Lawsuits against the FDA don't normally get much traction. Luckily for Hospira ($HSP), it has one that did. A federal judge has suspended the agency's decision allowing drugmakers to market certain generic copies of Hospira's top product--but it won't recall the copies that are already out there.
New generic competition in the U.S. always makes a sales organization uneasy because layoffs usually follow. But Hospira's branded sales team faces a double whammy.
The launch of a generic of a key product in the U.S. always makes a sales organization uneasy because it inevitably means layoffs. But the last thing any sales team wants to hear is that its boss will have to lay off pretty much everyone if a generic comes to market. Yet that is what Hospira told a court is in store if it doesn't block copies of its sedative Precedex.
Amid growing regulatory action to crack down on corporate tax inversions, a top U.S. senator is urging Hospira to keep its operations at home and abandon plans to move abroad for taxpaying purposes.
Hospira's long troubled Rocky Mount, NC, manufacturing plant is troubled no more. CEO F. Michael Ball says a much anticipated reinspection of the plant by the FDA resulted in no observations. But now the FDA's focus has shifted to a new plant in India where manufacturing issues have caught its attention.
Devices and software aren't a huge part of Hospira's revenues, but they do comprise the worst performing growth segment within the company. To help turn this around, the company announced a plan to streamline and update its device offerings in May 2013; it's now about halfway to the completion anticipated during the second half of 2015.
The string of pharma M&A deals fueled by the lure of cutting taxes continues and Midwest-based Hospira is now said to be about to take the plunge. Its vehicle of choice is the medical nutrition business of France's Danone, which sources say it is negotiating to buy in a deal that could run to $5 billion.
The $218 million takeover gives Hospira an API plant and 665 staff in Aurangabad, India, furthering its ambition to become less reliant on third-party ingredient suppliers.
Hospira plans to invest $120 million in its McPherson, Kansas, production plant over the next 5 years, with the money going towards additional production lines and automated visual inspection systems.
Hospira, which had to cede market share when its own manufacturing issues led to extensive remediation at its key U.S. plant, is now benefiting from someone else's missteps.