Wockhardt did not disclose how many drugs were banned, but said in a filing to the exchanges on Wednesday that among those that cannot be exported is Metropol X a product in the cardiovascular therapeutic segment which reportedly contributes $140 million or roughly 14% to the firms total revenues and enjoys a margin of 50%.
Sales earned in the US market from drugs produced at Chikalthana were close to $40 million in Q2FY14. Total revenues earned from the US market in FY13 were R2,899 crore ($534 million approximately) to which the facility contributed around $230 million.
On May 24 this year, the USFDA had issued a ban on the Waluj plant, also in Maharashtra, as a result of which revenues fell 26% year-on-year to $87 million in Q2FY14 in dollar terms and 19% in rupee terms.
The import alert on Chikalthana comes on the back of the UK health regulator withdrawing the good manufacturing practices (GMP) certificate issued to the plant in October this year and subsequently recalling five prescription drugs. Sales to the UK are estimated at about 12 million, of which about 9 million was adversely affected by the withdrawal and subsequent product recall.
The Wockhardt stock tanked 14% intra-day on Wednesday before closing at R430.15, down 8.9% on the BSE. The company has hired US-based compliance advisers Lachman Consultants to iron out its regulatory issues.
While there has been heightened scrutiny by overseas drug regulators of manufacturing facilities in India, these have translated into fewer import alerts compared with those for other countries.
While 9% of USFDA-approved manufacturing units in India have faced an import ban, the number for Mexico is as high as 74%, while for British and Canadian USFDA-approved facilities, it is 30%.
India has the second-highest number of USFDA-approved manufacturing facilities outside the US at 526. China has the highest number of facilities after US, 960, of which 8% have faced an import ban.
Wockhardt has 53 generic drug approval applications or ANDAs pending approval, of which 43 applications were from the Waluj and Chikalthana plants. Around 30 applications have been filed either last year or in the current year. The management is in the process of moving the ANDAs to the new manufacturing plant located at Shendra in Maharashtra.
Wockhardt managing director Murtaza Khorakiwala had said after the Q2FY14 results that there had been a sequential 20% fall in the business from Chikalthana, with the firm losing customers and a price erosion seen in some products. Of Wockhardts seven production plants, the facility near Aurangabad in Maharashtra is its oldest.
The company has already initiated several steps to address the observations made by the USFDA and shall put all efforts to resolve the matter at the earliest, Wockhardt said in a statement. The Mumbai-based companys EBITDA for the second quarter was Rs 196 crore, a fall of about 62% compared with Rs. 517 crore earnings recorded in the the same period last year due to the product recalls, costs associated with correction of various GMP issues, stock write-off and legal expenses.
Wockhardts revenues in FY13 grew 29% to Rs 5,610 crore while net profit was Rs 1,595 crore.