Teva expects FDA preapproval inspection of troubled Celltrion plant this year

Teva said in its first-quarter earnings report that it expects an FDA pre-approval inspection in the coming months of the plant where its partner Celltrion produces the API for Teva's migraine treatment fremanezumab.

Wall Street speculation had focused on the fremanezumab approval and rollout to happen next year because of regulatory issues with the manufacturer, but Teva said in its earnings report that while it doesn’t expect a sign-off for the drug by the agency by mid-June, it does foresee getting approval for a launch by the end of 2018.

"We do not expect to receive FDA approval on our Biologics License Applications (BLA) for fremanezumab on the mid-June PDUFA date." Teva CEO Kåre Schultz said in a Q1 2018 call after reporting earnings that beat Wall Street estimates. But Schultz said Teva does expect FDA approval this year.  

Celltrion did not respond to a request for comment about the anticipated quick turn-around. FDA warning letters can take months, if not years to resolve.

"I'm happy to inform you that we are expecting now to see the pre-approval inspection take place within the coming months, and this will have to go hand-in-hand with a re-inspection of Celltrion, a warning letter re-inspection," Schultz said. "And of course, we have high confidence that both these inspections will be passed, and that means we will be able to get approval and launch before the end of 2018."

Analyst firm Jefferies wrote in a letter to investors that the news "could now be construed as a ‘best case’ scenario as warning letters often have led to delays of up to 18 months or more."

The problems for Celltrion, and Teva’s rollout of the migraine drug, began last fall when the South Korean API maker received an FDA Form 483 for the facility where it also produces biosimilars. Initially, Celltrion called the FDA citation routine, but the agency elevated its concerns by issuing a warning letter in February.

In its warning letter, the FDA criticized the company for having poor practices in the aseptic fill area and ordered Celltrion to do a retrospective assessment of all media fills for the last four years. It also pointed out issues with the plant’s investigation of visible particles in finished drug products that were bound for the U.S., among other things.

The warning letter was confined to the finished product portion of the massive Celltrion plant but Teva’s yet to be approved headache was caught in the crossfire.  

The facility also makes the APIs for the biosimilar candidates for Rituxan and Herceptin, which Celltrion has agreed to share with Teva in the U.S. through a licensing deal that cost Teva up to $160 million.

Teva has said it will exercise more control over its biologics manufacturing in the future when construction of its biologics plant in Ulm, Germany, is completed in 2020. The company announced earlier this year it was investing about $200 million in the facility.

In addition the promising outlook for its manufacturing partner, Celltrion, Schultz gave an update on the company’s efforts to downsize its own manufacturing network, according to a transcript of the call from Seeking Alpha. Teva’s plant closures are key to its plan to cut 14,000 jobs and $3 billion in annual operating expenses.

Schultz said that through consolidating, "divesting or closing redundant sites" it has identified 10 plant closures since December. Its total workforce numbers have been slashed by roughly 6,200 in the same time period, putting the company slightly ahead of schedule on its staff reduction plan.

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