US regulator observations at Baddi unit may not effect Cadila

Observations are related to Pre-Approval Inspection and the product is yet to be manufactured

Ahmedabad-headquartered Cadila Healthcare has today informed the Bombay Stock Exchange (BSE) that its Baddi plant has received three observations from the US Food and Drug Administration (USFDA) related to a pre-approval inspection (PAI) for a specific product filed. While the company's shares on the BSE tanked 1.76 per cent in day's trade, analysts say this would have no immediate impact on revenues.

Cadila Healthcare said in its statement that the USFDA had inspected its formulations manufacturing facility at Baddi from February 20 to March 1 and at the end of the inspection, there were three observations given under Form 483. "All these three observations are related to Pre-Approval Inspection (PAI) for a specific product filed. This product is yet to be manufactured or marketed in the US. The company is already in the process of responding to the PAI observations. Apart from above product related observations, there are no observations related to cGMP practices," it said.

As per Sarabjit Kaur Nangra, vice president, research, pharma, Angel Broking the share of US business in its overall revenues is around 40 per cent. She added that this USFDA observation is unlikely to have any serious impact on Cadila Healthcare's revenues as it is for a pre-approval stage product which has not been launched in the market. As such the share of Baddi in its US business is not known.

The Rs 10,000 crore Group has around 200 pending abbreviated new drug application (ANDA) for the US market, of which around 60 are from its Moraiya plant in Gujarat.

Moraiya was recently inspected by the USFDA which was concluded without any observations. It is now believed that the warning letter on the plant would be lifted soon and Cadila Healthcare would see product approvals coming in within the next two months or so.

The company's shares ended at Rs 430.95 a share, down 1.76 per cent in day's trade on BSE.