File this under ‘uh-oh!’
French regulators told Catalent, which is a major supplier of finished medicines to the pharmaceutical industry, to suspend production at a facility after the company reported an apparent act of sabotage.
The company disclosed that the wrong capsules may have been deliberately mixed into several batches of finished product. As a result, France’s National Security Agency of Medicines and Health Products (ANSM) notified the company last Friday to suspend production at its Beinheim location, according to a filing with the US Securities and Exchange Commission.
The problem was discovered during quality control checks, and incorrect capsules were removed before being distributed to patients. Meanwhile, Catalent has notified law enforcement authorities, according to the filing. A Catalent spokesman said the incident involved products for more than one client, but the types of product were not disclosed.
Catalent believes “it is highly unlikely that the capsules could have been misplaced through unintentional human error or from failure of a control process, and that the incidents could be potentially related to a deliberate malicious action by one or more individuals,” the filing states.
Why this may have occurred, though, is unclear. The filing did not offer any explanations. The Catalent spokesman did not offer further information.
To cope with the fallout, Catalent has added “additional significant security” and measures to limit access to its products, as well as beefing up policies for production personnel, according to the filing. But to what extent this will hurt the company is not certain. The Beinheim site produces more than 2 billion doses of medicines each year.
In its filing, Catalent notes that is runs 11 facilities that make soft-gel capsules and there are 31 sites overall serving drug makers. But the company acknowledged that is “currently unable to predict the duration of the suspension and, therefore, cannot estimate the effect of the suspension on its results of operations and financial condition.”
In a note to investors, Well Fargo analyst Tim Evans wrote the Beinheim plant generates about $25 million a year in revenue, and Catalent customers can apply to French regulators for exceptions for patients who need certain medicines. This could mitigate some financial risk to Catalent, suggesting the impact may be relatively minor.
Moreover, he also expressed confidence in Catalent’s ability to sort out the problems. As a result, Evans wrote that he believes the company does not need “to make any large-scale changes to its processes at the site, which we think likely limits the duration of the shut down.”
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