Issue Date: March 31, 2008
Cambrex is hit by customer's pharmaceutical recall
Cambrex' stock took a nosedive of nearly 20% last week after a customer recalled a product for which the fine chemicals maker supplied the key active pharmaceutical ingredient (API). According to a Cambrex spokeswoman, concerns over the performance of a drug delivery system prompted the recall.
Cambrex' stock did gain back part of the loss later in the week.
Although Cambrex would not name the customer, industry watchers agree that it is most likely UCB, which recalled the Parkinson's therapy Neupro earlier this month. UCB cited "deviations from approved product specifications."
"Cambrex has not confirmed this, but in conference calls last year they talked about supplying an API for a neurology therapy that they hoped would have good growth," says Michael J. Sison, a chemical stock analyst at KeyBanc.
Cambrex suffered a similar loss in 2003 when Transkaryotic Therapies failed to win U.S. approval for Replagal, a Fabry disease treatment it markets in Europe. Cambrex had been supplying a key biologic component. Transkaryotic pulled production in-house, causing a $17 million loss for Cambrex.
The company has since sold its biologics business and now focuses on pharmaceutical chemicals. The Cambrex spokeswoman says it is too early to assess the damage from the new loss. "If the situation is fixed quickly, we expect the impact to be between zero and negligible," she says. "If not, it could be up to several million dollars in 2008."
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