Jubilant Pharmova jumps as USFDA classifies Roorkee facility as VAI

Jubilant Pharmova gained 4.53% to Rs 702 after Jubilant Generics received a communication from the US drug regulator, which determined the inspection classification of its Roorkee facility as 'Voluntary Action Indicated (VAI)'.

Jubilant Generics (JGL) is subsidiary of Jubilant Pharma, which is wholly owned subsidiary of Jubilant Pharmova.

The United States Food and Drug Administration (USFDA) inspected JGLs solid dosage manufacturing facility at Roorkee in India from 25 January to 2 February 2024.

Based on this inspection and the USFDA VAI classification, the facility is considered to be in acceptable state of compliance with regard to current good manufacturing practices (cGMP). With this, the FDA has concluded that this inspection is closed.

Meanwhile, the pharma company informed that its subsidiary, Jubilant Cadista Pharmaceuticals Inc., USA has decided to close the manufacturing operations of its solid dosage formulation facility at Salisbury, Maryland, USA. The expected date of cessation of manufacturing operation and first separations at the said facility will be on 17 June 2024.

However, Jubilant Cadista will continue the sales and marketing operations for US market. The said facility manufactures tablets and capsules for the US market and has the capacity to serve 1.5 billion doses.

Over the last few years the US Generics market has been witnessing significant pricing pressure leading to significant losses at Jubilant Cadista since FY2022 onwards. In order to move the US generics business to profitability, the company decided to change the operating model from in-house manufacturing to outsourced manufacturing by selected USFDA approved CMOs for the US market.

Further, the company expects the exports from the Roorkee facility to the US market to increase in a meaningful and gradual manner. As of now the facility, was exporting only one product, Risperidone to the US market.

These actions are expected to improve the gross margins of the generics business by reducing manufacturing, quality management and overhead costs, which will drive the generics business towards profitability. Lastly, the generics business has plans to scale up revenues in the US market through launch of new products.

Jubilant Cadista shall continue to explore various options to utilize or sell the said facilitys land, building and plant & machinery in the due course, stated the drug maker.

Jubilant Pharmova is engaged in radiopharma, allergy immunotherapy, CDMO of sterile injectable, generics, contract research development and manufacturing (CRDMO) and proprietary novel drugs businesses.

The pharmaco has reported a net profit of Rs 66 crore in Q3 FY24 as against a net loss of Rs 16 crore in Q3 FY23. Total income increased by 10% YoY to Rs 1,713 crore during the period under review.

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