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Cantrell Drug Company Announces Reorganization

Continues with Plans for Future Expansion

LITTLE ROCK, Ark.--(BUSINESS WIRE)-- Dr. James L. McCarley, Jr., Chairman and CEO of Cantrell Drug Company, https://cantrelldrug.com/ a 503B Registered Outsourcing Facility, announced that his Company has filed for re-organization under Chapter 11 of the U.S. Bankruptcy Code. “Above all I want to make it clear to everyone that our intent is to pay one hundred cents on the dollar to all our creditors. We have no intention of any sort of liquidation, cram down or write off. I’ve asked our vendors to work with us, to give us time to get back on our feet. So far, I’ve been very pleased with the understanding and support we’ve received from the trade.”

Cantrell Drug Company, founded in 1952, provides sterile injectable pharmaceuticals that are primarily used in hospitals. These are drugs that are either in short supply or those that require compounding in order to prepare the medication in a final form for administering to patients. Cantrell’s products offer significant cost savings to hospitals who are under tight budget constraints.

“To our hospital customers, I understand that you rely on Cantrell Drug and that drug recalls and production shutdowns create headaches in your supply chain,” said Dr. McCarley. “It’s my intent to restore the goodwill and trust we’ve worked so hard over the years to gain. Our goal is to come out of Chapter 11 in a minimal amount of time and to pursue our expansion plans that have been in the works for the last year. We will emerge from all this as a stronger, better Company.”

Dr. McCarley noted that the current financial stress is due to two FDA inspections in the last year that resulted in temporary suspension of product manufacturing and shipping “Our deficiencies were regulatory in nature and not in response to any product problem or patient illness. Out of an abundance of caution, we ceased production two times in the last eight months. We’re a privately owned, family business, and we just don’t have the resources of a big publicly traded pharmaceutical company to weather the economic consequences of a shutdown; hence, the reorganization of our Company. I’m paying for operations and payroll out of my own pocket at this point. My wife, Lynn, who co-owns the Company with me, and our family is determined to get through all this.”

As an example of other drug company shut downs, Dr. McCarley referenced Pfizer subsidiary Hospira which issued a nationwide recall, in May of its vials used to inject sodium bicarbonate, citing sterility concerns from the FDA. The recall exacerbated the shortage of the potentially lifesaving drug.

“I’m not here to blame the FDA or anyone else for that matter,” said Dr. McCarley. “I’m the CEO, and I take full responsibility for our Quality Assurance (QA) and Quality Control (QC). We’ve been working diligently with the FDA to address their concerns. I know the shutdowns and interruption of product shipments adversely affect our hospital customers. With this in mind, I’ve made the decision to outsource the authority for batch release and other aspects of our QA/QC department to Escalate Sciences, an FDA/cGMP third party expert firm. Escalate will have complete autonomy to release lots and run our quality unit to avoid any appearance of a conflict.”

Dr. Edgar Torres, Ph.D, Founder & President of Escalate commented: “Cantrell Drug has proactively contracted us to provide quality oversight and support their Quality Systems Remediation Program. We look forward to working and collaborating with Cantrell Drug Management in the Quality Systems Remediation efforts and on the continuous improvement of their Quality Culture.”

Cantrell Drug Company’s current 20,000 square foot GMP facility includes production (laboratories and cleanrooms), quality assurance, warehouse, and office space. After exiting reorganization, Cantrell will continue efforts to raise capital for its planned expansion into a second production facility for the capability to handle higher volumes and to add redundancy for emergency preparedness. The planned expansion facility is approximately 42,800 square feet with an addition of approximately 10,000 square feet. The 52,800 square foot facility will include a planned 20,000 square foot cleanroom. Cantrell employed over 175 workers prior to recent layoffs and planned to add another 150 to its payrolls for the expansion.

In a recent speech to Directors of Pharmacy at a national hospital conference in Chicago Dr. McCarley said: “I started my career as a retail pharmacist, and I’m keenly aware that behind every batch, every order, every syringe is a patient with a name: someone’s spouse, father, mother, brother sister, friend or relative. The drugs we make help save lives, and for that I’m humbled and grateful to have the opportunity to be of service to our customers and to their patients. To you, our customers, and to our vendors and suppliers, thank you for your understanding. Thank you for your patience. And most of all, thank you for your continued business.”

Cantrell Drug Company (CDC) is a specialty pharmaceutical company providing customized medications and compounding services to hospital pharmacies in all fifty states. CDC is registered with the FDA as an Outsourcing Facility under Section 503B of the Federal Food, Drug, and Cosmetic Act passed by Congress in 2013. The Company specializes in sterile product compounding of intravenous (IV) medications and drug shortage injections for hospitals, and to a lesser extent, for surgery centers and physician groups. For more information go to https://cantrelldrug.com/

View source version on businesswire.com: http://www.businesswire.com/news/home/20171107006652/en/

Cantrell Drug Company
Steve Weintz, 843-822-7664
Vice President
sweintz@cantrelldrug.com

Source: Cantrell Drug Company