Following the alert, the Wockhardt stock tanked 20 per cent on BSE, closing at Rs 1,315.25, down 20 per cent; it was locked in lower circuit.
Habil Khorakiwala, chairman, Wockhardt, said the company was expecting a loss of up to $100 million in annualised revenue, owing to the import alert. He added the company should be able to restore most of that within six to nine months by shifting production. “We plan to move 80 per cent of production of the injectables from the Waluj plant to a nearby facility,” he said.
An import alert results in detention without physical examination of drugs from firms that have not met what US FDA terms good manufacturing practices. In April, the company had said US FDA had inspected its export-oriented injectables unit in Aurangabad. The regulator had issued form 483s, issued when FDA inspectors believe production norms have been violated at a facility.
This is the first setback to the Mumbai-based company since it exited a corporate debt restructuring programme in 2009, when its debt touched Rs 3,800 crore. In 2009, the company had defaulted on $110 million of foreign currency convertible bond payments.
A combined 1.16 million shares of the company have been traded over the counter, against an average of about 3,00,000 shares traded daily in the past two weeks on BSE and the National Stock Exchange.
Wockhardt’s market capitalisation has fallen to Rs 14,413 crore, a fall of 32 per cent compared with Rs 21,979 in March this year, the company’s highest market capitalisation. In 2012-13, the company posted 235 per cent growth in market capitalisation. In March 2012, market capitalisation stood at Rs 6,563 crore.
In 2010, CP Pharmaceuticals, the UK arm of Wockhardt, had received a cautionary letter from US FDA for failing to meet the required standards at a manufacturing facility in Wrexham.