Wockhardt gets USFDA warning over Waluj plant

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Habil Khorakiwala Habil Khorakiwala
SummaryDrug manufacturer Wockhardt, which makes insulin and hepatitis vaccines and is promoted by Habil Khorakiwala, has been warned by the US Food and Drug Administration

Drug manufacturer Wockhardt, which makes insulin and hepatitis vaccines and is promoted by Habil Khorakiwala, has been warned by the US Food and Drug Administration (USFDA) for its facility at Waluj in Maharashtra not meeting manufacturing norms. In May this year, the USFDA had issued an import alert on the Waluj facility, which makes injectables and solid dosages.

Earlier this month, Wockhardt was barred from producing drugs for Europe, after its Waluj factory failed to meet some guidelines from the UK regulator.

The US is Wockhardt’s biggest market and fetched the firm $531 million in FY13. Together with India, the US market brings in around 65% of total revenues. In FY13, Wockhardt reported net sales of R5,622 crore and net profits of R1,564 crore.

In a notice to the BSE on Saturday, Wockhardt said it had received a “warning letter” from the USFDA, in reference to the import alert issued in May, listing observations made during the inspection.

“The company has already initiated several corrective actions to resolve the same,” the notice said. Wockhardt said the impact on consolidated revenues remained as in May; at the time it had assessed the hit at $100 million.

In early July, Bloomberg reported that Wockhardt was barred from producing drugs for Europe, after its Waluj factory failed to meet some guidelines from the UK regulator. The report cited an email from the UK’s Medicines and Healthcare Products Regulatory Agency, saying it was working with Wockhardt, the USFDA and other international regulators to help resolve the issues so production could resume. The statement of non-compliance for the plant covers medicines to Europe and the UK, the report noted.

Analysts had pointed out in May, following the import alert, that both injectibles and the solid dosage facility would not be able to ship products to the US, nor was it likely that any new product would be approved till the USFDA’s issues were resolved. The time taken for such matters, they observed, was typically between 18 and 24 months.

While key products like Toprol XL and Flonase get shipped from other facilities, sales from the Waluj plant could be hurt by roughly 9% of estimated FY14 sales, they estimated. The impact on overall profits could be higher than 10%, they said, since there could be other costs relating to remediation.

The USFDA import alert for Wockhardt said that the “detention without physical examination may be

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