Slimona brand Rimonabant diet pills, made by Cadila Healthcare Ltd., in Mumbai, India. (Photographer: Scott Eells/Bloomberg News)

U.S. FDA Observations On Cadila’s Moraiya Plant Casts Shadow On Future Pipeline

The U.S. drug regulator’s inspection at Cadila Healthcare Ltd.’s Moraiya facility—the largest contributor to the company’s U.S. business—has cast a shadow on the drugmaker’s future pipeline.

The U.S. Food and Drug Administration inspected its formulations manufacturing facility between April 22 and May 3 and issued Form 483 with 14 observations. BloombergQuint has accessed the Form 483 issued to the plant.

The Ahmedabad-based drugmaker, in an exchange filing, said there are no repeat or data integrity related observations and it's confident of responding to the U.S. FDA at the earliest.

The Moraiya facility is the company’s largest facility that makes tablets and injectables. While Cadila Healthcare does not give plant-wise sales or regional breakup, the plant, according to Param Desai, pharma analyst at Elara, contributes 40-50 percent to its U.S. sales and close to 35 out of the pending 114 abbreviated new drug applications are from this plant. Timely remediation of the plant, he said, is necessary as Cadila is dependent on this plant for its U.S. exports.

These FDA observations don't stop any current business but may halt new approvals, according to Investec analyst Anshuman Gupta. “If Cadila Healthcare receives a warning letter, then future approvals get stalled, but in case of an import alert, all U.S. business from this facility will be stalled, driving down earnings per share,” he said, adding that Moraiya contributes over 50 percent to the drugmaker’s U.S. sales and more than 50 percent of the pending approvals are from this plant, he said.

Prosfora Technologies’ expert on good manufacturing practices Amit Rajan told BloombergQuint there are serious issues on documentation and data storage control and may escalate to a serious issue if not responded properly by Cadila Healthcare. “More than data integrity, there are questions on organisation integrity,” Rajan said, adding that the first three observations deal with cleaning of equipment and microbiological contamination which is not acceptable to a sterile plant.

U.S. FDA FORM 483 Observations

  1. Equipment and utensils are not cleaned and maintained at appropriate intervals to prevent contamination that would alter the safety, identity, strength, quality or purity of the drug product.
  2. Procedures designed to prevent microbiological contamination of drug products purporting to be sterile aren't established and followed.
  3. Procedures designed to prevent microbiological contamination of drug products purporting to be sterile did not include adequate validation of the aseptic process.
  4. Aseptic processing areas are deficient regarding air supply that is filtered through high-efficiency particulate air filters under positive pressure.
  5. Aseptic processing areas are deficient regarding the system for monitoring environmental conditions.
  6. The production area air supply lacks an appropriate air filtration system.
  7. Failure to maintain a backup file of data entered into the computer or related system.
  8. There is a failure to thoroughly review any unexplained discrepancy whether or not the batch has been already distributed.
  9. There are no written procedures for production and process controls designed to assure that the drug products have the identity, strength, quality, and purity they purport or are represented to possess.
  10. The responsibilities and procedures applicable to the quality control unit are not fully followed.
  11. Laboratory controls do not include the establishment of scientifically sound and appropriate test procedures designed to assure that drug products confirm to appropriate standards of identity, strength, quality and purity.
  12. In-process specifications aren't determined by the application of suitable statistical procedures where appropriate.
  13. Aseptic processing areas are deficient regarding the system for cleaning and disinfecting the room and equipment to produce aseptic conditions.
  14. Master production and control records lack complete manufacturing and control instructions.

Cadila Healthcare is currently the worst performing stock on the Nifty Pharma Index and has dropped over 17 percent from the start of the year compared to the index gaining 2 percent as of Thursday closing.

Currently, 25 of the 38 analysts tracking the stock have a ‘Buy’ recommendation, while nine recommend ‘Hold’ and four suggesting ‘Sell’.