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Sun Pharmaceutical Industries’ largest Indian facility for US in Halol, Gujarat, which was hit after it got 23 observations from the US Food and Drug Administration (FDA) in September 2014, is likely to regain its earlier sales figures soon. Analysts believe it would be able to regain its earlier sales figures of $30-35 million per quarter as soon as second half of this financial year due to a gradual supply improvement from the plant.
According to a latest report by CLSA, the impact of supply issues from Halol was around $60-70 million, while price erosion cost it around $30-40 million. "We believe Sun can regain lost market share in limited competition products like Sumatriptan auto injector, Azelastine nasal spray, Oxcarbazepine and Leuprolide injections. In products where competition is high like Duloxetine, Venlafaxine, Carbidopa/Levodopa, regaining lost market share could be difficult,” the report said.
Managing director Dilip Shanghvi had in a recent analyst call indicated that the company would upgrade its facilities to address the observations indicated by the US FDA. “Some of these remedial steps had temporarily impacted our supplies for Q4. Supplies have not fully normalised and will take some more time to reach optimum levels. We remain committed to achieving 100 per cent compliance," he said.
Of the 23 observations, 14 were for the injectable unit and nine for the oral solids unit. Sun was required to make changes in standard operating procedure as well as processes. Halol contributed about seven per cent of the company’s US sales and around 40 per cent of its US sales sans Taro during FY15.
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Analysts believe that since there are no data integrity issues pertaining to Halol facility, an import alert from the US FDA was not likely. In fact, Sun Pharma Advanced Research Company received a nod from the US health regulator in March for its new drug application for Elepsia XR tablets that are used for treatment of epilepsy.
The Halol plant had received 23 observations from the USFDA during an inspection in September 2014. Of the 23 observations, 14 were for the injectable unit and 9 were for the oral solids unit. Sun was required to make changes in SOPs (standard operating procedure) as well as processes to meet USFDA compliance. Halol plant primarily manufactures injectables, nasals and oral solids. Key products manufactured here are Liposomal Doxorubicin, Duloxetine Hcl, Sumatriptan Auto Injector, Diltiazem Hcl and Tamsulosin Hcl.
CLSA feels that Sun could see a gradual recovery in sales from limited-competition products like Azelastine, Sumatriptan Auto Injector and Oxcarbazepine. The report further indicated that Sun reported a $100-million decline in US quarterly sales (ex-Taro) from second quarter of FY15 to fourth quarter of FY15, and the impact of supply issues at Halol was around $60-70 million while $30-40 million was lost due to price erosions in key products like Doxycycline, Valsartan and Duloxetine.
REGAINING POSITION
- Sun Pharma’s Halol plant received 23 observations from the US FDA in Sept 2014
- Of 23 observations, 14 were for the injectable unit and nine were for the oral solids unit
- Halol is Sun Pharma's largest Indian facility for the US
- The plant contributed 40% of US sales (ex-Taro) in FY15
