Sun Pharma Shares Fall On Surprise Inspection By USFDA

The US Food and Drug Administration (USFDA) conducted a surprise inspection at Sun Pharma’s manufacturing facility iHalol (Gujarat). It is learnt that the move may have been triggered by a number of recent recalls from the plant. In May, Sun Pharma's another manufacturing facility in Karkhadi, also in Gujarat, had received a warning letter from the US FDA after investigators identified violations of current good manufacturing practice and regulations for finished pharmaceuticals. The American regulator, in its warning letter to Sun Pharma's Karkhadi plant, had also asked the company to expand its internal review to any other facilities determined to be involved in, or affected by, inaccurate data reporting. 

Of late, Sun Pharma recalled three important medicines from the US market. It recalled 40,000 bottles of Venlafaxine Hydrochloride extended-release tablets after it failed dissolution test. The company also recalled Gemcitabine for manufacturing issue (lack of sterility assurance) and Metformin for packaging problems (Gabapentin tabs found in Metformin bottles).While all recalls were limited to specific batches, all three products are manufactured at Halol.

Halol plant, one of the major facilities of Sun Pharma supplying to the US market, was last inspected in September 2012. It is learnt that this plant contributes to around 40% of US sales and around 25% of consolidated profit of the company. 

Results of the ongoing inspection at Sun Pharma's Halol plant would be significant given its importance to the companies US revenues as well as for its overall performance going forward. The shares of the company are currently trading at Rs 825, down by 4.03%.