Wockhardt down 5% on Chikalthana plant concerns
Wockhardt further says that the regulator will be issuing a restricted GMP (good manufacturing practice) Certificate to the site along with a statement of non-compliance for the said site.
November 07, 2013 / 11:01 IST
Moneycontrol Bureau
Shares of Wockhardt are locked at 5 percent lower circuit on Monday after UK's health regulator withdrew good manufacturing practice (GMP) certification of the Chikalthana facility at Aurangabad.The Mumbai-based pharmaceutical company has received a letter from Medicines & Healthcare Products Regulatory Agency, United Kingdom (UKMHRA) whereby the agency has decided to withdraw previously issued GMP Certificate to company's facility situated at L1, MIDC, Chikalthana, Aurangabad, the company said in its filing.Wockhardt further says that the regulator will be issuing a restricted GMP certificate to the site along with a statement of non-compliance for the said site.However, the company can continue exporting some critical drugs to the UK because there is no feasible alternative in the market."In order to avoid market shortage of medically essential products, the GMP certificate will be conditioned to permit continued manufacturing and QC testing of ‘critical’ products in situations where it has been agreed by the national competent authority or EMA (as appropriate) that there is no feasible alternative in the market concerned. Accordingly, the company shall be able to manufacture and supply from the said facility certain medicinal products critical to public health," Wockhardt said.The impact of the withdrawal of GMPC on existing business will only be known once the company receives further communication from UKMHRA. The said facility contributes approximately 12 million pound from the UK and EU markets to the consolidated annual revenues of the company.Meanwhile, Macquarie has cut its target price on the stock to Rs 480 from Rs 750 earlier and also cut FY14 and FY15 earnings per share estimates to Rs 96 & Rs 80, respectively.The brokerage house says that adverse action from USFDA could impact earnings projection as company's 70 percent of FY15 expected EBITDA is dependent on Chikalthana facility.Macquarie expects the stock to trade at discount to fair value.At 09:46 hours IST, the stock was quoting at Rs 499.30 on the Bombay Stock Exchange. There were pending sell orders of 122,386 shares, with no buyers available. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
