Chemeq facility gets conditional approval, but delays continue

Chemeq (ASX: CMQ) has received a conditional GMP licence for its new manufacturing facility from the Australian Pesticides and Veterinary Medicines Authority (APVMA).

An unconditional approval will follow provided the company passes an audit by the APVMA under commercial production conditions, and makes some minor changes to procedures requested by the regulatory agency.

The approval means that the company can commence commercial scale production of validation batches, which if approved by the APVMA, can be used to fill Chemeq's AUD$1.5 million order for South Africa.

But the planned ramp-up of the facility to full name-plate capacity has been delayed due to problems in scaling up one of the filtration steps. The delay is likely to extend past December 2004, and the company has engaged the services of an independent engineering group to assess the process. Production at less than name-plate capacity is continuing.

The APVMA has also indicated to Chemeq that it will require further testing prior to product approval for use of its polymeric antimicrobial in pigs. The additional testing is likely to delay approval of the product beyond the expected date of June 2005 by as much as six months.