May 12, 2015

Small label error, big cost for Cody Labs


A minor labeling mix-up at a Cody drug manufacturer is expected to cost its parent company around $2.4 million.

A small number of bottles of an anesthetic produced at Cody Laboratories were recently mislabeled as holding 10 milliliters of the drug when they actually held only four milliliters.

 The product's label as of 2010, taken from the U.S. National Library of Medicine
Lannett Company CEO Arthur Bedrosian announced the error on a Wednesday conference call with analysts and Lannett investors in which he discussed the business’ most recent quarter. The publicly traded company, which owns Cody Labs, voluntarily recalled the mislabeled lot after discovering the mistake, Bedrosian said.

“We believe this is a minor issue, as use of the (mislabeled) product is not considered to present a health risk, and product quality was not affected,” he said.

Bedrosian said Cody Labs has ordered new equipment designed to prevent the problem from happening again and has implemented additional quality controls in the meantime.

Lannett CFO Martin Galvan said the mistake would cost $2.4 million.

The product in question is called C-Topical, a local anesthetic made of cocaine hydrochloride. It's primarily intended for use by ear, nose and throats doctors during surgical procedures, according to label information and Lannett statements.

“While there’s been a little set back with regards to the recall — and it was a minor one, nevertheless it was a costly one — we do think that the product’s upward trend is still there,” said Lannett CEO Arthur Bedrosian.

C-Topical is the first branded product offered by Lannett Company, which otherwise manufactures and sells generic medications. The company currently has the topical solution in a clinical trial and has a group of salesmen actively marketing the product.

“We do see an increase in revenue coming from this product, and we do see a success in this product's potential outlook for us,” Bedrosian said on the call, which was transcribed by the website Seeking Alpha. “So while there’s been a little set back with regards to the recall — and it was a minor one, nevertheless it was a costly one — we do think that the product’s upward trend is still there.”

Lannett is based in and has manufacturing plants in Philadelphia, but the Cody Labs facility is where the company develops and manufactures active pharmaceutical ingredients.

Lannett officials have set a goal of increasing their focus on painkillers and have discussed expanding Cody Labs to help with that effort.

“As the company continues to invest in, and focus, on process and manufacturing optimization, Cody Labs will continue to be an important part of our future growth plan,” Lannett said in last week’s earnings report.

“Cody Labs will continue to be an important part of our future growth plan,” Lannett says.

Eying the jobs that would come with an expansion, Wyoming lawmakers made money available last year to help finance such a project, but Lannett and Cody Labs have not yet decided if they’ll seek a state loan.

Between January and March, Lannett reported net sales of $99.4 million, with a gross profit of $75.6 million, or 76 percent.

0 comments:

Post a Comment

Copyright © Cody News Company | Powered by Blogger

Design by Anders Noren | Blogger Theme by NewBloggerThemes.com