 "Cadila Healthcare slumps on receiving warning letter from USFDA")
Shares of Cadila Healthcare have tanked 17% to Rs 320 on the National Stock Exchange (NSE) in early morning trade after the pharmaceutical company received a warning letter from the US Food and Drug Administration (USFDA) relating to its Moraiya formulation facility and Ahmedabad API facility.
“The company has received a warning letter issued by the US FDA relating to its Moraiya formulation facility and Ahmedabad API facility (Zyfine),” Cadila Healthcare said in a regulatory filing.
"The company said it will respond to US FDA to address the observations within the statutory time permitted in the letter. The company is working hard to ensure that the commitments made to the US FDA are fully completed. The company will continue to take all necessary steps to ensure that the US FDA is fully satisfied with our remediation of the above facilities," it added.
“The company has received a warning letter issued by the US FDA relating to its Moraiya formulation facility and Ahmedabad API facility (Zyfine),” Cadila Healthcare said in a regulatory filing.
"The company said it will respond to US FDA to address the observations within the statutory time permitted in the letter. The company is working hard to ensure that the commitments made to the US FDA are fully completed. The company will continue to take all necessary steps to ensure that the US FDA is fully satisfied with our remediation of the above facilities," it added.
Cadila has, however, clarified that there are no products in the US market which use API of Zyfine facility.
“While it’s too early to ascertain the impact on the numbers, as we also await more clarity on the same. Also, the company has mentioned, that it will respond to USFDA to address the observations within the statutory time permitted in the letter. Also, it’s committed to resolve all the issues and revamp our quality systems and processes and that there are no products in the US market which use API of Zyfine facility,” says Sarabjit Kour Nangra, VP Research- Pharma, Angel Broking.
"On valuations front, the company is currently trading at 22xFY2017E earnings, thus leaving little for comfort. In our assessment, after the correction, even in the best case scenario, the company has upsides of only 7-8%", she adds.
During the 2QFY2016, the company had mentioned that, it has initiated site transfer of key filings namely Asacol HD, Toprol XL and Prevacid OTD and expects it to be done over the next 6-9 months, the broking firm said in a client note.
Cadila has already gained site transfer approvals for 4 of its existing products. Also, its new SEZ formulations facility (oral Oncology, oral solids) received the Establishment Inspection Report (EIR) from the USFDA. The company has undertaken 40+ filings over the past 3-4 years from this facility paving the way for monetizing its large ANDA pipeline. Additionally the company is also hopeful of commissioning its new sterile injectable facility located in Baroda by July 2016, added note.
At 12:56 p.m. the stock was down 15% at Rs 328 on the NSE. The trading volume on the counter jumped multiple-fold with a combined 22.49 million shares representing 11% of total equity have changed hands on the NSE and BSE so far.