SMS Pharma said there is no material impact on its current and future revenues or margins as revenue contributed from Ranitidine product in previous years is below 1% of total revenue.
SMS Pharmaceuticals on 9 April 2020 issued updates against US drug regulator's statement in connection with Ranitidine. In September 2019, the US Food and Drug Administration (USFDA) observed that some Ranitidine medicines contain a nitrosamine impurity called N-nitrosodimethylamine (NDMA) at low levels. USFDA has requested Ranitidine formulation manufacturers to withdraw all prescription and over-the-counter (OTC) ranitidine drugs from the market immediately as part of an ongoing investigation of a contaminant NDMA in Ranitidine medications.SMS Pharma is one of the manufacturer of Ranitidine HCI Active Pharmaceuticals Ingredient (API). The company said it has performed the detailed risk assessment study for the formation of NDMA impurity in the Ranitidine HCl drug substance. It is observed that, the NDMA impurity is increasing in the storage of the drug substance. The company has modified the process of Ranitidine HCl drug substance to control the NDMA impurity during the storage and the modified process details has been submitted to the FDA. The modified process material is more stable and the NDMA impurity is well controlled, the company said.
As per the normal process of GMP guidelines, the USFDA has conducted CGMP inspection in the company's API manufacturing facility during January 2020 and subsequently it received the EIR report. The validation batches of modified process have been already initiated for the required stability studies and the stability data shall be updated to the authority as required. The activity would take about 9 to 10 months period.
SMS Pharma said that till date, it has not sold any Ranitidine API for the commercial distribution in the US. Whatever the quantities sold are for the purpose of drug product development and the product has not entered into commercials till date in the US market. The share of SMS Pharmaceuticals' revenue contributed from Ranitidine product during the last couple of year is below 1% of the total revenues. Hence, there is no material impact on the company's current and future revenues as well as margins.
The company's commercial supplies of the Ranitidine HCl drug substance to its customers for US market is currently delayed by 9-10 months and expected to start by end the current calendar year. In the mean time, the firm will utilize these capacities to other existing products. Hence, there is no impact on operations or revenues during the current financial year as well as future years.
SMS Pharmaceuticals' consolidated net profit dropped 19.11% to Rs 7.62 crore on a 20.54% decline in net sales to Rs 80.45 crore in Q3 December 2019 over Q3 December 2018.
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SMS Pharmaceuticals is engaged in the manufacturing and sale of active pharmaceutical ingredients (APIs) and their intermediates. The firm's principal products/services include pharmaceuticals. The company's product range includes API and intermediates.
Shares of SMS Pharmaceuticals declined 1.59% to Rs 34.15 on Thursday, 9 April 2020. The market was shut on Friday, 10 April 2020, for a public holiday.
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