India's Wockhardt faces a tough road to travel to revive its fortunes after a spate of trouble with the U.S. FDA since 2013 that saw the closure of two plants and recent product recalls bedevil the company, India's Business Today magazine reports.
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| Wockhardt Chairman Habil Khorakiwala |
Still, Chairman Habil Khorakiwala is optimistic that the company has turned a corner after an April 28 voluntary recall of batches of about a dozen products made at the two plants prior to the FDA bans.
The FDA had banned the plants in Waluj and Chikalthana in 2013 after discovering, among other problems, that employees there had been manipulating data to indicate that batches that had failed testing had instead met specifications, then selling those in the U.S.
"The recall is to speed up addressing the FDA concerns. Revenues from these are not significant," Khorakiwala told the magazine.
But analysts say the recall blow also exposes holes in the company's business strategies and product portfolio.
"We had assumed a $100 million impact on the top line and 5% impact on EBITDA margins for 2013/14 following U.S. FDA issues regarding the Waluj plant," Emkay Global analysts Deepak Malik and Krishnanath Munde told Business Today of estimates well before the recall.
In March, the company issued a market filing that the FDA in a follow-up visit to the Chikalthana plant was impressed with its efforts "to bring about a culture change and to build a robust quality management." In that disclosure, Wockhardt said its efforts to secure its computer systems had been "verified" by the agency.
- here's the story from Business Today