Sun Pharma's Halol unit gets 10 observations under USFDA's Form 483

Plant's OAI status is unchanged, hinting at status quo; Sun Pharma says will respond to observations within 15 days

The USFDA has issued a form 483 with 10 observations after inspection of Sun Pharma's Halol facility, the company said. The unit, however, now has a low contribution to the company’s turnover.

The Halol facility was classified ‘Official Action Indicated (OAI)’ in March 2020, and was awaiting re-inspection from the US regulator. Due to the pandemic related travel restrictions, the re-inspection got delayed, and now the USFDA has issued a form 483 with observations.

In a notification to the stock exchanges, Sun Pharma said that the US Food and Drugs Administration (USFDA) did a Good Manufacturing Practices (GMP) inspection of Sun Pharmaceutical Industries Halol facility in Gujarat from April 26 to May 9, 2022.

“At the conclusion of the inspection, the USFDA issued a Form-483, with 10 observations. The Company is preparing the response to the observations, which will be submitted to the US FDA within 15 business days,” Sun Pharma said.

It added that it is committed to addressing these observations ‘promptly’ and that it remains committed to working closely with the USFDA.

A Mumbai-based analyst highlighted that the OAI status of the plant still remains, and thus this form 483 with 10 observations is status quo at best. Sun Pharma stock fell by 2.74 percent on the BSE on Tuesday.

The analyst further added that Halol facility is estimated to contribute 5-6 percent of the company’s turnover at best. “Halol has become smaller over the years.There may be a few important products that the plant still makes, but new filings are from other plants of Sun Pharma,” he added.

The Halol facility of Sun Pharma has been under the USFDA radar for the last few years. In the earnings call after the December quarter, Sun Pharmaceuticals MD Dilip Shanghvi had said that they were expecting a re-inspection of the site soon.

In the 2020-21 annual report Sun Pharmaceuticals had noted that during the fiscal the Halol facility did not undergo any USFDA audit due to the travel restrictions related to the pandemic. The Halol facility was classified as an ‘Official Action Indicated (OAI)’ in March 2020.

The company had said that it had already completed all the corrective actions required to get the facility back into compliance and that they were waiting for a re-inspection from the USFDA.

In December 2019, the USFDA inspected the Company’s Halol facility and issued Form 483 with 8 observations. Following submission of the Company’s response in January 2020, the USFDA classified the inspection status as Official Action Indicated (OAI).

Sun Pharma continues to manufacture and distribute products to the US from this facility. An OAI status, however, implies that the FDA may not allow new approvals from the Halol facility till the OAI status is changed.