US bans import of drugs from Sun Pharma’s Vadodara unit

The import alert is for deviations of a serious nature from good manufacturing practices; However, lndia’s biggest drug firm by market-cap says the ban would have ‘negligible’ impact on its revenues

US bans import of drugs from Sun Pharma’s Vadodara unit

MUMBAI : The US Food and Drug Administration has imposed an import alert on Sun Pharmaceutical Industries Ltd’s manufacturing unit at Karkhadi, near Vadodara in Gujarat, for violation of good manufacturing practices norms, according to a notice on the regulator’s website.

The alert means that Sun Pharma cannot sell any product made at the unit in the US. The company makes both formulations and active pharmaceutical ingredients at the unit.

The import alert is listed as “Import Alert 66-40”, which is for deviations of a serious nature from good manufacturing practices and authorises the FDA to seize products from such facilities without physical examination of the drugs.

“DWPE (detention without physical examination) of such firms remains in effect until such time as FDA is satisfied that the appearance of a violation has been removed, either by re-inspection or submission of appropriate documentation to the responsible FDA Centre,” the regulator said.

Shares of Sun Pharma declined sharply following the news and ended the day at Rs 573.60, down 5.03 per cent at the BSE. During the day, the drug firm’s stock declined by 6.35 per cent to Rs 565.60.

In a statement later, the company said the contribution of the Karkhadi facility to Sun Pharma’s consolidated revenues is negligible and maintained its revenue growth guidance for 2013-14 (Apr-Mar). Sun Pharma has revised its revenue growth guidance upwards twice this year. In February, the company said it expects consolidated revenues to grow 29% in 2013-14 from 25% guided in November.

“The news will not have major impact financially, as the plants contribution to the overall sales is not significant,” Sarabjit Kaur Nangra, vice-president research at Angel Broking, said adding that the company has 12 US FDA approved facilities. Of the 12 units, six are in the US, three in India, and one in Canada, Israel and Hungry each.

“Thus, the company has well diversified manufacturing infrastructure to cater to the US markets, which contribute around 54% of its sales,” Nangra said. “Moreover, the company has successfully resolved such issues in the past.”

The company said the import alert for its cephalosporin facility at Karkhadi was issued by the FDA following an inspection of the facility, during which it identified violation of “some non-compliance of current good manufacturing practice regulations. “The company remains fully committed to compliance and has already initiated several corrective steps to address the observations made by the US FDA.” Following an import alert, companies need to take corrective steps to address all issues raised by the US FDA, following which the regulator inspects the facility again. The alert is only lifted if the US FDA is satisfied by the measures taken.

Earlier this week, Sun Pharma had voluntarily recalled 2,528 bottles of its generic version of diabetes drug Glumetza in the US on the basis of a customer complaint.

USFDA has been cracking down heavily for non-compliance of manufacturing norms and various facilities of firms like Ranbaxy and Wockhardt have already been banned from importing drugs into the US market.

While all plants of Daiichi Sankyo controlled Ranbaxy Laboratories in India have been banned from exporting drugs to the US, Wockhardt has also faced similar actions on its two plants in the country.         -Cogencis

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