Shire Confirms Jobs Are Safe At Northumberland-Based SCM Pharma Limited

Published: Aug 15, 2014

Shire Confirms Jobs Are Safe At Northumberland-Based SCM Pharma Limited Shire Confirms Jobs Are Safe At Northumberland-Based SCM Pharma Limited

August 15, 2014
By Jessica Wilson, Breaking News Staff

Shire Plc , an Irish-headquartered biopharmaceutical company, announced today that the jobs of 80 people are safeguarded at Northumberland, England-based SCM Pharma. Shire recently acquired the trading assets of SCM Pharma in the wake of the latter company’s loss of a manufacturing license.

Founded in 2004, SCM Pharma specialized in the sterile production of clinical-trial-stage drugs and licensed medicines for niche markets. Previous to the deal, Shire was SCM Pharma’s largest client, producing Shire’s drug Buccolam, used to treat children with epilepsy. Shire has stated that the motivation for the deal was to protect and continue the production of Buccolam and that none of the other contracts SCM Pharma had will be fulfilled.

In March 2013, the Medicines and Healthcare products Regulatory Agency (MHRA), a UK government agency that oversees the safety and efficacy of medicines and medical devices performed a routine visit to one of SCM Pharma’s facilities. As a result of the visit, the MHRA issued what is known as a GMP Non-Compliance Statement after the visit.

The inspection report stated: “A critical deficiency was cited regarding potential product cross contamination, it was found that the company were [sic] manufacturing a potent cytotoxic (Amsacrine) product in the non-potent suite. Processes intended to contain the product had failed and cleaning process and verification were weak with contamination of general manufacturing areas seen.”

Production of drugs in that area halted. After this event, SCM Pharma struggled financially due to the loss of income by the reduction of its manufacturing capacity and to the cost required to address the MHRA-cited issues. The situation sent the company into “administration,” which is a UK-term analogous to, but not exactly the same as, “chapter 11” in the US. PwC became the administrators, after which Shire exercised “step in rights” to take over production at SCM Pharma. “Step-in rights,” according to the International Law Office ,“ are common contractual arrangements in finance deals, stemming from step-in clauses that grant lenders the right to intervene or 'step in'—generally on a temporary basis—in the special purpose vehicle (SPV) in order to ensure that key contracts entered into by the SPV are completed successfully.”

A representative of Shire has stated, “Shire has worked closely with the MHRA in order to transfer SCM Pharma Limited’s manufacturing license into Shire’s name. Shire has the licenses required to manufacture Buccolam going forward. SCM Pharma Limited is now in administration and is not part of the Shire group. Shire will manufacture Buccolam in its own name.”

Fiona Cruickshank OBE, founder of SCM Pharma, has resigned.

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