Wockhardt has closed its manufacturing facility at Illinois in the United States, to cut down on costs after entering into a consent order with the US Department of Justice, as per a regulatory filing submitted by the pharmaceutical major on August 20.
Since the manufacturing site was under observations and warning letters from the US Food and Drug Administration (USFDA), the company has "entered into a consent decree with DoJ (Department of Justice) which resolves and settles all matters with the USFDA, whereby the company shall stop all manufacturing activities at the plant for the present", Wockhardt informed the stock exchanges.
"There is no financial compensation in the consent decree," it added.
The closure of the Illinois-based manufacturing facility will not affect the availability of products in the US market, Wockhardt clarified.
The company noted that it has engaged with multiple USFDA-approved manufacturers for making products for the North American market. The products will be sold "under the same brand and Wockhardt name", it said.
"This new arrangement is in the best interest of the company as this will help the company to avoid the manufacturing and quality management cost completely resulting in significant savings in operating and overhead cost while allowing the management to completely focus on penetrating and expansion of the market share of its products in US/North America," Wockhardt added.
The announcement comes a week after Wockhardt reported a net loss of Rs 75 crore in Q1 FY23, as compared to a loss of Rs 7 crore reported in the year-ago period. Consolidated revenue from operations dropped to Rs 595 crore as against Rs 860 crore last year, largely due to the decline in the key markets of the US and the UK.
The US business yielded a revenue of Rs 74 crore, down from Rs 102 crore in the same quarter last year. The revenue from Wockhardt's UK business dropped from Rs 407 crore in the year-ago period to Rs 196 crore in the first quarter of current fiscal.
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