For the second time in the last three trading sessions,
had investors furiously trying to sell their shares, this time after the maker of generic drugs said it suspended manufacturing operations and recalled its product line.
The company said Monday that it will stop making and distributing its products until it can be sure its manufacturing and testing are adequate. Able notified the Food and Drug Administraion that it's initiating the recall.
Shares of Able were sinking $1.90, or 26%, to $5.29 in early
trading. In the first 30 minutes of the session, nearly 10 million shares had been traded, almost 10 times the daily average.
The company also plans to withdraw seven of its approved abbreviated new drug applications filed with the FDA for various reasons, "including commercial reasons and the identification, in certain applications, of data upon which the company is no longer willing to rely." Able said it will continue to review its entire ANDA portfolio and pull other previously approved and pending drug applications if it identifies additional unreliable data.
Able doesn't know what added actions may be needed or what the FDA and other government officials might do. The company expects the moves to have a "material adverse effect" on its business and results of operations.
After announcing several product recalls earlier this year due to various improper laboratory practices and noncompliance with standard operating procedures, Able notified the FDA and began conducting an internal review of its operations. The company identified apparent problems with some laboratory testing practices, and as a result it recently suspended shipments of its products.
Last Thursday, shares of Able went into a tailspin after the company's
announcement that the possible lab problems would lead to additional product recalls. That same day, Chairman and Chief Executive Dhananjay G. Wadekar resigned, and Able also withdrew its prior financial guidance.
During the quarter ended March 31, Able issued recalls for generic versions of the antibiotic Flagyl, the antihistamine/antiemetic Phenergan and the antiemetic Compazine. Recently, the company also decided to recall one batch of a generic version of the stimulant Metadate-SR.
According to its Web site, Able also makes generic versions of Tylenol with Codeine No. 3, Vicodin, Ritalin, Darvocet and Tranxene, among others.