The trading assets of a Northumberland pharmaceutical firm have been acquired by one of its major customers in a deal triggered when one of its licences was revoked.
SCM Pharma’s assets have been acquired by Shire, a business the Northumberland firm has been manufacturing a drug treatment for, in a move which is understood to safeguard all of the 80-strong workforce spread across its Prudhoe and Newburn sites.
Established in 2004, SCM Pharma specialises in the sterile production of drugs destined for clinical trials, along with licensed medicines required by patients in niche markets.
However, the business ran into difficulties in March after one of its many manufacturing licences was stopped following a routine inspection at its Prudoe facility by the MHRA (Medicines and Healthcare products Regulatory Agency), meaning production had to come to a halt.
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 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.”
The firm is now going through a lengthy process to get the licence reinstated – but the cost implication impacted heavily in the firm, leading major client Shire Pharmaceuticals to step in. Administrators PwC confirmed Shire has acquired the trading assets.
The name SCM Pharma is in administration but Shire is believed to be taking on the whole business, although it has not yet been established if the North East firm will be rebranded to come under the Shire umbrella.
The firm’s founder and shareholder, Fiona Cruickshank OBE, said: “Following a scheduled inspection in March by the MHRA at the SCM Pharma site in Prudhoe, SCM Pharma voluntarily suspended selected manufacturing operations at the facility as a result of a critical observation made during the audit.
“This outcome formed part of a wider industry trend this year that has seen several sterile pharmaceutical manufacturing sites in the UK also fail to fully meet the MHRA’s criteria.
“Between March and July 8 2014, the non-exec team including myself at SCM Pharma worked tirelessly with the senior management team and the MHRA to address the issues at Prudhoe and agree a remediation plan.
“However, given the high costs associated with operating a complex manufacturing business, SCM Pharma did not have the funds to operate with limited manufacturing and also invest in the agreed remedial work required to address the issues raised.
“Under the terms of its current loan agreement Shire informed us of its intention to exercise its step in rights as the company’s largest client.
“Following a successful MHRA inspection of the Newburn site, I decided to resign my position as non-exec director and handed over the operational responsibility to a competent management team and Shire knowing the non-exec directors and I had done everything we could to retain jobs at Prudhoe and Newburn.
“I am saddened to see that Shire has decided to take the business into administration but hopefully the hard work of the non-exec directors over the last few months prior to resignation will ultimately help safeguard many of the jobs that have been created over the last few years and ensure the sites can continue to supply medicines to patients, albeit under different ownership.
Dianne Sharp, the regional director for CBI who was managing director at SCM Pharma until the start of this year, added: “I hope that Shire Pharmaceuticals have positive plans ahead for the business, which will safeguard all of the North East jobs as well as drive the business forward.”
Shire were unavailable for comment.