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FDA Observations Not Critical, Says Wockhardt
The company says none of the nine observations made by the FDA are critical and these issues can be resolved in next 2 to 3 months
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Drug maker Wockhardt Ltd, which has got a fresh salvo from the US Food and Drug Administration raising negative observations on manufacturing standard compliance at the company’s factory located at Shendra in Aurangabad last week, said on Monday (18 January) that none of the nine observations made by the FDA are critical and these issues can be resolved in 2 to 3 months.
The FDA observations on Wockhardt’s Shendra plant had triggered a 15 per cent drop in scrip in the past few trading days. The Shendra unit, which currently manufactures products for UK and Ireland markets, was inspected by the US FDA in the past six months after the company applied for US regulatory approval to start producing some products from this plant for that market after its US approved facilities located at Waluj and Chikalthane in Aurangabad have been under US import alert for some time.
"By the time we respond to the FDA on these observations in 15 days, we would have cleared and complied with more than half of these observations and the balance we should be able to complete in another two months or so," said Habil Khorakiwala, chairman, Wockhardt, in a conference call on Monday.
Although the stock has shown signs of recovery after the management clarification on the FDA issue on Monday, it traded at 4.6 per cent down at Rs 1229 per unit in the morning.
Chairman Khorakiwala said that the company is hopeful of resolving the pending issues at its other units also sooner.
“Though our US business is impacted due to the compliance issues, business in the other markets continued to be strong currently and grows at around 20 per cent,” said Khorakiwala adding that the company has also filed some products in the US market from third party manufacturing units.
However, the issues raised by the FDA at the Shendra unit will have an impact on the Wockhardt’s plans to revive its business in the US as it wanted to use this unit as an alternative site for US market. The drug maker has plans to use this facility to export some oral solids and injectables to the US, as its other facilities have import alerts against them.
Wockhardt, which serves the US market mainly from its plant in Chi cago currently, is able to export only two products from its Chikhalthane unit.
The company, which faced severe financial crisis after the 2008 global meltdown and had to go for a corporate debt restructuring (CDR) during 2009-12, could come out from the crisis successfully following its key focus in the US market then. But, the share of US market that was about 45 to 50 per cent to its overall revenue , slipped to 24 per cent two years ago due to the manufacturing compliance issues at the US export facilities.