US FDA issues adverse observations on Glenmark plant

The firm makes dermatology products including ointment and contributes around 10% of its US sales

The US Food and Drug Administration (US FDA) has found deficiencies in manufacturing practices at Glenmark’s plant in Baddi and has issued seven adverse observations (known as Form 483) after an audit earlier this month.

The firm makes dermatology products including ointment and contributes around 10 per cent of its US sales. In the first half of FY18 the company earned Rs 1,772 crore in revenue from the US market, which accounted for 38 per cent of its total revenue.

The firm has around 70 products pending for approval in the US and five of them have been filed from the Baddi plant. Adverse observations to manufacturing unit can result in delayed product approvals and can also impact sales.

“We are in the mid of providing a comprehensive response to the observations and would be replying to the FDA shortly,” Glenmark said in a stock exchange notification.

The plant had underwent US FDA inspection in March too and was cleared without any adverse finding. The company’s stock fell 3 per cent to close at Rs 571.80 on Tuesday.

Analysts believe that the stock would remain under pressure till it is able to resolve the quality issues. Amey Chalke of HDFC Securities said it could take six-nine months for FDA clearance.

During its inspection FDA had found several deficiencies, including failure to review out of specification samples, absence of written procedures and production controls, inadequacies in complaint records, improper data records, non adherence of quality control procedures, absence of control over computers or related systems and lack of training to employees.