News whacks 20% off shares of Indian generics maker
By Eric Palmer
An FDA import ban can be costly, and India’s Wockhardt says the import alert it is now under could slice $100 million out of its revenues.
On Thursday, the Indian generics maker acknowledged the import alert for a solid dose and injectables plant in Aurangabad, Maharashtra, Reuters reports. That means none of the products from the facility can be sold in the U.S. Wockhardt Chairman Habil Khorakiwala told the Indian press service PTI that the ban could cost the company $100 million in lost sales. However, the Business Standard reported that Wockhardt would shift production to some other plants to limit the financial damage. He said the transfers could take 6 to 9 months. The news shaved 20% off the company’s shares in trading in Mumbai, its daily limit, Reuters reported.
In April, the company posted a statement on its website that the FDA had issued a Form 483 for problems it observed at the facility. Wockhardt said it had initiated an accelerated and comprehensive remedial measure and was committed to achieving full compliance in the shortest period of time.
Other drugmakers can attest to the financial impact of an FDA import alert. Ranbaxy Laboratories, which last week agreed to pay $500 million to settle one of the largest pharmaceutical enforcement actions tied to drug-manufacturing issues, still has two plants in India that it cannot use to produce drugs for the U.S. market. That means it must rely on more expensive manufacturing elsewhere. It said this week that it has spent $300 million upgrading the facilities and meeting FDA expectations.