a timely manner, Cadence spokeswoman Jani Bergen said in an email message. It would be inappropriate to speculate on the timing of an approval until the manufacturing matters were resolved, she wrote.

Cadence shares closed at $8.49 Wednesday, down 17 percent since the company disclosed the regulatory delay Feb. 11.

The delay marks the second regulatory setback for Cadence. In November, the FDA extended by three months its deadline for completing its review of Cadence’s application to market the intravenous pain reliever. The deadline was extended to give the agency time to review additional clinical pharmacology data Cadence submitted at the request of the FDA.