No USFDA import alert on Sun's Halol plant, shares up 6%

The unit accounts for about 40% of Sun's US sales and 25% of consolidated profit of the company

Sun Pharmaceuticals, the largest Indian drug maker, received a Form 483, following the USFDA audit on its Halol plant in Gujarat, an analyst note from Credit Suisse said.

As per Form 483, FDA will seek corrective action from the company while it will not issue an import ban. The Halol unit in Gujarat accounts for about 40% of Sun's US sales and 25% of consolidated profit of the company. The US market accounts for 60 per cent of the company's total sales.

Following the reports, Sun Pharma shares went up by 6% intraday at Rs 821 on BSE. Shares closed at Rs 807.10, up by 4.30%.

"There are no data integrity issues on the form, therefore, the chances of an import alert are low. However, there are several procedural issues where resolution could take time and until then, approvals could be blocked possibly," the note said.

Sun's Karkhadi unit in Gujarat is already under FDA radar after it received an import alert in May. Investigators had identified violations of current good manufacturing practice and regulations for finished pharmaceuticals. Halol plant, one of the major facilities of Sun Pharma supplying to the US market, was last inspected in September 2012.

According to the note from Credit Suisse, there were 23 observations with 10 for the injectable unit, four for the oral solid unit and the rest for the quality control lab.

"Based on past inspections, the FDA typically takes 2-3 months to resolve 483s. The current inspection concluded on September 19, 2014, and the next step is for Sun is to reply to the FDA on its proposed corrective action plan within 15 days," the note said.

A Sun Pharma spokesperson refused to comment on the matter.

Earlier, Sun Pharma recalled three important medicines from the US market, which were made at Halol plant. It recalled 40,000 bottles of Venlafaxine Hydrochloride extended-release tablets after it failed dissolution test. The company also recalled Gemcitabine for manufacturing issue (lack of sterility assurance) and Metformin for packaging problems (Gabapentin tabs found in Metformin bottles).