Moneycontrol Bureau
Successful Goa plant inspection by MHRA is a major positive for Marksans Pharma as it should enable the company to turnaround its key UK business, IDFC Securities says while retaining outperform rating on the stock. The share price rallied 7.6 percent intraday Tuesday (in addition to 20 percent upside in previous session).
Along with the expected pick-up in UK sales in the coming quarters, the company’s ability to stay compliant with the USFDA norms and to keep increasing client penetration in the US as also securing new softgel ANDA approvals will be key to its recovery, the brokerage house feels.
Marksans Pharma, on February 20, announced that it has successfully completed UK MHRA inspection for its Goa facility without any critical observations. The company is now awaiting further instruction from the agency on the way forward.
UK Medicines and Healthcare products Regulatory Agency inspected the facility during February 14-17, 2017.
Background
Earlier, Marksans' Goa plant was inspected by the UK MHRA in November 2015 and was issued certain observations with respect to certain data management practices. Subsequently, in March 2016, the facility was issued a restricted GMP (good manufacturing practice) certificate by the regulator wherein it continued to supply the critical products (corresponding to 80 percent of its current portfolio). However, the regulator had stopped granting approvals for any new products.
Over the last few quarters, as part of its remediation measures, the company had significantly invested in automating its data management processes and reducing the manual intervention from its processes. Implementation of these remediation measures had a negative impact on supplies from this facility, the brokerage house says.
Due to a combination of reduced supplies from Goa as also accelerated price erosion in the UK, Marksans' UK sales have declined sharply from around Rs 500 crore in FY15 (around 60 percent of sales) to around Rs 290 crore in FY17, IDFC says.
Upon receipt of the full GMP certification, the research firm believes Marksans should begin to get approval for its new products in the UK market as also resume normal supplies for its existing portfolio.
US FDA inspection
The Goa facility was last inspected by the US Food & Drug Administration in August 2015 and the inspection was completed without any Form 483s. The company had received the EIR (establishment inspection report) in November 2015. It has subsequently received final approvals for 3 ANDAs.
The Goa facility had recently successfully completed the TGA, Australia inspection, too.
At 11:19 hours IST, the stock was quoting at Rs 51.00, up Rs 2.30, or 4.72 percent amid high volumes on the BSE.Posted by Sunil Shankar Matkar
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