Manufacturing Issues Hit Hospira


Hospira, Inc. (HSP) has been facing manufacturing issues over the past few quarters. In Nov 2012, the U.S. Food and Drug Administration (:FDA) issued a directive prohibiting Hospira from importing its Symbiq medication infusion pumps, manufactured in Costa Rica, to the U.S. The directive is a setback for the company. The facility at Costa Rica makes most of Hospira’s infusion devices and sets (Symbiq, Plum etc.).

The import ban was expanded by the FDA in Feb 2013. Following the fresh directive, Hospira is also prohibited from importing Plum, GemStar and LifeCare PCA infusion pumps, manufactured in Costa Rica, to the U.S. Hospira expects the expansion of the import ban to adversely impact its 2013 net sales by $50–$100 million. Moreover, manufacturing issues at the company’s other facilities, such as the Boulder active pharmaceutical ingredient plant, Rocky Mountain, Lake Forest and IKKT are further challenges for the company.

In another development, Hospira initiated a voluntary nationwide recall of a couple of its injectable drugs- a lot of Reglan (metoclopramide) and two lots of Zofran (ondansetron). Hospira initiated the move due to vial defects. The FDA stated that glass strand particulates due to a defect on the part of the glass supplier were the reason behind this voluntary move by Hospira.

Though Hospira has not received reports pertaining to any adverse events associated with these lots, we believe further slipups will impact the drugs’ supplies. This will create another challenge for the company to overcome.

Hospira carries a Zacks Rank #2 (Buy). Companies like Boston Scientific Corporation (BSX), Athersys, Inc. (ATHX) and Alexion Pharmaceuticals, Inc. (ALXN) too are Zacks #2 Ranked stocks.

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