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Wockhardt's US plant under FDA glare

Wednesday, 28 May 2014 - 7:15am IST | Place: Mumbai | Agency: dna

Regulator raises concerns over manufacturing practices at Chicago unit

In a sign of more regulatory trouble for Wockhardt, the United States Food and Drug Administration (FDA) has raised concerns over manufacturing practices at a US unit of the pharma company.

Murtaza Khorakiwala, managing director, Wockhardt told analysts in an earnings call that FDA after an inspection in March has issued 'Form 483' for the company's Chicago-based Morton Grove Pharmaceuticals unit. The plant accounts for over 50% of Wockhardt's sales in the US market.

In a "Form 483", the FDA typically outlines unsatisfactory results of manufacturing facilities made by its inspectors on compliance with the current good manufacturing practices (cGMP).

Already, the company's three manufacturing units in India, Waluj and Chikalthana in Maharashtra and Kadaiya in Daman, have come under the scrutiny of the foreign regulators for lapses in manufacturing process.

"It is difficult to say what position FDA will take (on the US plant), but we think the observations made are not negative," said Khorakiwala.

Sometimes a major observation is a result of a number of minor observations clubbed together, he said.

The company has replied to the letter but is yet to hear from the agency.

Wockhardt's US business, which contributed for 35% of the global revenues, witnessed a decline of 56% in rupee terms at Rs 367 crore during the January-March quarter.

Khorakiwala said that remedial steps have been taken to address quality-related issues, including hiring consultants and training the workforce.

"We have no understanding on how the regulatory agency would view it (the remedial measures) and what kind of a position they are taking. Obviously, there is no end to perfection, and I think we have made significant progress in the process," he said.

On the readiness of the plants to undergo regulatory inspections, Khorakiwala said while the company's three units, such as Chikalthana, Shendra and Daman are ready for inspections, its Waluj unit will take at least 3-6 months.

While the FDA has banned exports from Waluj and Chikalthana, the UK Medicines and Healthcare products Regulatory Agency has given "restricted GMP" certificate that enables export of few products from these units.

The company has initiated the process of moving its production from Waluj and Chikalthana plants to other sites. It also plans to complete all product filings, around 15-20 products, by the first half of the current fiscal. This would include pending products from Waluj and Chikalthana facilities as well.

Shares of the company closed at Rs 668.80 apiece on the BSE, down 4.45% from the previous close. The shares plunged as much as 8.3% in trade on Tuesday at Rs 641 after the company reported a 77% drop in its consolidated net quarterly profit on Monday.

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