Impact of FDA warning letter on sales minimal, to reply in 15 days: Indoco Remedies

Viswanath Pilla
Moneycontrol News

Indoco Remedies on Monday said it has hired an external consultant and will be responding to US FDA in the next 15 days on its warning letter for its Goa facilities.

The company in conference call with analysts said the impact of the warning letter on the revenues is minimal, as the US FDA warning letter doesn't restrict the company from shipping products to the US, though new approvals may get impacted.

The US FDA had inspected Indoco's manufacturing facilities -- Plant II and Plant III -- located in Verna Industrial Estate Area, Goa, between August 31 and September 4, 2016 and issued six observations in Form 483.
The Plant II manufactures ophthalmic and injectables, while Plant III makes tablets.

Both plant II and III contribute about 100 crore in revenues. Plant II has 18 pending ANDA approvals and Plant III has 9 pending ANDAs.

Indoco Remedies last week got a warning letter from US FDA for two of its facilities in Goa, as the drug regulator wasn't fully convinced with the drug maker's response for its earlier observations.

Indoco's announcement came after market hours.

The company said the warning letter pertains to leakages of its ophthalmic product called Latanoprost solution which the company supplies to one of its clients in the US. Latanoprost is one of the key products for the company contributing about Rs 25 crore of total sales.

Indoco had sales of 973.2 crore in FY16, of which domestic formulations constituted 54.4 percent, while export formulations contributed 39.6 percent; the rest came from active pharmaceutical ingredient and contract research segments.

Shares of Indoco Remedies dropped 11.90 percent and were trading at Rs 220.20 on BSE at 10.55 am, while the benchmark Sensex gained 0.53 percent to 29,777.73 points.

The US FDA has been issuing Form 483 observations and warning letters to Indian drug makers for failing to meet good manufacturing practice (GMP) standards laid down by it.

The agency is particularly stringent when it comes to facilities related to sterile and injectable products that require higher degree of compliance due to danger of contamination.