Dr. Reddy’s oncology drug plant escapes cloud of FDA warning letter

Just days after bad news about manufacturing wreaked havoc with Dr. Reddy’s shares, the drugmaker was able to report something positive.

In a filing Saturday with the Bombay Stock Exchange, India's second-largest drugmaker said (PDF) that the agency had notified it that the steps it has taken to improve operations at its oncology formulations plant in Duvvada, India, have finally satisfied the agency.

“Based on our responses and follow-up actions, the U.S. FDA has concluded that this inspection is 'closed' and, has determined the inspection classification of this facility as Voluntary Action Initiated (VAI),” Dr. Reddy’s reported.

The Duvvada facility was one of three plants named in a sweeping FDA warning letter more than three years ago. Follow-up inspections in 2017 and again last October again noted problems. Issues at Duvvada included practices that raised the potential for contamination. Dr. Reddy’s has pending ANDAs for generic cancer drugs to be produced at the plant but has been prevented by the FDA citation from launching any of them. The status change should allow it get some new products to market.

RELATED: Dr. Reddy's racks up more repeat violations at Bachupally formulations plant

The news came just days after reports about a Form 483 issued to Dr. Reddy's formulations plant in Bachupally, spooked investors. Shares plunged as much as 23%—a 17-year low—before they recovered down just 4%, according to India media. A report from a Jefferies analyst who had seen the report said four of 11 observations at the Bachupally plant were repeats and that fixes will probably take time.