Sun Pharma's Halol plant is in trouble yet again, gets USFDA observations

Sun Pharma’s Halol plant is in trouble yet again. This time it has received six adverse observations in a US Food and Drug Administration (FDA) inspection, two months after the regulator lifted its previous warning.

Halol, a key plant for the drug maker to manufacture injectables and specialty drugs, was under regulatory scanner since 2014. The plant got a clearance in July.   

An inspection was carried out by the US drug regulator in the Halol plant in August, during which it detected a few lapses, including inadequate laboratory facilities, absence of required procedures to prevent objectionable microorganisms in drugs, lack of written procedures for cleaning and maintenance of equipment. The firm stock fell 1.8 per cent and closed at Rs 664.20 on Friday following the newsbreak.   In an exchange notification, Sun Pharma said it would be submitting its response on the observations to the US FDA within a fortnight. 

“Sun Pharma is committed to addressing these observations promptly,” it said.

Analysts said observations pertained to deficiencies in healthy manufacturing practices. “FDA is raising questions with regard to sterility and quality, which are key requirements for an injectable plant,” one of them said, and added that product approvals could get delayed after the findings. “What is required is capacity-building and developing quality culture,” another analyst remarked.

In July, the company received its maiden approval from the regulator following clearance for an oncology injectable, with a market size of $35 million. Halol plant was served a warning letter in December 2015 and no products had been approved from the plant since 2014.

The resolution of Halol plant was critical for revival of Sun Pharma's US business, which contributed around 35 per cent of its consolidated sales in the last fiscal. Analysts expect Halol plant's resolution could add to $100 million in the revenue annually. The company has reported for low double-digit growth in 2018-19, and is targeting growth from all markets.