Wockhardt profits crater after U.S., U.K. plant bans

The FDA banned products at Wockhardt's Waluj plant in May after inspectors discovered workers trying to hide significant problems with manufacturing and test data. The Indian drugmaker said at the time the import alert could cost it $100 million in lost revenues and is now starting to feel that squeeze.

In the first full quarter since the FDA took its action, the Indian drugmaker reported a 70% drop in year-over-year pre-tax profits. Its revenues were off 11% for the quarter, falling to 1,197 crore ($194.9 million). It said that U.S. sales were off 19% but still made up 44% ($85.7 million) of the total for the quarter.

Managing Director of Wockhardt Murtaza Khorakiwala acknowledged that "the current performance has been impacted due to the recent regulatory actions, however, Team Wockhardt is committed to raise the bar across all functions and revert with better performance in all areas of operations at the earliest."

According to Reuters, in a conference call with analysts Khorakiwala estimated it would take 6 months to address plant problems and perhaps a year before regulators would sign off on upgrades, but he acknowledged it was hard to tell. "So probably the entire process would take upwards of a year from now. It could be earlier than that, it could take longer than that. The situation is very uncertain," Khorakiwala said.

Part of the issue is that many of Wockhardt's problems extend beyond the FDA ban on the Waluj plant. European regulators have imposed restrictions on three Wockhardt plants in four months, including Waluj. The Medicines and Healthcare Products Regulatory Agency (MHRA) about a week ago yanked the good manufacturing certificate for a plant in Kadaiya, Nani Daman, allowing it only to make some drugs that otherwise would be in short supply in Europe. That plant does not make products for the U.S. The action by the MHRA came after the regulator this month also banned most products from a Wockhardt plant in Chikalthana. It previously put a ban in place against the Waluj facility.

Khorakiwala told analysts the company is expanding capacity at some of its other Indian plants to try to soften the financial blow in its two largest markets. He admitted that will do little any time soon, because the company would still have to get regulators to sign off before it could ship drugs to the U.S. or Europe from those facilities.

- here's the release (PDF)
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