Halozyme concerned about Baxter’s quality and capabilities

In a press statement Halozyme said Baxter Healthcare Corporation produced certain materials that were not in compliance with the requirements of the Hylenex (hyaluronidase human injection) agreements.

Jonathan Lim, CEO of Halozyme, expanded on this in a conference call with investors, explaining that small, flake-like glass particles have been found in vials during routine inspections. Lim added that Baxter believes this affects approximately 3,500 vials in the distribution change.

The particles are believed to have entered the vials during the fill and finish process. Consequently, Lim believes the bulk enzyme, which is produced by other suppliers and used in other Halozyme projects, is unaffected.

Baxter added in its own press statement that particulate matter was not found in testing that occurs immediately following production. However, flakes were found during stability testing of samples stored under various conditions to verify product quality over time.

Halozyme added that no medical events have been reported in connection with noncompliant Hylenex and it believes the problems are specific to 150U Hylenex. Lim said that clinical assessment of the vials found low risk to patients.

Baxter agrees with this policy and is collaborating with Halozyme, according to Lim. Both companies stated they are working together to establish the root cause of the problem.

The number of Hylenex vials affected is a small number on absolute basis, added Lim. Halozyme has notified the US Food and Drug Administration (FDA) that it is voluntarily recalling the affected vials.

Notice of breach​

Halozyme also expressed concerns over the quality and capabilities of Baxter’s manufacturing operations and this, coupled to the noncompliance, resulted in it delivering the notice of breach. Lim was unwilling to comment further on the notice of breach during the conference call.

If Baxter is unable to remedy all alleged material breaches within 120 days Halozyme may terminate the Hylenex relationship. During the conference call Lim was unwilling to answer questions about its contingency plans in the event that problems continue at the Baxter site.

Halozyme and Baxter also have a relationship covering intravenous immunoglobulins (IVIG). Baxter performs fill and finish for IVIG and Hylenex at the same site, which Lim would not name, but uses a different line and vials. Consequently, Lim expects these to be unaffected.

The IVIG relationship is separate and consequently would be unaffected by termination of the Hylenex deal, added Lim.