US FDA lifts import alert on Sun Pharma’s Mohali plant
India’s largest drug maker Sun Pharmaceutical Industries Ltd said on Tuesday the US Food and Drug Administration (FDA) has decided to lift an import alert imposed on its manufacturing plant at Mohali in Punjab.
The US FDA had imposed the import alert in 2013 for violation of good manufacturing practices.
“This proposed action (by US FDA) will clear the path for Sun Pharma to supply approved products from the Mohali facility to the US market, subject to normal US FDA regulatory requirements,” the company said in a stock exchange filing.
“It illustrates Sun Pharma’s commitment to work closely with the US FDA and strive for 100% CGMP (current good manufacturing practices) compliance at its manufacturing facilities,” the company said in the filing.
The Mohali plant came into the Sun Pharma fold when it acquired Ranbaxy Laboratories Ltd in 2015. The US FDA had taken action against the facility in 2013 when it ordered the plant to be fully subject to Ranbaxy’s Consent Decree of Permanent Injunction.
Shares of Sun Pharma jumped at the announcement, closing 3.61% higher at ₹708.25 on the BSE, while the benchmark Sensex closed up 1.71% at 29,442.63 points.
The drug regulator will also remove the facility from the status of Official Action Indicated (OAI), Sun Pharma said.
According to the US FDA’s website said an OAI status is given to a plant when regulatory or administrative sanctions are indicated for the objectionable conditions observed at the facility.
If the violations do not justify further regulatory action, then a plant is given status of Volun- tary Action Indicated (VAI).
“This is clearly a positive development but not significant. It will allow Sun Pharma to launch products manufactured at Mohali for which the company has US approval. I think most of these product opportunities would have been commoditised by now, hence we do not expect any earnings surprises,” said Vishal Manchanda, research analyst at Nirmal Bang Securities.
Ranbaxy’s units at Dewas in Madhya Pradesh, Paonta Sahib in Himachal Pradesh and Toansa in Punjab are also under US FDA’s import alert. Sun Pharma’s plant at Halol in Gujarat was also issued a warning letter in December 2015.
“Mohali facility clearance will help Sun Pharma to expand capacity, de-risk future filings and realise manufacturing synergies from Ranbaxy acquisition. It is a sentimental positive and could imply faster than anticipated re-inspection or clearance of Halol facility. However, we don’t see a material upgrade to earnings estimates,” said an analyst, who did not wish to be named, citing company policy.
SHARES OF SUN PHARMACEUTICAL INDUSTRIES JUMPED AFTER THE FDA ANNOUNCEMENT, CLOSING 3.61% HIGHER AT ₹708.25 ON THE BSE