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Shares of Pharmaceutical major Wockhardt Ltd dip by over 16% today, on the back of a warning notice received by Food and Drug Administration (FDA) few days ago. This indicates that the investors are unsure about their decision now to stay invested in the company.
In addition, Macquarie has cut Wockhardt's target price from Rs. 1,440 to Rs. 750 earlier.
The warning notice sent by the FDA to Wockhardt on July 18 mentions about the violations done by the firm in its manufacturing practices. The regulator has disclosed few observations and has warned that until all corrections made by them get approved by FDA, they may withhold approval of any new application or supplement listing the firm as drug product manufacturer.
FDA has accused the firm of violating current good manufacturing practice (CGMP) regulations for finished pharmaceuticals,and documented that the firm withheld truthful information, delayed and limited their inspection. This violations cause the drug products to be
adulterated within the meaning of Section 501(a)(2)(B) and 501(j) of the Federal Food, Drug, and Cosmetic Act (the Act), 21 U.S.C.
The methods, facilities and controls used for their manufacture, processing, packing, or holding are not operated or administered in conformity with, CGMP. The firm also lacks the ability of taking sufficient corrective actions.
According to FDA, Wockhardt didn't give them access to the raw data needed by them. Some data records had either been removed, destroyed or hidden by Wockhardt. The firm has also failed to prepare batch production and control records for each batch of drug product that include documentation of the accomplishment of each significant step in the manufacture, processing and packing.
In addition, FDA claims that the firm failed to ensure that each person engaged in the manufacture, processing, packing, or holding of a drug product has the education, training, and experience so that the person can perform his or her assigned functions.
Hence, until all corrections have been completed and FDA has confirmed corrections of the violations and the firm's compliance with CGMP,
FDA may withhold approval of any new applications or supplements listing Wockhardt as a drug product manufacturer. In addition, if the firm fails to correct these violations, it may result in FDA continuing to refuse admission of articles manufactured at Wockhardt's Aurangabad plant.
The firm is expected to respond to this letter within fifteen working days and has to give in writing the specific steps they will take to correct and prevent the recurrence of violations, and provide copies of supporting documentation. If it fails to do so within fifteen working days, the company has to state the reason for its delay and the date by which they will complete the corrections.
