“Consequent to this, the company has voluntarily decided to temporarily suspend API shipments from this manufacturing facility for the US markets till this issue is addressed,” IPCA said in a release.
Shares of IPCA tanked more than 14 per cent intraday on the BSE and closed at Rs 727.65, down by 13.06 per cent or Rs 109.35 on Thursday.
As of FY2014, the US market has contributed sales of Rs 420 crore (12 per cent of total sales) for IPCA Labs.
This voluntarily stoppage of API shipments from the Ratlam manufacturing facility will also have an impact on the company’s formulations export business to the US market since IPCA Labs’ formulations manufacturing units situated at Piparia (Silvassa) and SEZ, Indore (Pithampur) use the APls manufactured from the Ratlam facility for manufacturing formulations for the US market, IPCA said.
Sales of the company are expected to be hit with a loss of Rs 150 crore in the next six months, according to company officials. The company expects to address the FDA concerns in about four to six months.
“The net impact on the company would depend on the time it takes to come out of the same or shift its business to another FDA-approved facility. FY2015 sales would be impacted,” Sarabjit Kaur Nangra of Angel broking said in her report.
In March, Sun Pharmaceuticals had received an import alert from the FDA for its cephalosporin facility located at Karkhadi, Gujarat for non-compliance of current Good Manufacturing Practice or cGMP regulations.
In the past, Wockhardt too has been hit by an FDA import alert.