Portuguese drug regulator Infarmed issued observations on January 3 after it detected non-conformities in good manufacturing practices related to the granulation and primary packaging of tablets in batches of drugs related to paracetamol and metformin supplied to Mylan, Bluepharma and Sandoz.
Shares of Hyderabad-based drug maker Granules India fell 13 percent on Monday with Portuguese drug regulator Infarmed making 11 observations on company’s Gagillapur facility near Hyderabad.
Infarmed had issued observations on January 3 after it detected non-conformities in good manufacturing practices related to granulation and primary packaging of tablets in batches of drugs related to paracetamol and metformin supplied to Mylan, Bluepharma and Sandoz.
Portugal, member of European Union, banned the concerned batches from sale in Europe. The company estimates the revenue impact of the Infarmed action to be in the range of Rs 28 crore.
Close to 8 percent of the company's total revenues from Europe comes from this plant, the company said. Granules' revenues in FY16 stood at Rs 1,431 crore of which Europe business constituted one-fourths.
Krishna Prasad, managing director of Granules in an interview to CNBC-TV18 said there are no data integrity or falsification issues. “I am very happy to state there is absolutely no data integrity falsification issues and again no repetition,” he said.
The company said it will submit its response to the Portuguese authority by January 17 and will seek a re-inspection.
“These are fresh issues which are normally not taken up by agencies. So, very interesting observations they are and we have started remediation measures. Most of them in the last two days have been completed and in the next five days we expect to complete the entire thing and by January 17 we expect to send the report to the Portuguese authority,” Prasad said.
Granules is one of the world’s leading producers of analgesics such paracetamol and ibuprofen and anti-diabetic drug metformin. The company supplies finished dosages and active pharmaceutical ingredients of these drugs to dozens of generic companies.
“The observations look more procedural in nature; we expect the company to be able to resolve it soon,” said Nikhil Shetty, research analyst at BP Wealth. The same plant cleared USFDA audit three months ago, added Shetty.
Shetty cautioned saying that any delay in resolving the observations could have a serious impact on the company’s revenues.
Granules' OmniChem facility, a 50:50 joint venture company of Granules and Japan-based Ajinimoto OmniChem, located at Vizag, last month received seven observations from USFDA. Granules said it has responded to those observations within the stipulated time period. The facility currently manufactures API intermediates.
Shares of Granules dropped 9.80 percent and were trading at Rs 101.25 on BSE at 1.20 pm, the benchmark Sensex declined 0.07 percent to 26,735.36 points.