Scientific Protein Laboratories (SPL) today released the detailed response of Changzhou SPL Co., Ltd. (CZSPL) to the Notice of Inspectional Observations (Form FDA 483) issued by the Food and Drug Administration (FDA) following its inspection of the CZSPL facility from February 20-26, 2008.

Robert Rhoades, an independent consultant with Becker & Associates, leading Good Manufacturing Practice consultants who assisted CZSPL in responding to the Agency’s observations, said: “My review of the inspection report and my knowledge of how pharmaceutical ingredients are produced has led to me to conclude that none of the FDA observations is linked to any deficiency in the quality of the products that CZSPL has produced to date, or to any adverse events in patients administered finished heparin drug products.”

With regard to the announcement today by the FDA regarding a contaminant found in heparin, Rhoades said: “Based on what we know, we believe that the contamination identified by the FDA occurred earlier in the supply chain. Using the very recent tests used by the FDA to detect the contaminant, CZSPL tested samples of incoming crude heparin material. The samples showed ‘peaks,’ indicating that the contaminant was in the material before it reached CZSPL. CZSPL has shared that information with the FDA.”

Rhoades added: “We do know that heparin sourced and produced in North America by SPL has not been shown to have the same ‘peak’ characteristics seen in certain lots of heparin sourced in China and has not been implicated during the investigation. Further SPL testing has shown that many lots of heparin, including from Chinese sources, do not indicate the unexpected ‘peaks’ of concern.”

Rhoades added: “The observations made by the FDA during its inspection do not indicate any fundamental or underlying problems with the CZSPL facility. The FDA inspection identified some improvements that can be made, including areas in which compliance with current Good Manufacturing Practice (GMP) regulations could be reinforced, but the product emerging from the facility was consistent with all testing standards required at the time for the heparin ingredient.”

The Company said that any implication that the processing of heparin at CZSPL is linked to the adverse events is not consistent with the increasing evidence suggesting that the problem is significantly broader than material provided by CZSPL. Clusters of adverse events have been seen in Germany among patients taking heparin that did not originate at CZSPL or its suppliers. Further, CZSPL has been producing heparin active pharmaceutical ingredient (API) in a consistent manner since 2004 but the unexplained “peaks” seen in recent, sophisticated testing have been associated only with certain lots of the API from China, most of which was made relatively recently.

In the Company’s view, the growing evidence clearly demonstrates that the heparin problem is not within CZSPL’s manufacturing facilities, and also not within those of Baxter International, the company that makes and distributes the finished product in the U.S.

SPL reiterated that unexplained “peaks” have been found only in certain lots of heparin API produced from Chinese crude heparin. Heparin API produced from North American heparin raw material has not been implicated in the recent heparin recalls, and tests to date have not identified any unexplained “peaks” in such materials. SPL said this is an important consideration as the FDA, heparin manufacturers and suppliers of heparin API seek to provide a safe heparin supply to patients, and as they continue to investigate the root cause of the problem.

CZSPL established the facility in Changzhou, China in 2001 using modern facilities and equipment specifically for the purpose of producing heparin API under current Good Manufacturing Practices (cGMP) conditions. The decision to locate a facility in China was made primarily due to the large pig population in that country compared to anywhere else in the world. The facility started making heparin API in 2004. It employs highly qualified personnel who are trained and experienced in quality system principles. CZSPL has conducted regular internal audits of its practices, has retained outside consultants to inspect its operations, and has been periodically audited by its customers.

The CZSPL response to the Form 483 provides its point-by-point evaluation of the FDA observations, any actions CZSPL proposes to undertake to address them, and the dates by which CZSPL plans to accomplish the actions. CZSPL committed to provide the FDA with periodic updates on its progress in implementing the actions described in the response.

Rhoades said: “While the actions described in the response represent enhancements to CZSPL’s existing systems, they are not fundamental in nature. They include amending CZSPL’s manufacturing instructions to describe certain routine operations with greater specificity (without changing the existing manufacturing process), clarifying laboratory investigation documentation, generating additional evidence to verify that certain standard laboratory tests function properly in CZSPL’s laboratory environment, replacing certain equipment with stainless steel vessels, and providing further evidence that certain pharmaceutical-grade packaging materials do not adversely effect the product. Some relate to the inherent difficulties faced by all companies in characterizing heparin products. While produced for decades, heparin is a highly complex substance manufactured from an animal source.”

“All of these actions, while potentially valuable, are designed to provide added assurance on top of CZSPL’s existing quality assurance procedures,” Rhoades said, “None suggests a link to the anomalies seen in certain lots of heparin product.”

SPL, which co-owns CZSPL, also has a facility in Waunakee, Wisconsin, that manufactures heparin API. The Wisconsin plant was inspected by the FDA in December of 2007 without any observations noted by the FDA inspectors, and the Company reiterated that there is no evidence linking heparin API sourced in North America to any increase in adverse events.

SPL has identified and voluntarily recalled as a precautionary measure the specific lots of heparin API derived from crude heparin suppliers in China that showed unexpected “peaks” in sophisticated testing. SPL has committed to the FDA to voluntarily remove from the market any lots of China-sourced heparin where tests have indicated the presence of extra signals or “peaks” in sophisticated nuclear magnetic resonance (NMR) spectroscopy tests and capillary electrophoresis (CE) tests. The Company has also committed to continuing such testing on all future lots of product and adopting any specific tests that may identify the presence of the contaminant.

SPL has been working closely with the FDA and Baxter to identify the root cause of the adverse events observed in patients.

NOTE: SPL today is making public a redacted version of the response by CZSPL to the FDA inspection report, with the deleted materials referring to confidential proprietary information. The Company also is making public a two-page summary of the response along with background information.

About Scientific Protein Laboratories

SPL has been a leading global supplier of high-quality active pharmaceutical ingredients (APIs) for nearly three decades. SPL specializes in biopharmaceutical manufacturing in facilities that meet the FDA requirements for current Good Manufacturing Practices (cGMPs).

SPL is among the largest commercial suppliers of heparin sodium USP, pancreatin USP, and pancrelipase USP. SPL serves the pharmaceutical, veterinary and food industries globally. Manufacturing facilities are located in Waunakee, Wisconsin and, through its joint venture, Changzhou SPL, in Changzhou City, China.

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