Ipca Labs receives warning letter for three plants

Ipca Laboratories has received warning letters from the US Food and Drugs Administration (USFDA) for its three manufacturing units in Madhya Pradesh and Silvassa.

The warning letter indicates a continuation of regulatory problems for the company and is a setback to the quick revival of its US business and follows import alert against its plants.

Ipca Laboratories earns about 10% of its revenue from US market (Rs 304 crore in FY 15) and its plants at Ratlam, Indore and Silvassa have import alerts against them. The Ratlam facility is used to manufacture active pharmaceutical ingredients (API) while units in Indore and Silvassa manufacture formulations.

The alerts were issued following FDA inspections in 2014 and 2015. The company said now warning letters has been issued for violation of good manufacturing practices at these plants.

In a notification to the stock exchange today, Ipca Laboratories said it had voluntarily suspended shipments of its drugs and active pharmaceutical ingredients to the US till FDA observations are resolved. The company added that it has not shipped any drugs or APIs to the US since July 2014 except the products which are exempt from import alert.

Overseas business which contributes over 55% of revenue has declined in FY 2015 and first half of current fiscal owing to regulatory challenges. Angel Broking however expects a revival in exports in FY 16 and 17.

"The company has responded to the US FDA inspection observations with its remediation measures and has been since working also with external consultants to ensure that its remedial activities are undertaken in a proper and timely manner. The company is fully committed in resolving this issue at the earliest. The company is also committed to its philosophy of highest quality in manufacturing, operations, systems integrity and cGMP (current good manufacturing practice) culture," IPCA Laboratories said in its notification.