Hikma given US regulatory clearance for Eatontown facility

2nd Apr 2014 07:57

Jordanian drug group Hikma Pharmaceuticals has been told by the US regulator that its Eatontown oral products facility in New Jersey has passed inspection.Hikma has spent $45m in remediation on Eatontown after receiving a warning letter from the US Food and Drug Administration (FDA).A letter from the FDA communication followed its re-inspection of the facility in February 2014 to complete its evaluation of the corrective actions the FTSE 250 company had taken in response to the warning letter. "This successfully resolves all issues raised by the US FDA in February 2012 and all subsequent communications," the company said in a statement.Chief Executive Said Darwazah said: "The investment we have made to complete the remediation work, upgrade our manufacturing processes and strengthen our operations, provides greater quality and support for our customers and we are committed to continuing to invest in the highest quality standards. "We are gradually re-introducing products to the US market from the Eatontown facility, adding to the products we supply from our US FDA approved facilities in Jordan and Saudi Arabia. We believe there are an increasing number of attractive market opportunities for our Generics business and we are investing in our pipeline of oral and other non-injectable product forms, whilst continuing to look for further product acquisition opportunities."Broker Jefferies, in a note last December, had expected a positive reaction to any good news about Eatontown."Despite Hikma's share price move year-to-date we expect a relief rally if the inspection is positive. Hikma is increasing its capacity in Jordan for the US market which suggests to us a growing entrenchment with this business."However, with the shares continuing to appreciate, a note in March downgraded its recommendation from 'buy' to 'hold' as the group's all-time high valuations do not justify a normalised growth profile. Shares in Hikma dipped 0.4% to 1,667p at 08:17 on Wednesday.OH