Baxter, Halozyme Recall Hylenex Product Over Glass Flakes
May 17 2010 - 12:11PM
Dow Jones News
Baxter International Inc. (BAX) and Halozyme Therapeutics Inc.
(HALO) said Monday that they are recalling a product called Hylenex
that is used for pediatric rehydration because there could be glass
particles in vials.
There are about 3,500 vials on the market, the companies said in
releases Monday. There haven't been any medical events or customer
complaints, but post-production testing revealed "a limited number
of vials" with flakes of glass in them, Baxter said. The injectable
product is made at a Baxter facility.
Shares of Halozyme, a San Diego-based biopharmaceutical company,
recently traded down 3.9% to $7.18. Shares of Baxter, a much larger
drug and device maker headquartered in Deerfield, Ill., slipped
2.9% to $42.27.
The recall adds to a recent spate of challenges for Baxter,
including a slowdown in the market for plasma-based drugs and the
recall of about 200,000 drug-infusion pumps, but analysts noted
Hylenex represents a tiny fraction of Baxter's sales. Sales are
expected to be just $5 million this year.
Baxter makes Hylenex based on technology Halozyme discovered,
and the two companies announced Food and Drug Administration
approval in October to launch the product for pediatric
rehydration. It allows for fluid to be administered under the skin,
rather than through intravenous injections.
Baxter and Halozyme also have an agreement surrounding
development of a subcutaneous version of a drug Baxter makes for
immune system disorders. Analysts noted that the recall at issue
Monday appears isolated to the pediatric hydration product,
however.
In connection to the recall announcement, Halozyme said Sunday
that it delivered "notice of breach" to Baxter over Baxter's
"failure" to provide Hylenex in accordance with the terms of their
existing development and supply contracts. If Baxter can't remedy
all breaches in 120 days, Halozyme said it can terminate the
Hylenex relationship.
-By Jon Kamp, Dow Jones Newswires; 617-654-6728;
jon.kamp@dowjones.com
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