Drug-maker Sun Pharmaceutical Industries has received an import alert from the US Food and Drug Administration on its cephalosporin facility located at Karkhadi, Gujarat.
While an import alert virtually bans all products from the plant, the company said it had initiated corrective steps and the contribution from this plant to its consolidated revenues was “negligible”.
The alert was issued by the US FDA as a follow up to the last inspection of the facility, during which some non-compliance of current Good Manufacturing Practice (cGMP) regulations was identified, Sun said. Its stock-price dipped on the news by over 5 per cent, closing at ₹573 on the BSE, on Thursday.
Even as Sun expects the FDA alert to have minimal impact, reflected in the fact that it has not revised its earlier sales growth projection of 29 per cent for the year ending March 2014 — the development is the latest in a string of US FDA-initiated action against India-based companies.
Ranbaxy and Wockhardt, for instance, have been reeling from the impact of import bans on products from some of its plants.
Nevertheless, US FDA chief Margaret Hamburg, wrapping up her recent maiden visit to India, had clarified that Indian companies were not being targeted, and were merely being put through routine regulatory scrutiny required to keep products safe for American consumers.
Details on Sun’s cGMP transgressions are not known. However, the earlier Ranbaxy and Wockhardt instances of cGMP violations opened up a can on worms, revealing data integrity and basic hygiene issues, ranging from too many flies in the room to tablets with human hair to urine spilling out of the drainage.
Revenue impact Analysts tracking the sector, though, expect the latest development on Sun not to have a major financial impact. Centrum Broking Senior Vice-President Ranjit Kapadia said the financial impact of the import alert is being estimated at less than one per cent of its revenues.
Angel Broking’s VP-Research, Sarabjit Kour Nangra, pointed out that Sun had a diversified manufacturing infrastructure to cater to the US markets, which contributed around 54 per cent of its sales (in FY 2013).
Sun manufactures active pharmaceutical ingredients and finished medicines at Karkhadi. But it had 12 US FDA-approved facilities, with six in the US, three in India and one in Canada, Israel and Hungary, respectively, as on March 2013, Nangra said.
Besides its subsidiaries, Taro and Caraco also contribute a major chunk of its sales, she added.