Alembic Pharma targets 10-12 product filings from Karkhadi facility

Vadodara based drug maker Alembic Pharmaceuticals is now running exhibit batches at its Karkhadi facility (F3) to keep the plant alive and humming, while it awaits a final go-ahead from the US drug regulator.

“This way, once the plant is cleared by the US Food and Drug Administration (USFDA) we will be able to file applications for double the number of products than we would have usually. Typically, we would have been able to do four to six filings in a year from the Karkhadi plant, but as we are keeping the plant alive and humming with exhibit batches, we would now be able to do 10-12 filings in a year or so,” explained RK Baheti, Director-Finance & CFO, Alembic Pharmaceuticals.

Resolution of the observations made by the USFDA (for which Alembic has already responded to the regulator) is critical for Alembic’s US business. Analysts expect a resolution may happen within the next two months.

Bhavesh Gandhi, lead analyst, Yes Securities said, “Kharkhadi plant responses have been made to FDA and should get more clarity in next two months.”

While Baheti did not wish to give a timeline, he added that Alembic is expecting the resolution for the Karkhadi plant by mid FY23. “We have lost six to 12 months of critical time in terms of business. Ideally, the plant should have started by mid of FY22, but now it is expected around mid FY23,” he added.

About 40 per cent of Alembic’s US product pipeline comprises general injectables, oncology oral solids and oncology injectables. “In general oral solids, there are hardly any new opportunities now and the product filings will continue to go down. Oncology and injectables filings, on the other hand, will rise, and would gradually constitute around 50 percent of our product pipeline,” Baheti explained.

As far as Alembic’s Panelav site is concerned, the two active pharmaceutical ingredient (API) facilities there have been inspected by the USFDA and are compliant. The F2 plant at Panelav, which is dedicated to oncology, has two verticals – oral solids and injectables. The oncology oral solids facility is approved by the USFDA, while the injectables plant has not yet been visited by the FDA. Alembic is awaiting an FDA inspection for F2 oncology injectables facility.

Shaunak Amin, MD, Alembic Pharma, said that the bulk of Alembic’s US business comes from the oral solids plant, which is approved by the FDA.

Analysts like Gandhi, however, have trimmed US revenue forecasts with Panelav’s injectable commissioning pushed back. “With Panelav commissioning pushed out to probably FY24, we trim US revenues and costs that would hit P&L leading to 14% cut to FY24 estimate,” Gandhi said in a recent note. He added that the F3 facility (Karkhadi) should see start of expensing in FY23 and F2 (Panelav) commercialization should be after F3, and larger part of costs linked to F3 facility.

Alembic has lined up a few first-to-file (FTF) opportunities in the US over the next few months. Some of these products can expect competition from other companies over the next few months. However, around 20 percent of Alembic’s oncology pipeline comprises FTFs.