US FDA makes public warning for Ranbaxy's US facility

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US FDA makes public warning for Ranbaxy's US facility

The US Food and Drug Administration has written a warning letter to Ohm Laboratories, which is one of Ranbaxy’s US facilities. Ohm, which operates three US-based manufacturing facilities, sells generic and branded private label drugs. The move is significant as the US is one of Ranbaxy’s largest markets.

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Here is a verbatim transcript of the exclusive interview with Vikas Dandekar on CNBC-TV18. Also watch the accompanying video.

Q: What exactly is this letter about? Is this just a warning and what does this mean for Ranbaxy?

A: Basically, Ohm Labs was inspected sometime late last year and there was a warning letter, which was issued to them, which is now posted on the Food and Drug Administration (FDA) website. It's quite elaborated in the way it has described things. One notable point is about stability study conducted on drug, which is strikingly similar to what notes were made in Ranbaxy's Indian facilities in Paonta Sahib. So nothing strikingly alarming there but the question is coming back to the quality issues that have been followed there.

At that time when the letter was issued Ranbaxy had said that it is to do with the liquid facility and the financial impact will not be significant. We need to get into the details and see, what are the observations that has been checked and solved by Ranbaxy and how it is taken by FDA now.

Q: A warning letter was issued in December, wasn't it? What is the procedure now? How much time do they get and if you could tell us how seriously this allegation will be taken by the drug industry itself and by investors since this is the third warning that they have got?

A: The thing is normally FDA gives a lot of time, maybe about three-four weeks, for companies to respond and check on the observation that has been noticed and if those are significant then only there is a drastic measure, which is taken. However, it had not taken any in the case of Ohm Labs. We also understand that observations have been answered by Ranbaxy's US staff.

It may not have been found to be totally okay but this is how the whole process evolves. Coming to the point of how much impact it might have. We do not know exactly. There is a mention of a couple of drugs, which is one of the big product.

The big question is - Ranbaxy has shifted some of its applications to Ohm Labs from its Paonta Sahib facility mainly and if that at all gets impacted that is something that is quite unclear. But this warning letter - again coming back to the same issue - Mandideep of Lupin was examined and cleared but Devas was also ready, which is of Ranbaxy.

But that has not been checked as yet. So we do not know what it actually going on inside but there is a lot of delay. We also know that AstraZeneca's esomeprazole active pharmaceutical ingredient (API) has not commenced even when it was to happen from May or June 2009.

Q: In the past there were some charges of even falsifying data. It was accusation only. This looks to be relatively minor compared to that, does it?

A: Absolutely yes. That was falsification of data that was a lot of tampering of data and that was a very serious charge leveled against Ranbaxy's Poanta Sahib's facility in 2005 and that is still not clear. This is definitely not as serious and grave as that. So hopefully there will be a resolution.