- Reports from big drug manufacturer Lonza indicated that mishaps at a facility in Maryland led to an overall weaker performance of the company's bioscience business during the first quarter.
- Lonza received a warning letter from the Food and Drug Administration on April 24 for violations at the Walkersville, Md. site, which is also the bioscience unit's headquarters and largest factory. The company revealed few details about the letter, other than it flagged "technical issues" for validation protocols and aseptic processes.
- Sales from biotech and pharma operations totaled CHF4.13 billion ($4.16 billion) in 2016, a 15.5% increase from 2015, according to Lonza's quarterly financial disclosure. While the company's specialty ingredients business still makes up more than 50% of revenue, it grew just 3.3% between those two years.
Lonza's warning letter is noteworthy because it's a rare example of when the Food and Drug Administration has flagged a non-Asian manufacturing plant for violations. As of April 5, the agency had hit 21 manufacturing plants with warnings since the beginning of the year, with 18 located in either China, India or Japan.
The letter is also unusual in that it targets the company's biggest bioscience production facility. Understandably, Lonza is doubling down to get the Walkersville site back into compliance, disclosing in the Monday statement it has begun the process of addressing the issues laid out by the FDA.
"We take this situation seriously and we have already implemented corrective actions in this particular line for scientific and prenatal media supply," Lonza's CEO Richard Ridinger said during a first quarter earnings call on Tuesday. "Our cell therapy, primary cell business and endotoxin essay businesses in Walkersville were generally not affected."
The Walkersville plant sports a staff of 524 and crafts around 3,000 products for biopharma and research needs, according to Lonza. In particular, the plant focuses on clinical cell processing.
Mammalian cell and small chemical production were particularly responsible for increased sales during the first quarter. Explaining why those areas saw surges in demand, Ridinger said his company had tried "to get operational performance and throughput up, and as a consequence I think that's what's taking place in the first quarter — it boosted that part of the business."
Overall, Lonza sees the biopharma operations piece of its company being the key growth driver going forward, as exemplified by a recent CHF290 million ($292 million) deal with Sanofi for the construction of a large-scale mammalian cell culture facility and the acquisition of Capsugel in February for $5.5 billion.