General views of drugs (Photographer: Brent Lewin/Bloomberg)

Cipla Says Eight Observations By U.S. FDA For Goa Unit Are Procedural

Cipla Ltd. received eight observations regarding manufacturing practices at its Goa plant that contributes a quarter of the drugmaker’s sales in the U.S.

The facility of India’s second-largest pharma company by market value was inspected from Jan. 22 -25, according to a Form 483 issued by the U.S. Food and Drug Administration, a copy of which was obtained by BloombergQuint.

Goa is one of the largest plants for Cipla catering to the U.S. market. Close to 50 percent of Cipla’s America revenues come from its U.S. subsidiary Invagen and the rest from the facilities in Goa, Indore, Madhya Pradesh and Patalganga, Maharashtra.

Umang Vohra, chief executive officer of Cipla, told BloombergQuint that the inspection was product-specific and not plant-specific. The observations are procedural, he said. Cipla is hopeful of a resolution soon. The company, he said, received three-four approvals after the inspection.

The observations are not worrying but the number is surprising, said Amit Rajan of pharma consultant Prosfora Technologies Ltd. This, he said, is contrary to Cipla’s “image of a good systems company”.

IDBI Capital, in a note to clients, wrote that the drugmaker’s management confirmed the issues to be procedural and that a response was sent to the U.S. FDA. The brokerage said the company expects the timeline for the correction to be less than six months.

Here are the eight U.S. FDA observations for the Goa plant:

  • Failure to review out of specification investigation.
  • Failure of documentation of batch production and control records.
  • Laboratory records incomplete of all data obtained during testing.
  • Establishment test procedures are not followed.
  • No visual examination of reserve samples lots.
  • Appropriate lab determination of drugs missing.
  • Quality control procedures are not in writing and fully followed.
  • Equipment not of appropriate design.

The first observation is a repeat and a little concerning while the others are procedural, said Praful Bohra of brokerage Equirus Capital. Cipla will have to explain to the U.S. FDA the difference in the conclusion tests for the plant to get cleared, he said.

Shares of the pharma major declined as much as 6.58 percent to Rs 522 apiece, the most since Nov., before paring some of their losses.

Also Read: Why Investors Are Betting On MNCs Over Homegrown Drugmakers

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