From: "Myrl Jeffcoat" myrlj@jps.net

SAN FRANCISCO, Dec. 27 — U.S. government regulators have ordered biotech giant Genentech Inc(NYSE:DNA) to boost quality control at its South San Francisco manufacturing plant, after inspectors found contaminated batches of drugs for cystic fibrosis, breast cancer and strokes.

Genentech could face fines or a suspension of its license unless it improves quality control the U.S. Food and Drug Administration (FDA) said in a warning letter. The drugs involved are Pulmozyme for cystic fibrosis, Herceptin for breast cancer and Activase for strokes.

"You should take prompt action to correct these deviations," said the letter made public on the FDA Web site late Tuesday. "Failure to promptly correct these deviations may result in regulatory action without further notice." Marie Kennedy, a Genentech spokeswoman, said all three drugs remained safe and that the company was taking steps to address FDA concerns.

"We take this extremely seriously," Kennedy said Wednesday. "But what is most important is that all products shipped have met product and safety standards."

The FDA inspected Genentech's plant in August and sent the warning letter after regulators remained dissatisfied with steps the biotechnology company had taken to fix the manufacturing problems.

According to Genentech officials, the Pulmozyme became contaminated with particles of cellulose and stainless steel during the manufacturing process. The firm refiltered the drug to remove the impurities and shipped it out, Kennedy said.

But the FDA warning letter said federal regulators had not approved that refiltering process, and criticized Genentech for not doing more to investigate how the cellulose got into the drug,

As a precaution, Genentech voluntarily recalled 200,000 doses of Pulmozyme in October, Kennedy said. This was done even though the firm did not believe it was unsafe, she added.

The FDA also criticized the company for using a similar unapproved filtering process for batches of the drug Activase.

In the case of Herceptin, the FDA said a sealing gasket on a pressurized drying device malfunctioned, exposing some of the drug to abnormal conditions. The FDA said Genentech did not do enough to prove this did not harm the batch of medicine.

Genentech shares were up $2-13/16 to close at $83-3/4 on the New York Stock Exchange.