MUMBAI: Sun Pharmaceuticals Ltd said the US FDA issued a Form 483 with three observations on its Halol facility in Gujarat.Form 483 is issued when drug inspectors find deviations from good manufacturing practices and the observations were related to data reporting standards, testing procedures, and lab controls.
But, shares of Sun rose about 5 percent on Friday as traders heaved a sigh of relief that the number of observations reduced to three from nine earlier. It may be noted that the FDA made nine observations in December 2016. A zero observation scenario was unlikely, given the size of the facility, HDFC Securities said in a note.
“While Halol is crucial for Sun Pharma’s generic business going forward, it currently contributes in the low single-digits to the overall top line,” it added.The inspection was conducted between February 12 and 23, and Sun said it will address the issue and submit a reply to the drug regulator within a fortnight. “The company remains committed to working closely with the US FDA and continues to enhance its good manufacturing practices compliance on an ongoing basis,” Sun said in a filing with the bourses.
Halol is critical for Sun as several products including injectables, inhalation products and others are filed from the facility. But, in December 2015, the FDA issued a warning letter preventing Sun from applying fresh filings. Prior to the warning letter, Halol was contributing about $400 million to the company’s top line or nearly 12-15 percent of sales but is now reduced to $250 million.
Timely resolution is crucial as generic drug makers have been reducing prices in the US and lifting of the sanctions will unlock complex generic filings and allow the company to ramp up existing products.