UPDATE 1-J&J target Crucell resumes Korean vaccine production

Thu Jan 13, 2011 9:53am EST

Related Topics

* Vaccine shipments waiting for regulatory approval

* WHO to release final report by end of Jan

* Crucell shares up 1.7 pct

(Recasts with Crucell confirmation, adds details)

By Aaron Gray-Block

AMSTERDAM, Jan 13 (Reuters) - Dutch biotech Crucell CRCL.AS said on Thursday it has resumed making its paediatric vaccines at a South Korean plant after it was forced to stop production last year because of contamination.

Crucell, the target of a takeover by U.S. healthcare group Johnson & Johnson (JNJ.N), halted shipments from the facility in October because of microbiological contamination, sparking concerns that J&J might withdraw or lower its 1.75 billion euros bid for the company.

"We have restarted production but...we are not shipping new product until we receive formal approval from the Korean FDA," Crucell spokeswoman Oya Yavuz said, confirming earlier comments from the World Health Organisation (WHO).

Alison Brunier, a WHO spokeswoman, also said Crucell's vaccines cannot be supplied to international agencies such as UNICEF until the WHO gives its final assessment of the manufacturing setback and the steps Crucell has taken to resolve the problem.

Shares in Crucell were up 1.7 percent at 24.43 euros at 1435 GMT, just under J&J's offer price of 24.75 euros in a negative Amsterdam market.

The WHO previously said it had received Crucell's final report about the incident in December and it is now being reviewed by internal and external experts. The WHO expects to publish its conclusions before the end of this month. [ID:nLDE6BS0SO]

Crucell has already started distributing unaffected doses which were produced before the contamination.

Crucell's childhood vaccines product Quinvaxem treats five deadly diseases and had been a strong driver of growth before later coming under pressure from new rivals Panacea Biotech (PNCA.BO) and Sanofi-Aventis's (SASY.PA) Shantha Biotechnics.

UNICEF spokeswoman Joan Howe has said the supply shortfall created by the temporary suspension of production at Crucell was covered by adjusting vaccine shipments to a number of countries and UNICEF does not expect to award new contracts in 2011.

"WHO pre-qualified manufacturers of pentavalent are producing to the best of their ability and awarding new quantities is therefore not an option during this period of decreased availability," Howe added. (Reporting by Aaron Gray-Block; Editing by Sara Webb)

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