Daniel Movens has resigned as CEO of Detroit-based Caraco Pharmaceutical Laboratories Ltd. (NYSE Amex: CPD), several weeks after the Food and Drug Administration seized tainted drugs and ingredients and two class-action lawsuits were filed against the generic drug maker and Movens.
Caraco also announced a first quarter 2010 net pre-tax loss of $14.4 million compared with net income of $14.6 million for the same period in 2009. Net sales were also down to $48.1 million for the first quarter, which ended June 30, compared with $108.3 million during the same period in 2009.
“The net pre-tax loss was primarily due to the creation of an inventory reserve relating to the inventory seized by the FDA, as well as lower sales,” Caraco said.
The total value of the seized drugs was $22.9 million, Caraco said.
Jitendra Doshi has been appointed as interim CEO and director. Doshi, who also had been Caraco’s interim CEO from 2003 to 2005, had been executive director of Mumbai, India-based Sun Pharmaceutical Industries Inc., a subsidiary of Sun Pharmaceuticals, which owns 72 percent of Caraco.
Movens will stay on to assist Caraco during the transition, the company said.
In a statement, Movens said of the first quarter losses and the quality problems identified by the FDA:
“The company believes that corrective actions have been made and continual improvements are in process. We are working with consultants to further define and correct any remaining deficiencies,” Movens said.
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