The 7 Worst Drug Companies of 2010

This year was a cracker for pharmaceutical management incompetence. Investigations? Recalls? Management churn? Making pills the wrong size? Not making pills at all? These Christmas turkeys are all that and a bag of test tubes. In ascending order of incompetence, BNET presents the seven worst drug companies of 2010. Remember, it's an honor just to be nominated. Drumroll, please --

7. Mannkind (MNKD)

The FDA was set to vote on Dec. 29 on an approval for its inhaled insulin product Afrezza when -- just at the wrong moment -- it was sued by its former chief regulatory affairs officer alleging "unlawful" clinical trial data practices. D'oh! The company has been sued before by a former vp of medical/regulatory affairs alleging something similar and the company failed again, in a years-long search, to find a a Big Pharma marketing partner on the drug. If the FDA says yes on Dec. 29, we'll all owe Mannkind an apology.

6. Elan (ELN)

Elan began the year with every reason to believe that it was on the upswing: It had just closed a $1.4 billion deal with Johnson & Johnson for its Alzheimer's drugs. Then it emerged that the deal contained an undisclosed poison pill, one of many that the company has ingested in order to insulate itself from the hostile takeovers.

Its management were exposed as being riddled with conflicts of interest. It ended the year by giving back every penny it had ever made on its seizure drug Zonegran, due to illegal marketing. The company was No.4 on last year's chart.
5. Generex (GNBT)

Generex really blotted its copybook this year by suing TheStreet.com biotech reporter Adam Feuerstein for defamation. This only drew attention to Feuerstein's articles about the company, which he alleged was "a 15 year-long stock promotion scheme." Generex claims its Oral-lyn oral insulin spray is approved in Ecuador, India, Lebanon and Algeria, but the company doesn't book those revenues. Not to worry, it does sell Baboom! "energy spray" with the tagline "Let's get this party started," and it's funded by South American gold mine investors.

4. AVI BioPharma (AVII)

Chronically unprofitable AVI has had three -- count 'em! -- CEOs this year. In chronological order: Leslie Hudson, J. David Boyle II, and Chris Garabedian. The turmoil followed a shareholder revolt that forced the ouster of Hudson. Investors have much to revolt over. As Xconomy described it:

AVI ... is one of the oldest companies in biotech, having sputtered around since 1980 without ever developing an FDA-approved drug, burning through more than $250 million in investor cash at last count, and never becoming profitable.

Executive musical chairs aside, the company saw an antidepressant and a cholesterol drug recalled in Europe. The company remains under an FDA ban of 30 of its products following a faked data scandal.

2. KV Pharmaceutical (KVa.N)

KV Pharma began the year by announcing it would pay $27.6 million in fines after pleading guilty to criminal charges for not disclosing in 2008 that its was making its generic pills too big. The company then said it couldn't pay its fines on time.

The company expected to resume shipping normal size pills in Q4 2010, but that didn't happen. Instead, it took on a $120 million loan at a whopping 16.5 percent interest.

1. Johnson & Johnson (JNJ)

It's tough to screw up a drug as basic as Tylenol, a brand that famously survived a cyanide saboteur 30 years ago. But CEO William Weldon managed it. With 11 recalls of the painkiller and other non-prescription drugs, Weldon's team has inflicted more damage on Tylenol and the McNeil Consumer Healthcare unit that makes it than the Chicago murders of 1982 ever did, despite allegedly being warned of problems at the factory in 2007. (Remember Tylenol was back on the market within a year of the cyanide crisis.)

Currently, J&J is in such disarray it can't even make tampons properly.

Related:

• The 5 Worst Drug Companies of 2009