Able decides to cut costs, sell business after FDA denies business plan

By Caroline Salls

Pittsburgh, Aug. 16 - Able Laboratories, Inc.'s board of directors has decided to immediately reduce overhead and expenses and to initiate the process of selling the company's business and assets, according to a company news release.

Able said it believes the sale proceeds will be insufficient to pay all of the liabilities owed to secured and unsecured creditors of the company.

On May 23, Able voluntarily recalled its products from the market because of concerns about the integrity of data used to obtain Food & Drug Administration approval for their sale.

At that time, Able also voluntarily suspended manufacturing and distribution of its entire product line until it could be sure that its products were manufactured and tested in compliance with standard operating procedures and current good manufacturing practices.

Since then, Able has not manufactured any products or generated any income or revenue.

In turn, Able created a proposal designed to address all regulatory concerns as well as those of its customers, users of its products, stockholders and creditors, which was declined by the FDA.

The proposal asked that the company be permitted to re-validate the product development data under new management, allowing it to re-launch products upon completion of the revalidation work without the need for full FDA review and approval.

As a result of the plan being denied, Able said it now believes it will not be able to return any of its products to market.

Because Able's reorganization plan depended on obtaining significant external financing, which in turn depended on returning some products to the market in a more timely manner, it has now determined that the business plan for a reorganization is not feasible.

In addition, in light of the FDA's decision and the need to reduce expenses, chief restructuring officer Paul D. Cottone has resigned. Cottone will continue to assist the company on a consulting basis.

Director of restructuring Richard M. Shepperd will continue with efforts to reduce expenses and to market assets.

Able is a Cranbury, N.J., developer and manufacturer of general pharmaceuticals. The company filed for bankruptcy on July 11. Its Chapter 11 case number is 05-33129.

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