Lupin’s Stock Falls After U.S. FDA Issues Warning Letter To Mandideep Plant

Lupin Ltd. said the U.S. drug regulator has issued a warning letter to its plant in Mandideep, Madhya Pradesh over manufacturing practices, a move that may delay future approvals for exporting to its largest market.

The warning letter—issued when the U.S. Food and Drug Administration finds that a manufacturer has violated a regulated activity—was based on an inspection of unit-1 of Lupin’s active pharmaceutical ingredient facility. The plant had received an “official action indicated” status in March after an U.S. FDA inspection in December, according to an exchange filing by India’s fifth-largest generic drugmaker.

After a warning letter is issued, any facility may be subject to regulatory or administrative action and the U.S. FDA may withhold approval of any pending applications or supplements in which this facility is listed. Lupin may, however, continue to export existing drugs, according to the status on the website of the drug regulator.

Shares of Lupin today dropped as much as 3.3 percent, the most in nearly a month, compared with 1.4 percent fall in the NSE Nifty Pharma Index.

The company, however, said there are no drug master file and abbreviated new drug applications pending review or approval from the Mandideep (unit-1) facility. While it doesn’t believe that the warning letter will have an impact on disruption of supplies or the existing revenue from operations of this facility, Lupin in the filing said it’s committed to addressing the concerns raised by the U.S. FDA and will resolve these issues at the earliest.

Lupin’s Mandideep unit is the third to receive a warning letter after its facilities in Goa and Indore. The company’s plant in Somerset, New Jersey has an official action indicated status.

The Mandideep plant has two units. Unit-1 makes Cephalosporin active pharmaceutical ingredient and Cephalosporin solid oral dosage (antibiotic) and unit-2 produces Cardiovascular Pril API (to treat high blood pressure).

The plant contributes less than 10 percent of the total U.S. revenue, a company official had earlier told BloombergQuint requesting anonymity. The U.S. drug regulator issued 22 observations o Lupin’s Mandideep plant after an inspection conducted in December 2018. While the Cephalosporin API unit received 10 observations, the Cephalosporin solid oral dosage facility received eight, according to the Form 483 on the U.S. FDA website. The inspection at unit-2 closed with four observations.

Nilesh Gupta, managing director of Lupin, however, said the company’s plants in Somerset and Goa would be forerunners for going in for resolution.

“Somerset and Goa would be forerunners. We want to work deeper in Indore and in Mandideep. For Mandideep, there are no applications pending, it’s not time-sensitive, we just have to get it right,” he told BloombergQuint in an interview. “In Indore, there are applications pending, so that’s time-sensitive, which is why this programme (plant remediation) has begun there as well. But we will give Indore a good six months before we make sure that it’s ready.”