|Wockhardt Chairman Habil Khorakiwala|
Wockhardt Chairman Habil Khorakiwala waved away suggestions on Monday that his company intends to follow the lead of competitor Ranbaxy Laboratories and sell out because bans by the FDA have seriously devastated its profits.
The company's stock is up about 70% this year on rumors of a possible deal, Reuters reports, but Khorakiwala told the news service, "We have no intention to do a sale and we will not do it in the future."
The chairman made the declaration after the Indian drugmaker reported a 97% fall in its last quarter profits. The drugmaker pinned the financial floundering to the fact that the FDA has banned two of its plants from shipping to the U.S., its largest market before the bans.
The company reported that its profit in its second quarter ended September 30 was 36.3 million rupees ($591,446) on net sales of 9.48 billion rupees ($154.4 million). That compared with a profit of 1.39 billion rupees, or $22.6 million, in the same quarter a year ago, Reuters reports.
Last year, the FDA banned two of Wockhardt's manufacturing facilities in India, saying both had been manipulating testing data and passing for sale drugs that were not up to specs. In May, the agency found similar issues with its Morton Grove Pharmaceuticals operation in Chicago, a facility that has produced more than half of Wockhardt's sales in the United States.
The drugmaker says it has made improvements at its Indian plants and is awaiting FDA reinspections. "We informed the FDA a few days ago that we are ready for an inspection any time," Khorakiwala told Reuters. But he said that you can't hurry the U.S. regulator, so reinspections are unlikely to happen until sometime next year. He said the company has also responded to FDA concerns over its operations at Morton Grove and is awaiting an FDA response.
The FDA has cited a number of India's top producers with warning letters and import alerts after uncovering significant quality problems. Ranbaxy Laboratories has had four Indian manufacturing plants banned by the FDA, including two in the last 18 months. Earlier this year, Daiichi Sankyo, which owns controlling interest in Ranbaxy, decided it had had enough of the years of regulatory problems at the generics maker. It agreed to sell the company to India's Sun Pharmaceutical in a $3.2 billion all-stock deal, which is slated to close by year's end.