Subject: LyphoMed, FDA Reach Agreement On Quality Control
Date: Published: 5/20/88 74 lines
Source:  WALL STREET JOURNAL. Copyright Dow Jones & Co. Inc. 

   LyphoMed, FDA
   Reach Agreement
   On Quality Control
    ---
   By Richard Gibson
   Staff Reporter of The Wall Street Journal

   CHICAGO -- LyphoMed Inc. agreed with the Food and Drug
Administration on quality-control procedures that eventually
would allow the company to make new generic drugs.
    The procedures include scrutiny of manufacturing processes
to assure compliance with drug formulas and hygiene standards
at LyphoMed's Melrose Park, Ill., plant, which has been
operating at limited capacity.  Neither the company nor the
FDA could say how long that review might take, although
LyphoMed's chairman indicated it may be several months.
   Last November, following an inspection, the FDA halted
approval of company applications for new generic drugs.
LyphoMed is a leading maker of generic versions of drugs used
to treat cancer, heart disease, AIDS and other critical-care
 illnesses.
   John N. Kapoor, LyphoMed's chairman and chief executive
officer, said that "our rough times" had eroded the company's
customer base and perhaps cut sales 5% to 10%.  But he told
shareholders at a sometimes-tense annual meeting that
"contrary to current external perception, this company is
much stronger today than it was a year ago."
    During a question-and-answer session, three people who
apparently weren't holders were escorted from the room after
they criticized LyphoMed for raising the price on an
anti-AIDS drug, Pentam 300.  They said the price had gone up
to $99.45 a dose from $24.95 a dose in the past four years.
Mr. Kapoor said the increase reflected additional sales
costs.  A gay-rights group held an outside demonstration
against the company during the meeting.
Company officials also muffled the microphone after an
unhappy holder persisted in criticizing management's
compensation in light of the recent poor performance of
LyphoMed stock.
   Until its quality-control problems, LyphoMed had been one
of Wall Street's hottest drug stocks.  Word of the FDA accord
yesterday pushed it back up $1.375 in heavy trading, closing
at $10.25 in national over-the-counter trading.
   Under the agreement with the FDA, LyphoMed will set up a
technical task force and retain an independent consultant to
inspect the Melrose Park facility and audit manufacturing
procedures.  As of today, the plant's inventory of drugs will
be quarantined until the task force can assure the FDA that
the products are acceptable for release.
    Mr. Kapoor said LyphoMed's "pipeline" of products awaiting
approval is full, so the company is eager to win FDA
clearance to resume shipments and make new drugs.  But an FDA
official said "it's anybody's guess" when the company will be
in compliance with federal regulations.  The official added
that a phased approval of new products is possible.
The accord with the FDA, which lasts two years, allows the
 agency to make surprise inspections of LyphoMed plants and
doesn't preclude possible civil or criminal sanctions against
the company.
   Mr. Kapoor said the quality-control problems had delayed
the completion of a plant in Puerto Rico, although he
remained hopeful that it could be operating by year-end.  The
offshore plant is expected to lower LyphoMed's tax rate, he
said.

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