U.S. FDA Woes Continue For Lupin
Lupin got a letter from the U.S. FDA classifying the inspection conducted at its Mandideep facility as Official Action Indicated.
The U.S. regulator barred Lupin Ltd.’s Mandideep, Madhya Pradesh facility from getting new approvals for exporting to the U.S.—its largest market—on the back of manufacturing practices concerns.
The Mumbai-based drugmaker received a letter from the U.S. Food and Drug Administration classifying the inspection conducted at its Mandideep (unit-1) facility in December 2018 as “Official Action Indicated”, according to its exchange filing. This 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, the filing said. Lupin may, however, continue to export existing drugs, according to the status on the website of the drug regulator.
Lupin said there are no new drug master file and abbreviated new drug applications pending review or approval from the Mandideep (unit-1) facility. The company also doesn’t expect this classification to disrupt supplies or existing revenue from operations of this facility. Lupin said it’s in the process of sending further updates of its corrective actions to the regulator and is hopeful of a positive outcome.
“The Official Action Indicated status means that there’s a high probability that this plant could receive a warning letter,” Amey Chalke, pharma analyst at HDFC Securities, told BloombergQuint. He, however, said there won’t be any significant impact on the company’s future earnings as it said there are no pending filings from this plant.
Agreed Surajit Pal, pharma analyst at Prabhudas Lilladhar. The latest classification is negative, he said. Though the company said it will not stop its supplies to the U.S., according to Pal, the warning letters or Official Action Indicated status generally slows down the supplies as they focus more on strict quality control norms and remediation work. The lack of new approvals will impact growth and margin from the export business of the plant in the U.S. in the medium term, he said. “The impact will be two-fold—lower revenue and higher overhead due to consultant costs and remediation work.”
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 told BloombergQuint requesting anonymity.
The U.S. drug regulator issued 22 observations to 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.
This is Lupin’s third plant that faced adverse U.S. FDA actions. It’s still in the process of resolving warning letters on Goa and Indore plants, received in November 2017.
“Currently, there are no drug master file and abbreviated new drug applications pending filings from this site. To that extent, the business will be impacted only in case of an import alert,” said Param Desai, pharma analyst at Elara Capital. “However, this may continue to have an overhang on the stock given that Goa and Pithampur (Indore) facilities are also under U.S. FDA warning letter.”