Crucell reports weak Q3 results after vaccine facility contaminated

On October 28th Crucell announced that sterile operations at its Shingal facility might have been compromised and that shipments of its pentavalent and hepatitis B vaccines, Quinvaxem and Hepavax-Gene, had been suspended.

The firm said that the facility was ‘already scheduled to be vacated next year​’ adding that there were ‘no concerns in terms of product safety in relation to the use of any of the vaccines that have already been distributed’​.

Vaccines from the facility under investigation that had already reached the market were said to have been manufactured in compliance with GMP regulations and to have passed release tests and sterility analyses.

The company has now stated that ‘the investigation into the root cause of the contamination is progressing well and actions are being taken to resume manufacturing at the Shingal facility in the coming weeks​.’

Financial impact​

Crucell has stated that the contamination has resulted in a one-time inventory provision of €22.8 million for its stock of Quinvaxem vaccines, contributing to a net quarterly loss of €27.0 million compared to net profit of €10.0 million in Q3 2009.

Gross margins were significantly impacted by the provision for Quinvaxem inventory while the decrease in total revenue and other operating income is attributed to a decline in respiratory vaccine sales, due to a later start to the flu season, which ‘more than off-set’ higher sales of paediatric vaccines.

The decrease in cash from operating activities for 2010 has been ascribed to cash received in the third quarter of 2009 from the Johnson and Johnson collaboration, relating to development programs. Net cash from financing activities in the third quarter of 2009 also included the 18 per cent equity stake of Johnson & Johnson.

Johnson & Johnson offer​

Despite the downbeat report, Crucell confirmed it is still on track to be bought by Johnson & Johnson whose approximate €1.75 billion cash tender offer for all outstanding shares is scheduled for discussion at an Extraordinary General Meeting of Shareholders on 10 December.

Crucell has said it ‘would become the center for vaccines within the Johnson & Johnson pharmaceutical group’.

Since the situation at the Shingal facility has come to light, Johnson & Johnson has said it is ‘working with Crucell to understand the circumstances surrounding these events and to assess the situation’.

Karen Manson, media spokesperson for J&J told in-PharmaTechnologist that it expects the investigation to take ‘some weeks’ but ‘can’t give any further comment at this point in time​’ because it would ‘need to see what the results of the evaluation are’​.

The companies have reported that they are ‘making progress on the preparations for the intended public offer’ with J&J having filed a first draft with the Netherlands Authority for the Financial Markets for review and approval. J&J expects to be able to launch its offer before the end of November.

Crucell today announced the start of a ‘discovery program’ as part of its collaboration with J&J leading to the development and commercialization of a Human Papilloma Virus (HPV) vaccine.