Aurobindo Pharma, India’s second-largest drugmaker on February 7 said it had submitted its response to USFDA outlining corrective and preventive action taken to resolve the regulatory compliance issues raised by the agency on critical Unit-4.
The company said it is yet to hear from the agency.
Unit 4 site located in Pashamylaram, near Hyderabad, produces injectable and ophthalmic drugs accounting for 7-8 percent of US sales and has 47 abbreviated new drug applications pending for approval.
The company said around 15 approvals are pending from this facility in the next year alone, which are crucial for the growth of the company’s US business that constitutes about 50 percent of sales. The US formulations revenue grew at an impressive 22 percent year-on-year to Rs 2,969.4 crore in Q3FY20.
The site was inspected Aurobindo Pharma's (ARBP) Unit 4 from November 4 -13, 2019 and issued Form 483 with 14 observations. USFDA states its observations on Form 483 at the end of the inspection. The observations point to any deficiencies in compliance with current good manufacturing practices (cGMP).
Typically, USFDA categorizes inspection outcomes as official action indicated (OAI), voluntary action indicated (VAI) and no action indicated (NAI) from 90 days of the inspection. In Aurobindo’s Unit 4 case the inspection is yet to be classified by USFDA.
While NAI and VAI indicate only minor objections, OAI points to significant objectionable conditions that warrant FDA sanctions
Meanwhile, Aurobindo Pharma management said the company is setting up a low volume, high-value plant in the US that takes another 12 months to complete. The new plant could possibly help the company to site transfer some key products if in case the facility doesn’t get a clean chit.
Last year was a challenging one for Aurobindo Pharma on the regulatory compliance front. Around eight sites belonging to the company were inspected by the USFDA, of which Unit 11 has been issued a warning letter, while Units 1 and 9 have been classified as OAI.
On Unit-11 which is under warning letter - the company said it had completed the remediation work towards November end, and requested USFDA for a re-inspection. The company said it expects the inspection to happen anytime.
“We keep continuously looking at ways and means of improving ourselves, in fact, that we are also adding more senior people to help our team to find out how do we further enhance our capability and competency in terms of getting ready for any inspection,” said N Govindarajan, MD of Aurobindo Pharma at company’s earnings call.
Sandoz deal & debt reduction
On Sandoz deal, Aurobindo said it expects the approval of the US Federal Trade Commission (USFTC) by end of March.
The company said that the delay was on account of certain issues related to the documentation and inquiries from USFTC seeking more details on some products.
The company said it wants to be zero debt in the next three years, excluding the debt it had taken on its acquisitions of Spectrum and Apotex.
Aurobindo has a net debt of $446 million on December 31, 2019, of which $201 million debt was its original debt, the remaining debt was added on account of the acquisition of Spectrum and Apotex.
Aurobindo with strong cash flows from the US market was able to pare debt worth $147 million in the first nine months of FY20.