FDA's Surprise Visit To Sun Pharmaceutical Industries Ltd's Pressures Stock
Published: Sep 12, 2014
September 12, 2014
By Jessica Wilson, BioSpace.com Breaking News Staff
Share prices of Mumbai-based Sun Pharmaceutical Industries continued to drop Friday in the wake of reports that the U.S. Food and Drug Administration (FDA) performed a surprise inspection of Sun Pharma’s Halol manufacturing plant in Western India.
The inspection began on Monday and is ongoing. If it finds infractions, market players have speculated Sun can expect to see further pressure on its share price.
The Halol plant contributes to approximately 40 percent of Sun Pharma’s U.S. sales. According to Sarabjit Kour Nangra, vice president of research for Pharma at the Indian stock-broker and wealth management firm Angel Broking.
During the fiscal year of 2014, American business accounted for more than 60 percent of overall sales of Sun Pharma. This makes the Halol plant’s fate crucial to San Pharma’s bottom line. The FDA last inspected the plant in September 2012.
CNBC reported that that the FDA sent two teams, which are auditing manufacturing and quality control departments, both for injectibles and oral solids unit.
“The team of five inspectors that are auditing the Halol facility has a few senior names, who specialize in injectible manufacturing, data integrity and quality control,” the news services said. “Based on the initial indications, sources suggest that the USFDA inspectors may extend the audit at Halol facility further beyond today. However, this will be confirmed only by evening once the day's audit is wrapped up."
Though the company has not issued a press release, CNBC reporter that it has released a statement to stock exchanges that said facilities undergo routine inspections and there has been “no material impact from USFDA inspections.”
Sun Pharma recently recalled several medications from the US market: 40,000 bottles of Venlafaxine Hydrochloride extended-release tablets, shipments of Gemcitabine, and packages of Metformin. Though the recall covered only small batches of each medication, all three products are manufactured in the Halol plant.
Sun Pharma’s other manufacturing facility located in the state of Gujarat, specifically Karkhadi, was the focus of an FDA citation in May 2014. During a visit to that facility, the FDA identified several violations and in the letter addressed the Karkhadi plant, asked that Sun Pharma extend its “internal review to any other facilities determined to be involved in, or affected by, inaccurate data reporting.”
Sun Pharma announced in April 2014 that it would purchase fellow Indian pharmaceutical company Ranbaxy Laboratories for $4 billion. All four of Ranbaxy’s plants are currently in danger of being banned from the U.S. market for regulatory infractions.