Biotech Values

[DewDiligence]

BAX can’t seem to get anything right these days. First, a 1Q10
earnings miss because they overpriced IVIG; then, a recall of
infusion pumps (and a $600-800M writedown); and now this.
(HALO is holding a CC at 9am ET Monday.)

http://www.reuters.com/article/idCNN1622388520100517

›Halozyme: Baxter Made Manufacturing Errors on Hylexex

Sun May 16, 2010 11:11pm EDT

NEW YORK, May 16 (Reuters) - Biopharmaceutical company Halozyme Therapeutics Inc <HALO> on Sunday said Baxter International Inc <BAX> has had "manufacturing failures" in making Hylenex, a fluid-absorption drug Baxter licensed from Halozyme.

San Diego-based Halozyme said no medical events have been reported in connection with non-compliant Hylenex. Still, it sent a notice of breach to Baxter saying it had failed to provide the drug in accordance with the terms of their development and supply contracts. If Baxter is unable to remedy all material breaches within 120 days, Halozyme said it may terminate the Hylenex relationship.

Halozyme also said in a statement it had "concerns over the the quality and capabilities of Baxter's manufacturing operations."

Halozyme said it believes Baxter's manufacturing deficiencies are specific to the "150U Hylenex" product. It said it does not believe the rHuPH20 bulk enzyme or other products containing that enzyme are affected.

The company said it is working with the U.S. Food and Drug Administration and Baxter to ensure patient safety. The two companies are also investigating the causes and extent of the manufacturing issues.

Baxter was not immediately available to comment.‹