Olympus (PINK:OCPNY) is shuttering a plant in Lebanon, N.H., that makes the ill-fated OP-1 bone growth putty, having failed to find a buyer for the business it acquired from Stryker (NYSE:SYK) for $60 million in 2010.
The move means layoffs for the remaining 120 workers at the plant, which will cease active operations August 29, according to reports.
In March Olympus announced plans to abandon the U.S. biotech business after failing to "gain the traction necessary to build a broader regenerative medicine portfolio," saying OP-1 would be off the market by May 30 and slashing the price on the Lebanon facility.
Yesterday a company spokesman said even that measure failed to entice any interest from acquirers, according to the West Lebanon Valley News.
"We feel we have exhausted all efforts by trying to sell the Olympus Biotech company and the Lebanon facility," spokesman Mark Miller told the newspaper. "There are no viable offers at this stage."
"This was a difficult decision and was made only after numerous alternatives for business continuation were identified and exhausted over the past year, including partnerships, acquisitions, private equity, contract manufacturing and other options," Miller wrote in an email, according to the Valley News. "None of these came to fruition."
The OP-1 putty caused a major headache for Stryker (NYSE:SYK) after off-label 4 allegations surfaced in the late 2000s. Federal investigators in Oct. 2009 indicted the company and four managers, charging that they led a 2-year campaign to promote the combined use of separate bone-healing products, each granted a narrow, provisional "humanitarian device exemption" by the FDA.
Combining the treatments and devices – the OP-1 Implant, OP-1 Putty and the bone void filler Calstrux – caused adverse effects in patients ranging from minor irritations to infections requiring follow-up surgeries. Stryker pleaded guilty to off-label marketing and paid the feds $15 million (plus another $1.4 million to Massachusetts) to settle the beef.