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| Cadila's Moraiya dosage plant--Courtesy of Cadila Healthcare |
Given the publicity that has come with FDA bans on a growing list of Indian facilities, even a report of an FDA shortfall at a plant can have consequences these days. That is where India's Cadila Healthcare found itself Thursday when news that it received an FDA Form 483 took a big bite out of its market cap.
The company acknowledged to Reuters that it had received the Form 483 after a "product specific" inspection of its Moraiya manufacturing plant for which it is seeking approval to make an unspecified new product.
"This was a product specific review and the inspection was limited to the review of documents for filed ANDA before its approval and the observations are being responded to," a Cadila spokeswoman told the news service in a statement. She pointed out that Cadila had not received any observations on the standard manufacturing practices at the Moraiya plant and said that the observation for the new product would have no impact on its business.
The report of the FDA action, however, did have an impact. Given that Indian drugmakers like Ranbaxy Laboratories and Wockhardt have seen their sales hit hard by FDA plant bans, markets are sensitive to any hint of manufacturing problems at India's drugmakers. The news of the FDA action pushed shares of Cadila down more than 10% before they closed down 4.5%, Reuters reported. The company is among India's top 10 drugmakers.
The impact that an FDA ban can have on a company's finances was evident when Ranbaxy released its earnings this week and reported a $31 million loss for the quarter, on an 8% reduction in sales in the U.S. It also set aside about $40 million to cover "ongoing settlement discussions," according to Reuters.
And it is not as if Cadila has not had some manufacturing faults. In May its Zydus Cadila unit recalled 10,200 bottles of its allergy drug promethazine hydrochloride after a high blood pressure medication was discovered in one of them.
- read the Reuters story