Ipca Labs halts ship­ments to US af­ter FDA con­cerns

The Political and Business Daily - - CORPORATE -

IPCA Lab­o­ra­to­ries Ltd said on Thurs­day it has vol­un­tar­ily sus­pended ship­ments to the United States from one of its drug in­gre­di­ent man­u­fac­tur­ing plants af­ter the US Food and Drug Ad­min­is­tra­tion (FDA) ex­pressed con­cerns re­gard­ing the unit.

Ipca, a mid-sized generic drugs and in­gre­di­ents maker, said the FDA is­sued a so-called "Form 483", a let­ter in which the agency typ­i­cally out­lines vi­o­la­tions of its guide­lines ob­served dur­ing in­spec­tions of man­u­fac­tur­ing plants. Ipca did not give de­tails about the con­tents of the Form 483 that it had re­ceived.

Over the past year, large In­dian drug­mak­ers such as Ran­baxy Lab­o­ra­to­ries Ltd and Wock­hardt Ltd have been hit by a spate of reg­u­la­tory sanc­tions due to con­cerns about pro­duc­tion pro­cesses at their lo­cal plants.

The ship­ment halt from Ipca's Rat­lam plant in Mad­hya Pradesh will also im­pact its US drug ex­ports from its Sil­vassa and In­dore plants in the coun­try, where it makes drugs us­ing in­gre­di­ents from the Rat­lam plant, Ipca said in a state­ment.

Un­der the FDA rules, drug­mak­ers get a chance to re­spond to the ob­ser­va­tions made in a Form 483. If the reg­u­la­tor is not sat­is­fied with the re­sponse it can im­pose a ban on im­ports from the plant. Ipca did not say in the state­ment if it had had con­tact with the FDA since the Form 483 was is­sued.

The com­pany said it is "fully com­mit­ted in re­solv­ing this is­sue at the ear­li­est," and will re­sume ship­ments only af­ter it has ad­dressed all FDA con­cerns.

The halt could im­pact Ipca's rev­enue by up to 10%, de­pend­ing on how long the com­pany takes to re­solve the is­sue, some bro­ker­age an­a­lysts said.

Ipca ex­ports to var­i­ous global mar­kets in­clud­ing the United States, Canada, Europe and Aus­tralia. Ex­ports made up about 63% of the com­pany's sales in the fi­nan­cial year ended on March 31, ac­cord­ing to in­for­ma­tion on its web­site.

Shares of Ipca, which has a mar­ket cap­i­tal­i­sa­tion of about $1.8 bil­lion, fell as much as 10 per cent af­ter the an­nounce­ment. They were trad­ing down 10.7 per cent at Rs 748 as of 1:55 pm, while the Nifty in­dex was down 0.08 per cent.

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