Divis Vizag unit fails USFDA audit on alleged reluctance to share drug testing data

In its warning letter the USFDA clarified that Divis' got two types of import alerts, one is the usual 66-40 import alert that is issued for firms that haven’t met good manufacturing practices and the other 99-32 a rare import alert for firms that refuse or block FDA inspectors to inspect.

In the warning letter addressed to Kiran S. Divi, Director and President of Operations at Divis, the USFDA alleged the company wasn't cooperative in providing its inspectors access to records.

“At multiple times during the inspection, FDA requested records of current good manfuturing practices (CGMP) activities performed in your R&D laboratories at the behest of your quality unit,” US FDA said.

“However, you limited the inspection by providing only a subset of the requested records, and our investigators also found at least one of the requested records shredded in the trash. Finally, our investigators requested chromatograms to substantiate your claim that you had identified and quantitated the impurities, but you never provided the records that our investigators asked for to support your claim,” it added.

“When an owner, operator, or agent delays, denies, limits, or refuses an inspection, the drugs may be deemed adulterated under section 501(j) of the FD&C Act,” the agency further added.

The USFDA also said the response from the company to two other observations it made were also inadequate. It made observations that included failure to ensure that test procedures are scientifically sound and appropriate; and failure to prevent unauthorized access or changes to data and failure to provide adequate controls to prevent manipulation and omission of data

As part of data integrity remediation, the USFDA asked the company for a comprehensive investigation into the extent of the inaccuracies in data records and reporting. .

“Your quality system does not adequately ensure the accuracy and integrity of data to support the safety, effectiveness, and quality of the drugs you manufacture,” the USFDA said.

Divis on Saturday said it has responded to the USFDA inspection observations with an appropriate remediation process to overcome the deficiencies observed.

“Divi's Labs, along with external consultants and subject matter experts, are working to address the concerns of the US-FDA and is making all efforts to fully meet the compliance requirements. We will respond to this Warning Letter with a detailed plan within the stipulated time,” the company said in a statement.

In the Import Alert issued, the USFDA has exempted several products manufactured at the company's Unit-II providing a major relief to the company.

“Although we believe there is no incremental impact of this warning letter. The company will take at least two years to come out of this import alert,” said Amey Chalke, senior analyst at HDFC securities.
“The immediate focus for the company will be to ensure US FDA compliance at unit 1 which is due for the USFDA inspection this year,” Chalke added.

HDFC Securities factors more than 10 percent revenue loss and negative impact on EBITDA margins due to higher remediation cost.

Divi’s has lost around half of its market value since mid-December with the news of regulatory woes at Unit-II plant started emerging.

Shares of Divis dropped 0.39 percent to close at Rs.644.20 on BSE, while the benchmark Sensex gained 0.63 percent to end at 30,133.35 points.