Sun Pharmaceutical Industries Ltd’s supply of drugs from its Gujarat factory could be denied entry to its key US market after the drug regulator placed an import warning on the facility, the drugmaker said on Thursday. The Food and Drug Administration’s (FDA) notice on imports is effectively a ban, meaning any future shipments of products made at the Halol plant in Gujarat could be refused until the facility is brought into compliance with the regulator’s current GMP standards.
Shares of Sun Pharma fell 3.9% in the steepest intraday decline since late May and were the top losers on the blue-chip Nifty 50 index. “The company continues to cooperate with the US FDA and will take all necessary steps to resolve these issues and to ensure that the regulator is fully satisfied with the company’s corrective action,” Sun Pharma said. The FDA has excluded 14 products from the import warning under certain conditions.
It was not immediately clear what the conditions are and what corrective actions the FDA has asked the company to take. “Removing import alerts is very difficult and several companies are still not able to bring their facilities back into compliance after 7-10 years,” said Shrikant Akolkar of Asian Markets Securities after Sun Pharma cut its revenue and revenue outlook and cut its targets price up 4.5% to Rs 1,156.
The focus will now shift to the Sun Mohali facility, Akolkar added. The plant was classified as “official action indicated” following a November inspection, meaning regulatory or administrative action will be recommended. The Halol plant received the same inspection classification in August after the FDA conducted 10 observations. Halol’s US market shipments, including 14 excluded products, contributed approximately 3% to Sun Pharma’s consolidated revenue in the year ending March 2022 per company.
