Needham & Company Maintains a 'Hold' on Impax Laboratories (IPXL); FDA Warning Letter Puts The Brakes On New Approvals For Now Though We See Little Lasting Impact

Needham & Company maintains a 'Hold' on Impax Laboratories (NASDAQ: IPXL).

Needham analyst says, "IPXL has disclosed receipt of an FDA warning letter tied to its primary production facility located in Hayward, CA. Management disclosed in connection with release of 1Q11 results that a recent FDA inspection resulted in “several” form 483 cGMP observations so subsequent receipt of a warning letter isn’t a complete shocker given current supercharged regulatory environment. Development is a negative at the margin as it introduces new regulatory risk into the story. Given that IPXL’s valuation is tied to longer-term option value of ANDA pipeline with few high-value drivers on the immediate horizon and buzz around IPX-066 proprietary product for Parkinson’s, in our view warning letter carries little more than headline risk at this juncture given lack of any meaningful impact on production levels or continued ability to submit high value first-to-file generics."

For more ratings news on Impax Laboratories click here and for the rating history of Impax Laboratories click here.

Shares of Impax Laboratories closed at $23.29 yesterday.

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