Andrx Under Fire From FDA

The agency finds manufacturing problems, and the company's shares sink.
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Generic-drug maker

Andrx

(ADRX)

said the Food and Drug Administration might force the company to suspend production, recall its products, and even revoke its drug approvals because of manufacturing problems.

Shares of Andrx tanked on the news Tuesday, losing $3.47, or 19.4%, to $14.47.

As a result of FDA inspections of the company's manufacturing facilities, the agency's Florida office has placed Andrx on "official action indicated" status, meaning approvals of abbreviated new drug applications are on hold.

The FDA issued a list of problematic areas following the inspection, and Andrx said it gave regulators a detailed response, including a proposed plan to correct its deficiencies. The agency hasn't yet commented on the plan.

For violations of current good manufacturing practices or other regulations, the FDA could seek sanctions against Andrx, including product seizures, fines, suspension of production and distribution, injunctions and civil or criminal prosecution, the company said. Should that happen, Andrx could see a "material" adverse effect on its financial condition.

Andrx said it's working to remedy the manufacturing issues as quickly as possible, but the timing of the resolution isn't known.

Andrx isn't the first company to run into trouble with its manufacturing practices this year. Last month,

Able Laboratories

said it would sell its assets because it couldn't comply with government standards to fix its operations.

Able, a New Jersey-based generic-drug company, collapsed in a matter of months after it said it would halt manufacturing and withdraw its products from the marketplace. The company, which said it couldn't guarantee the integrity of data used to support product applications, subsequently filed for bankruptcy protection and was delisted from

Nasdaq

.