US FDA clears Lupin's Goa plant, paves way for new product approvals

Goa plant has an annual capacity of 6 billion units of tablets, capsules or oral suspension drugs. It accounts for 18-20% of firm's US revenue

The US Food and Drug Administration (FDA) has cleared Lupin’s Goa plant paving the way for new product approvals.

The Goa plant has an annual capacity for producing 6 billion units of tablets, capsules or oral suspension drugs. It accounts for 18-20 per cent of the drug maker’s US revenue.

On Wednesday, Lupin announced that the US FDA has issued an establishment inspection report with a voluntary action-indicated status for the Goa plant. The plant was served a warning letter in 2017. It had received seven observations from the US regulator after its inspection in September. The company’s stock gained nearly 7 per cent on this development and closed at Rs 943.05 on the BSE.

Establishment Inspection Report (EIR) entails closure of inspection by the USFDA. It indicates that the US FDA is satisfied with the company’s responses to its observations. Voluntary Action Indicated (VAI) implies that the USFDA will not recommend regulatory or enforcement action because any objectionable conditions do not meet the threshold for action.

“The company can supply to the US with full approval status from USFDA,” Lupin’s chief financial officer Ramesh Swaminathan said. As the warning letter had impacted product approvals, the company adopted a de-risking strategy by filing products from some of its other facilities.

“The Goa site has a very important place in the U.S. market with the number of affordable, quality medicines we supply, and we now look forward to new products flowing out of the site again. We remain committed to meet and exceed global standards of quality and compliance at all our manufacturing facilities globally,” Lupin’s managing director Nilesh Gupta said.

An analyst from a domestic brokerage firm said while the Goa plant is a key plant for Lupin, not many important products filed from the facility are pending approval. “So the USFDA decision may not have much of a financial impact. Still this gives hope that the company’s other plants would receive clearance from the US regulator,” he said.