The stock of Alkem Laboratories dipped around 4 per cent in trade today on the back of a notice sent by the Federal Institute of Drug and Medical Devices, Germany, to the European Medicines Agency (EMA). The company in a release to the stock exchanges said the inspection which took place in March 2015 jointly by the Federal Institute of Drug and Medical Devices (BfArM), Germany, and the Health Care Inspectorate (IGZ), Ministry of Health of the Netherlands, resulted in certain adverse observations. The facility in question is located at Taloja, Mumbai.
According to Alkem Laboratories, the observations are regarding the bioequivalence studies conducted for the period between March 2013 and March 2015 and in particular to bioequivalence trials of two products, of which one is commercialised and another is yet to be commercialised. Sales from Europe contributed less than 1 per cent to Alkem’s total consolidated sales for the nine-month period ended December 2015.
The company also said it would be submitting suitable clarifications to EMA within the stipulated time lines.
Earlier in March, for the same facility, the company had received a letter with eight observations from the UK regulator United Kingdom – The Medicines and Healthcare Products Regulatory Agency (UK-MHRA).
In December 2015, Alkem raised about Rs 1,350 crore at an issue price of Rs 1,050 per share, which was over-subscribed around 44 times.
Alkem Labs reported strong consolidated results for the nine months ending December 2015. The top line grew 33 per cent year-on-year, with total sales coming in at Rs 3,949 crore. International revenue accounted for around 27 per cent of total revenue. During the same period, net profit came in at Rs 616 crore, up 137 per cent.
The company has 16 manufacturing facilities — 14 in India and two in the US. Five of its facilities are US FDA, TGA and UK MHRA approved.
Almost all the drug majors – Sun Pharma, Dr Reddy’s, Lupin, CIPLA, and IPCA Labs have faced the heat of US FDA during its inspections. A few others such as GVK Biosciences and Quest Life Sciences fell foul of European authorities. In July 2015, the European Union banned 700 drugs tested by GVK Biosciences after which the Centre suspended the EU Free Trade Agreement (EU FTA) talks that were to resume in August 2015 after a two-year break.