FDA scolds Cepheid for manufacturing issues in Sweden

Cepheid's Xpert Norovirus test--Courtesy of Cepheid

The FDA slapped Cepheid with a warning letter for violations at its European R&D and manufacturing site in Sweden, chastising the company for the way it went about producing its Xpert Norovirus diagnostic.

In a letter published this week, regulators came down on Cepheid for issues cited at a March inspection of its Solna, Sweden, facility. The visit revealed that the company's Xpert Norovirus tools were "adulterated" and that manufacturing protocol for the devices are "not in conformity with the current good manufacturing practice requirements" laid out by the FDA, the agency said in its letter.

Cepheid responded to the FDA's observations in April, but the agency found its actions inadequate. According to the FDA letter, the company "did not provide documentation or evidence of the implantation of corrective actions" and failed to produce a retrospective review of design changes for its Xpert Norovirus products. Cepheid also did not provide evidence that it talked to suppliers and consultants about the changes, the agency said in its note.

The FDA is giving the company fifteen business days to respond to the letter, asking Cepheid to explain how it will correct the problems and prevent them from happening again. But the issue could have further-reaching implications for Cepheid. As the agency said in its letter, "U.S. federal agencies may be advised of the issuance of Warning Letters about devices so that they may take this information into account when considering the award of contracts." And premarket approval applications for Class III devices that are "reasonably related" to the issue at hand "will not be approved until the violations have been corrected."

The news casts a dark cloud over Cepheid, even as the company rides high off the past year's successes. In November, Cepheid roped in $3.3 million in funding for its rapid Ebola test. In December, the company won FDA approval for its Xpert Norovirus diagnostic, which runs on its GeneXpert System and can distinguish between GI and GII norovirus genogroups in as little as one hour.

Cepheid's hard work appears to have paid off, with $470 million in 2014 sales--a 17% jump over the previous year. The company is shooting to increase those numbers, targeting 20% or more sales growth in 2015 as it continues "to invest strategically and aggressively in further test menu expansion, geographic expansion, and market segment expansion," CEO John Bishop said in Cepheid's Q4 earnings statement.

- here's the FDA warning letter