On July 17, 2018, The U.S. Food and Drug Administration (FDA) released a copy of a
Warning Letter (Claris Warning Letter) in connection with FDAs July 2017 inspection of the companys newly acquired facilities in Ahmedabad, India and the issuance of a related
Form-483
(Claris
483). As previously disclosed by the company, FDA had commenced this inspection at the time of the closing of the companys acquisition of these facilities on July 27, 2017. The Claris Warning Letter is based on observations identified
during that inspection.
We refer you to
https://www.fda.gov/ICECI/EnforcementActions/WarningLetters/ucm613538.htm
which contains a redacted copy
of the Claris Warning Letter.
Prior to issuance of the Claris Warning Letter, the company had timely responded to the Claris 483. Additionally, the
company has already implemented corrective actions to many of the issues raised in the Claris Warning Letter.
Coming out of the 2017 inspection, the
company did not include any 2018 revenue for new Claris product launches in the U.S. in its 2018 financial guidance. Receipt of the Claris Warning Letter does not cause the company to make any changes to its Long Range financial guidance issued in
May 2018 at this time. In addition, the company is evaluating other potential locations, including contract manufacturing organizations, to support the production of new products for distribution in the U.S., to mitigate the risk of any delay in its
ability to fully remediate the Claris Injectables facilities to FDAs satisfaction beyond the first half of 2020. These other locations could also be used to support the production of any pending product approvals.
As set forth in the Claris Warning Letter, FDA has requested a Regulatory Meeting with the company. The company expects for that meeting to occur in 2018,
with a reinspection of the former Claris Injectables facility to follow. While the company cannot guarantee the timing of any FDA inspection, the company expects for it to occur by the end of the first half of 2019.
The company will respond to the Claris Warning Letter in the time frame required by FDA.
This Form
8-K
may contain forward-looking statements within the meaning of the Private Securities Litigation Reform
Act of 1995, including with respect to statements regarding the potential impact of Claris Warning Letter on the companys Long Range guidance issued in May 2018, the approval of new products for distribution into the U.S. or the companys
ability to implement (or the cost of implementing) corrective actions. Use of the words may, will, would, could, should, believes, estimates, projects,
potential, expects, plans, seeks, intends, evaluates, pursues, anticipates, continues, designs, impacts,
affects, forecasts, target, outlook, initiative, objective, designed, priorities, goal, or the negative of those words or other similar
expressions is intended to identify forward-looking statements that represent our current judgment about possible future events. The statements are based on assumptions about many important factors, including the following, which could cause actual
results to differ materially from those in the forward-looking statements: demand for and market acceptance of risks for new and existing products; product development risks; product quality or patient safety concerns; future actions of regulatory
bodies and other governmental authorities, including FDA, the Department of Justice, the New York Attorney General and foreign regulatory agencies (with respect to the Warning Letter or otherwise); accurate identification of and execution on
business development and R&D opportunities and realization of anticipated benefits; the adequacy of the companys cash flows from operations to meet its ongoing cash obligations and fund its investment program; and other risks identified in
Baxters most recent filing on Form
10-K
and other Securities and Exchange Commission filings, all of which are available on Baxters website. Baxter does not undertake to update its forward-looking
statements.