3.) Impax Ineptitude

Come on, Impax ( IPXL). Clean up your act already!

The generic drug maker revealed this week that the Food and Drug Administration found 12 so-called "observations" -- three of which were repeat problems -- at its U.S. manufacturing plant in Hayward, Calif. The news sent the company's shares tumbling over 26% Tuesday.

"We have committed significant resources in our efforts to meet FDA requirements and are clearly disappointed by this news," said Impax Chief Executive Officer Larry Hsu in a statement. "Resolving the FDA concerns remains a top priority and we intend to complete this work as quickly as possible." The company said it will respond to the FDA within 15 business days, as required by law.

Sorry Hsu, but that's just silly. How can you fail a plant inspection for a second time? Did you not pay attention to the quality problems that undid former Johnson & Johnson ( JNJ) CEO Bill Weldon?

Heck, most teenagers are smart enough to straighten up their rooms immediately after their parents threaten to take away the car keys! How lazy can you be?

Meanwhile, Hsu's slip-up is all the more serious because the approval of its Parkinson's drug Rytary is at stake. The FDA mandated a re-inspection of the Hayward plant after it rejected Rytary in January. If the drug is approved, Impax will sell Rytary in the U.S. and Taiwan while GlaxoSmithKline ( GSK) will hawk it throughout the rest of the world.

That said, all hope is not lost, says Piper Jaffray analyst David Amsellem. Despite the stock's shellacking to $15 a share, he is keeping his "Overwright" rating based on the belief that battered Impax is now take-out bait.

"We would caution against an overreaction given our view that a possible sale of the company is a realistic alternative toward unlocking the considerable value of the generics pipeline and Rytary. Given the strong cash position (near $9 per share by late 2014) and a restive shareholder base, we believe an evaluation of strategic alternatives is a real possibility," opines Amsellem.

We're not so sure Dave. Those "restive" shareholders probably unloaded their shares in this latest selloff, putting your $27 price target well out of reach even if there is a buyout offer.

And as for the possibility of such a "strategic" alternative even taking place, considering the current status of the Hayward facility, well, we have a better alternative for Hsu if he survives this embarrassing episode: Fix your damn plant!

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