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J&J Probes Crucell's Manufacturing Mishap

From Associated Press (October 29, 2010)

NEW BRUNSWICK, N.J. -- Johnson & Johnson said Friday it is looking into possible contamination issues at a South Korean drug facility owned by a company that the American health care giant is acquiring.

On Thursday, Crucell NV of The Netherlands said it is temporarily holding all shipments of two vaccines at its Shingal facility because of possible contamination. The company expects to resume shipping before the end of November.

Earlier this month, J&J announced it is buying Crucell for about $2.41 billion, allowing the company to gain a large foothold in the coveted vaccine business.

Crucell is a major vaccine supplier to UNICEF and developing countries. It also develops medicines that use antibodies to zero in on organisms causing infectious diseases.

It currently sells vaccines targeting respiratory infections, diseases that strike children and travelers, and diseases common in developing countries, such as malaria, cholera and typhoid.

Crucell's facility problems come on the heels a slew of embarrassing recalls by J&J. Over the past 13 months, the company has announced 10 product recalls involving tens of millions of bottles of Tylenol, Motrin and other nonprescription drugs.

J&J also said in its Friday statement that it filed a first draft of the Crucell offer document for the acquisition with the Netherlands Authority for the Financial Markets for review and approval.

J&J expects to obtain final approval before the end of November. The U.S. Securities & Exchange Commission will also be able to review the offer.

The company is obligated under Dutch law to give a public update on its acquisition within four weeks of its announcement.

Shares of J&J slid 25 cents to $63.49 in after-hours trading. The stock closed up 18 cents at $63.74 on Friday.


Posted: November 2010