Elite Pharmaceuticals, Inc. (OTCBB:ELTP) advises that the US Food and Drug Administration (FDA) announced that it intends to remove approximately 500 cough/cold and allergy related products from the U.S. market. Elite currently manufactures two of the drugs impacted by the FDA's action which are marketed by ECR Pharmaceuticals, a wholly owned subsidiary of Hi-Tech Pharmacal, Co., Inc.
According to the FDA press release, manufacturers must stop manufacturing the affected products within 90 days after March 3, 2011 and must stop shipping these products within 180 days after March 3, 2011.
In addition to receiving revenues for the manufacture and contract laboratory services of these products, Elite receives a royalty on in-market sales from ECR Pharmaceuticals. Revenues generated from these products totaled $3.02 million for the 9 months ended December 31, 2010, representing substantially all of Elite's revenues for the period. The Company's inability to manufacture these drugs could have an adverse effect on its revenues.
As disclosed by Hi-Tech Pharmacal, ECR Pharmaceutical initiated in 2010 a formal approval process with the FDA regarding Lodrane® 24 and Lodrane® 24D and ECR will continue to actively pursue approval for both products.
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