Wockhardt shares slumped over 14 per cent on Monday after US Food and Drug Administration (USFDA) issued an import alert for its Ankleshwar plant for alleged violation of good manufacturing practices. Ankleshwar plant, which manufactures active pharmaceutical ingredients, is third plant of the company to receive an import alert from the US drug regulator. It was inspected last year by the US regulator.
At 10.17 am, share price of the company was trading 9.44 per cent down at Rs 919.70. The scrip opened at Rs 955 and has touched a high and low of Rs 960 and Rs 870, respectively, in trade so far. Later, the scrip settled 9.88 per cent down at Rs 915.30.
Wockhardt’s two plants at Chikalthana and Waluj have already been banned from exporting drugs to the US by the FDA. The move could be seen as a setback to the company’s plans to revive its US business. In FY16, share of the firm’s US business in the total sales dropped to 22 per cent from 24 per cent a year ago due to import restrictions. The Ankleshwar plant contributes 10-15 per cent of the US sales (Rs 964 crore in FY16).
The import alert has been issued under ‘Import Alert 66-40’ that authorises the health regulator “detention without physical examination of drugs from firms which have not met drug GMPs”.
Wockhardt is one of the few companies with end to end integrated capabilities for its products, starting with the manufacture of the oral and sterile API’s, the dose forms and marketing through wholly owned subsidiary in the US, enabling the company to capture maximum value.