MUMBAI : Sun Pharmaceutical’s troubles with the US drug regulator will continue, as details of the recent observations revealed that the resolution of issues at its Halol manufacturing plant might take longer than expected.
Shares of Sun Pharma fell by 3 per cent on Tuesday’s trading session as analysts raised doubts about the plant getting clearance in FY19.
The company received the Form 483 warning letter from the US Food and Drug Administration after it came for reinspection in February this year.
The USFDA noted that Sun Pharma was “deficient regarding operations related to aseptic processing of drugs, its procedures for cleaning and maintenance failed to include sufficient detail of the methods of disassembling and reassembling equipment and there are lack of procedures to describe sampling, testing and approval and rejection of drug product containers”.
Although the USFDA did not find any data integrity violations, analysts said that one of the observations will require the company to redesign civil work inside the plant.
“We believe the observation will require minimum 3-6 months to redesign the filing lines (approved by FDA) followed by civil works, which could facilitate efficient aseptic practices including process of cleaning vials and lack of possibility for air-flow contamination,” said Surjit Pal, analyst with Prabhudas Lilladher. He added that the whole process may lead to shut down (at least partially) of filing lines of the current production of injectable and impact revenues of US exports of injectable products.
In an email to ET, Sun Pharma shared the response that it had sent to stock exchanges when it received the Form 483 warning letter after the regulator conducted inspections between February 10-23. “At the conclusion of the inspection, the agency issued a Form 483, with three observations. The company is preparing the response to the observations, which will be submitted to the US FDA within 15 business days. The company is committed to addressing these observations promptly,” the company statement said.
Dilip Shanghvi, Sun Pharma’s founder and MD last month at the annual Quality Forum Event said that the company wanted to reach quality and safety level similar to an auto and aviation industry. Shanghvi was candid to admit that his company was still in the process of achieving that level of quality compliance.
Prabhudas Lilladher downgraded the stock and retained its target price to Rs 447 and said the booster in earnings from US in short- to medium term will depend on how fast Sun will achieve the resolution of Halol.