Mumbai: India’s largest drug maker Sun Pharmaceutical Industries Ltd on Tuesday said the US Food and Drug Administration (FDA) has decided to lift an import alert 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. 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 a stock exchange filing.
The Mohali plant came into the Sun Pharma fold when it acquired Ranbaxy Laboratories Ltd in 2015.
Shares of Sun Pharma jumped at the announcement, closing 3.4% higher at Rs707 on the BSE, while benchmark Sensex index closed up 1.6% at 29421.82 points.
The US drug regulator will also remove the facility from the status of Official Action Indicated (OAI), Sun Pharma said.
According to details on US FDA’s website, 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 Voluntary 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 commoditized by now, hence we do not expect any earnings surprises,” Vishal Manchanda, research analyst at Nirmal Bang Securities, said.
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 by the US FDA 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.