India's Sun Pharmaceutical Industries got knocked again by the U.S. Food and Drug Administration over its plant in Halol in western India. The FDA sent another warning letter to highlight quality problems at the plant.
The country's largest drugmaker by sales said Saturday that inspectors last year warned Sun over its test data and how workers were handling quality control issues affecting sterile production.
The company said its plant was still producing drugs for export, adding that it was working to fix the problems and to automate more of its production process, according to a report in the Wall Street Journal. The company has also moved production of some drugs to other plants to ensure it can continue to export to the United States.
As FiercePharmaAsia reported in November, Sun is trying to fix problems at its facilities and the company is trying to raise as much as $437 million in bank financing to repair its plants.
The company said it was involved in a "massive remedial process" at its plants to try to address the issues raised repeatedly by the FDA and other agencies.
As a result of the warning letter, Sun's shares dropped 7% in trading in India on Monday and the shares are down more than 10% for the year, Reuters reported. The latest letter means the U.S. could ban imports from the Halol plant and that could put a big dent in Sun's exports to the U.S., according to the report.
Reuters also noted that Morgan Stanley analysts have cut their expectations for 2017 and 2018 earnings per share with the view that U.S. sales growth will slow because Sun will be delayed in getting approvals to launch products made at the plant.
Analysts at brokerage Korak said they were recommending that investors sell the stock because they expect the FDA to perform another inspection, but not until 2017.
- here's the story from the WSJ (sub. req.)
- and one from Reuters