Dilapidated buildings with blighted windows connected by flaking pipes and capped by a rusty roof – that's the picture the team of inspectors from the US Food and Drug Administration (FDA) to Wockhardt's Chikalthana plant near Aurangabad in July has drawn of the facility.
And as if that wasn't unhygienic enough for a facility that produces generic copies of the heart tablet Toprol XL, the team saw urine spilling over open drains, soiled uniforms and mold growing in a raw-material storage, according to a filing of the summarised findings obtained by Bloomberg via a Freedom of Information Act request.
The FDA Form 483 had listed 16 so-called observations about Wockhardt's factory in Chikalthana, including concerns about quality control – generally termed as violation of current good manufacturing practices (CGMP).
dna had first reported about the development on August 15, wherein the Wockhardt top management had (in an analyst call) said some observations raised by the US FDA and UK MHRA were more serious, while others were minor in nature.
However, if the filing is any indication, the company appears to have made no serious attempt to ensure complete hygiene and safety in the drug manufacturing process.
This shocked the market, especially because Wockhardt's plant at Waluj, Aurangabad, was already issued Form 483 followed by an import alert from the US FDA.
"Considering Chikalthana unit contributes around 40% to the company's overall profit, the Wockhardt management was expected to be extra careful on following regulatory compliances with this unit. Surprisingly, that was not the case. It very well indicates that there could be significant lapses elsewhere (other Wockhardt facilities) as well," said an analyst, requesting not to be identified.
For fiscal 2013, the Chikalthana facility (catering to US and UK markets) contributed $230 million to the company's sales. This facility manufactures modified niche product including Toprol XL and Lamictal XL, among others.
The US FDA had advised Wockhardt to work with consultants on resolving the CGMP issues, conducting a detailed review of its site and oversee implementation of an action plan to meet FDA compliance.
In an earlier interaction with dna, Habil Khorakiwala, founder chairman and group CEO, Wockhardt Group had said that expert consultants from the US have been brought on board to advise the company in dealing with issues raised by the foreign regulators.
"We have adequate consultants for all the aspects of the work and we have been responding to letters received. We are also seeking a meeting with the FDA and MHRA. Our approach is to get the clearances for both (Waluj and Chikalthana) the facilities at the earliest possible," he had said then.
However, the analyst community isn't buying the company's statement.
"Ranbaxy has been complying with FDA norms for long, but look what happened to their Indian facilities. The Ranbaxy management has been harping about strict quality controls and now all their Indian units are under the FDA scanner. Taking cognisance of this, it is very likely the FDA will take stern action against Wockhardt management for their laid-back attitude," said an analyst.
Having responded to the FDA and MHRA concerns, the Wockhardt management is now awaiting a response from the regulatory bodies.
Arvind Bothra, vice president - institutional research, Religare Capital Markets, said, "I would await clarity on the nature of lapses and 483s. Until then, the overhang will remain.
Meanwhile, sustained marketshare in Toprol will help somewhat protect the base profitability, though new launches could be constrained."
Meanwhile, the promoters have got busy putting together various short-term confidence-building measures including releasing of shares earlier pledged and increasing stake in the company that saw the Wockhardt stock jump to Rs 673 a piece on September 11, 2013.
However, the stock has since been on a falling streak and was trading at Rs 549.85 apiece on Friday, 5% (lower circuit) below the previous day's close.
Analysts feel the stock ranks low on the risk-reward scale.
"If Chikalthana comes clear and the company is able to shift production there could be a huge upside as the actual worth of the stock is around Rs 1,200. On the flip side, it could go below Rs 300," said another analyst. (With inputs from Bloomberg)
via Business - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEIEgkHUO3csg0fdrcPaszndpuTzw&url=http://www.dnaindia.com/money/1895002/report-fda-team-raises-a-stink-on-wockhardt-s-chikalthana-plant
Put the internet to work for you.
0 comments:
Post a Comment