APP Pharmaceuticals keeping pace with heparin demand

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APP Pharmaceuticals keeping pace with heparin demand
Drugmaker is the principal U.S. supplier of the blood-thinner since Baxter halted its production

By Bruce Japsen and James P. Miller

Tribune staff reporters

12:04 PM CST, March 7, 2008
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APP Pharmaceuticals Inc., which has become the nation's principal supplier of the blood-thinner heparin since Baxter International Inc. halted production because of contamination problems, said today it is confident it will be able to supply U.S. health facilities with a quality product while its rival's Chinese supply chain remains under investigation.

As a probe into Baxter's China-based supplier and the mysterious cause of deadly allergic reactions in the U.S., Schaumburg-based APP, which also gets its active ingredient from a Chinese supplier, said it was "prepared to deal with this," should the probe into its Deerfield rival last a year.

It's unclear when Baxter will be able to bring its heparin back to the U.S. market with its key ingredient supplier, Wisconsin-based Scientific Protein Laboratories unable to ship heparin from its Chinese plant, shuttered as part of the probe into the cause of adverse events in nearly 800 patients since the beginning of 2007.

"We have expanded our manufacturing capacities," APP president Tom Silberg said. "We are confident we can meet the demand of the market."

Allergic reactions to Baxter's heparin, which number into the hundreds and may be linked to four deaths, have been the focus of a Food and Drug Administration that stretches from Scientific Protein's manufacturing plant in Changzhou through village workshops and rural lots of pigs. Heparin is derived from an enzyme found in the mucous lining of pig intestines.

Similar allergic reactions have been found in Germany with a company there by the name of Rotexmedica. Rotexmedica, too, is using a Chinese supplier of heparin's active ingredient.

Rotexmedica's heparin has been linked to about 80 potentially deadly allergic reactions but no deaths, German health officials have said. APP said it has not been asked to assist with ramping up heparin production for the European market and has no regulatory approval to do so.

In the U.S., however, APP said it has been able to address the demand of the U.S. market for its product, which is largely used in hospitals in dialysis centers before heart surgery or kidney dialysis to prevent blood clots.

"We are able to respond quickly (and are able) to meet the entire U.S. demand," said Dr. Patrick Soon-Shiong, chief executive officer and chairman of APP. "In a matter of weeks, we were able to ramp up production."

Soon-Shiong made his comments during a conference call in which the Schaumburg company discussed fourth-quarter results that it released early Friday. Because the period predates Baxter's production halt, and the surge in orders that APP then received, the earnings don't reflect APP's current situation.

Results for the quarter ended Dec. 31 were also skewed by the impact of discontinued operations, related to a corporate split in which APP became a separate publicly traded firm in November, following the breakup of Los Angeles-based Abraxis BioScience Inc.

In the latest quarter, APP had income from continuing operations of $31.7 million, or 20 cents a diluted share, down slightly from the year-ago quarter's $35.4 million, or 22 cents a share.

Including the loss from discontinued operations in both quarters, APP had net income of $8.5 million, or 5 cents a share, down from 28.4 million, or 18 cents a share.

Revenues slipped to $194.6 million from $199.7 million.

bjapsen@tribune.com

jpmiller@tribune.com

http://www.chicagotribune.com/business/chi-080307heparin-fri,0,6470796.story