Cadila's US business hopes soar on Moraiya plant approval

The US market contributes around 40% to the company's revenues

Cadila Healthcare has received US Food and Drugs Administration approval for an antibacterial injection from its Moraiya plant, indicating an end to its regulatory problems.

With no regulatory overhang, the drug maker expects approvals to 40 products, including some high-value speciality drugs in the US in FY18. The US market contributes around 40 per cent to the company's revenue. The Moraiya plant, which contributes around 60 per cent to its US sales, was served a warning letter in December 2015 which delayed product approvals and cut earnings estimates.  

The company successfully cleared an FDA audit in February with zero adverse observations which paved the way for product approvals from the plant. On Friday, Cadila Healthcare announced that it had received approval for its Levofloxacin, an injection used to treat bacterial infections. 

“This is significant, as it marks the beginning of the approval process for filings made from the Moraiya manufacturing plant after successfully completing the USFDA audit, with Zero 483 observations,” the company said in a statement.

The Cadila Healthcare stock on Friday gained 5 per cent to close at Rs 494.55 after the positive development.

The approval for a product from Moraiya plant in effect means that the warning letter for this unit has been cleared by the US FDA, though the company has not received a formal communication from the regulator regarding any withdrawal of the letter.

In an investor note in January, Deepak Malik of Edelweiss Securities had said Cadila Healthcare aimed to double its US business ($ 614 million at present) over the next three years by launching 100 new products.

“The company anticipates bunched-up approvals in the near future, including approvals for key products like Asacol HD, Prevacid ODT and Toprol-XL. The transdermal portfolio is expected to start contributing in the calendar year 2017. The company aims to start clinical work for the US biosimilar market. It is also developing complex injectables,” Malik said in his note.