U.S. FDA Revokes ‘Voluntary Action Initiated’ Status For Aurobindo Pharma’s Hyderabad Unit
A man rides past an Aurobindo Pharma Ltd. production facility in Jadcherla, Telangana. (Photographer: Prashanth Vishwanathan/Bloomberg)

U.S. FDA Revokes ‘Voluntary Action Initiated’ Status For Aurobindo Pharma’s Hyderabad Unit

The U.S. drug regulator revoked the ‘Voluntary Action Initiated’ status issued to Aurobindo Pharma Ltd.’s plant in Hyderabad, days after indicating it might not pursue further regulatory action.

The company on Friday received a communication from the U.S. Food and Drug Administration that the inspection conducted at its unit-IV — a general injectable formulation plant — “is still open and under review, by way of rescindment of 90-day VAI letter”, according to an exchange filing.

On Feb. 19, shares of Aurobindo Pharma jumped the most in more than a decade after the drugmaker informed the stock exchanges that it has received the VAI status—allowing the company to make voluntary changes to the unit if needed and shielding it from any adverse action by the regulator. The American regulator had issued a Form 483—a kind of inspection report—with 14 observations to company’s unit-IV in Pashamylaram, Hyderabad after its inspection from Nov. 4-13, 2019.

The rescindment of the status was “probably” a first, Praful Bohra, an analyst at Emkay Global, said, adding the move will be a “negative for the stock”.

Deven Choksey, managing director of KR Choksey Securities, said the regulator’s “unpredictable” move is detrimental to the interests of all shareholders. “The stock should react negatively on Monday, but the actions of the U.S. FDA are the bigger worry in this case,” he told BloombergQuint.

Also read: Coronavirus Outbreak: ICRA Revises India Pharma Industry Outlook To Negative

The unit-IV currently contributes 10 percent to Aurobindo Pharma’s U.S. sales. Of the company’s total 111 abbreviated new drug applications pending approvals, 46 are from this plant. That’s 25 percent of its overall filings. The U.S. FDA had inspected eight plants of the company last year and issued adverse observations that may affect production.

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