FDA Slaps Warning Letters on Two Lupin Plants

Legal

The U.S. Food and Drug Administration (FDA) issued warning letters to India-based Lupin Ltd., for two of its manufacturing facilities in Goa and Pithampur, Indore.

On April 7, the FDA cited three Form-483 observations for the plant in Goa and on May 18, cited six for the Indore location. The FDA issues Form 483 when it concludes an inspection when an investigator observed conditions that he or she feels may constitute violations of the Food Drug and Cosmetic (FD&C) Act and related Acts. The Form 483 is not intended to be all-inclusive and doesn’t include questionable or unknown things observed at the time of the inspection.

In a filing to the Bombay Stock Exchange (BSE), Lupin stated, “The company has received a warning letter issued by the United States Food and Drug Administration (USFDA) on November 6, 2017 for our formulation manufacturing facilities at Goa and Indore (Pithampur Unit II).”

The Economic Times of India went on to say, “The company is deeply disappointed to have received this outcome, it said, adding that while there will be no disruption of product supplies from either of these locations, there is likely to be a delay of new product approvals.”

Lupin didn’t indicate the specifics of the Form-483s. It did say, “We plan to address the concerns raised by the USFDA expeditiously and will work with the USFDA to resolve these issues at the earliest.”

Company stock dropped as much as 17.9 percent at the news. The two factories contribute more than 50 percent of the company’s U.S. sales and about 20 percent of its total sales. Amey Chalke, an analyst at HDFC Securities, told Bloomberg Quint, “The warning letter will mean future approvals will be halted. It will be difficult for Lupin to offset the slowdown in Glumetza and Fortamet with this move.”

This was echoed by Surajit Pal, an analyst with Prabhudas Lilladher, who told Bloomberg Quint, “Don’t see an immediate impact on earnings as existing products can be sold. Issue will be with pipeline that will now get affected.”

The brokerage firm Edelweiss Securities wrote in a note, “The Goa facility is the most important facility with the highest pending approvals. This is a big negative for the company…. The warning letter will not only delay new approvals, thus impacting U.S. revenues, but also increase remediation cost that will put pressure on margins. We will revisit our earnings estimate.”

Most recently, on Nov. 2, Lupin announced it had launched Doxycycline Hyclate Tablets USP, 75 mg and 150 mg after receiving approval from the FDA. They are a generic version of Aqua Pharmaceuticals’ Acticlate Tablets for the treatment of infections caused by various bacteria and as an adjunctive therapy in severe acne.

Lupin reports about $2.55 billion (US) in annual revenues and is one of the largest generic pharmaceutical company globally by market cap. 

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