Billionaire Shanghvi’s Sun Pharma Tumbles After U.S. FDA Warning

23 Dec 2015 | Author: | No comments yet »

CompaniesSun Pharma shares fall 7% after FDA warning.

Shares of Sun Pharmaceuticals were in focus early Monday trade, with the stock taking a knock of over 7 percent after the company received received a warning letter from the USFDA over violation of manufacturing norms in its facility at Halol in Gujarat.Shares in Mumbai-based Sun Pharmaceuticals fell as much as 7.4 per cent on Monday after the US Food and Drug Administration warned of violations at its plant in Halol, its largest manufacturing facility.

In a release issued to BSE, Sun Pharma said, “Post the September 2014 inspection, the USFDA has withheld future product approvals from the Halol facility. Year-to-date, the stock is down 10.41%. “Sun Pharma responded to the US FDA inspection observations with a robust remediation process that is still on-going, with significant investments in automation and training to enhance its quality systems. This situation may continue until all issues are resolved. “Sun Pharma expects to request a re-inspection by USFDA upon completion of its remediation commitments,” According to a Reuters report, the fresh warning letter could mean the regulatory may ban imports from the plant under scrutiny if the problem persists for long.

Sun Pharma has been working with external consultants to ensure its remediation activities have been completed in an appropriate manner,” the company said in its statement, Mint reported. For investors, the cause of concern is that the Halol plant makes up about 15 percent of Sun Pharma’s sales in its largest market, the United States. The plant assumes significance for the company as it can manufacture injectable products, which are difficult to make and hence a niche and lucrative market for drugmakers. Most of the issues in the warning letter are the same as those in the report sent in September, Sun Pharma’s Managing Director and Indian billionaire Dilip Shanghvi, said in a conference call late on Saturday.

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