Ipca Laboratories Ltd said on Thursday it has voluntarily suspended shipments to the United States from one of its drug ingredient manufacturing plants after the US Food and Drug Administration (FDA) expressed concerns regarding the unit.
Ipca, a mid-sized generic drugs and ingredients maker, said the FDA issued a so-called "Form 483", a letter in which the agency typically outlines violations of its guidelines observed during inspections of manufacturing plants. Ipca did not give details about the contents of the Form 483 that it had received.
Over the past year, large Indian drugmakers such as Ranbaxy Laboratories Ltd and Wockhardt Ltd have been hit by a spate of regulatory sanctions due to concerns about production processes at their local plants. The sanctions have hurt India's reputation as a supplier of safe, affordable drugs.
The shipment halt from Ipca's Ratlam plant in Madhya Pradesh will also impact its US drug exports from its Silvassa and Indore plants in the country, where it makes drugs using ingredients from the Ratlam plant, Ipca said in a statement.
Under the FDA rules, drugmakers get a chance to respond to the observations made in a Form 483. If the regulator is not satisfied with the response it can impose a ban on imports from the plant. Ipca did not say in the statement if it had had contact with the FDA since the Form 483 was issued.
The company said it is "fully committed in resolving this issue at the earliest," and will resume shipments only after it has addressed all FDA concerns.
The halt could impact Ipca's revenue by up to 10 per cent, depending on how long the company takes to resolve the issue, some brokerage analysts said.
Ipca exports to various global markets including the United States, Canada, Europe and Australia. Exports made up about 63 percent of the company's sales in the financial year ended on March 31, according to information on its website.
Shares of Ipca, which has a market capitalisation of about $1.8 billion, fell as much as 10 per cent after the announcement. They were trading down 10.7 per cent at Rs 748 as of 1:55 p.m., while the Nifty Mumbai market index was down 0.08 per cent.
The US sanctions have cut the pace of India's drug exports. Drug exports grew 2.6 per cent in the 2013/14 fiscal year ended in March. Two years ago, the rate was 23 per cent.
India, home to a large number of generic drugmakers, is second only to Canada as a drug exporter to the United States, where it supplies about 40 per cent of generic and over-the-counter drugs.
Copyright: Thomson Reuters 2014