Natco says addressing US FDA concerns

Many of the US product filings by the company come from these two facilities; scrip sheds 13%

The stock of the Hyderabad-based Natco Pharma fell 12.6 per cent on Monday after the company informed stock exchanges that two of its plants had received “observations” from the US Food and Drugs Administration (FDA).

The share price fell by Rs 59.05 to close at Rs 409.30 on the Bombay Stock Exchange even though the company termed the observations as minor. Recent instances of such FDA observations have led to Dr Reddy’s and a few other companies receiving warning letters from the agency. “The company has sent compliance reports on these observations and believes there will be no adverse impact on its pipeline products from these facilities,” Natco Pharma said in a statement. According to the company, the FDA had inspected its Chennai and Kothur facilities in February and March, respectively.

A strong oncology player with a portfolio of 26 drugs, Natco Pharma came into the limelight in April 2012 for receiving India’s first compulsory licence for Bayer’s cancer drug Nexavar.

A company executive said the observations by the FDA were minor and they hoped to close the issue within four  months. Natco Pharma with seven plants in the country had Rs s840 crore revenue in the last financial year, the majority of it from the domestic market while formulations exports constituted 24 per cent of total income.

Many of the company’s filings in the US for pipeline products come from the two facilities that received the FDA observations, according to sources. Natco Pharma has filed 38 niche abbreviated new drug applications (ANDA) that have a combined market value of $15 billion in the US.

Of these, the approved drugs have a market value $2.2 billion, according to company data.

FDA inspectors list their observations if conditions or practices indicate a drug may be in violation of regulatory requirements. Responses along with an effective plan of action to rectify the gaps must be sent by drug companies after receiving such observations.