Torrent Pharma Gets FDA Warning
Torrent Pharmaceuticals Ltd. received a warning letter from the U.S. drug regulator for its Indrad, Gujarat facility, barring new approvals from its largest unit that contributes the bulk of its sales in the American market.
The warning letter follows the August “official action indicated” by the U.S. Food and Drug Administration, according to the drugmaker’s exchange filing. The status pointed to potential regulatory and administrative action. The company is fully committed to resolving the issue at the earliest and maintaining the highest standards of compliance and quality manufacturing, Torrent said in the filing.
Torrent Pharma is the seventh Indian drugmaker to get a warning letter for its unit this year, joining Glenmark Pharmaceuticals Ltd., Lupin Ltd., Aurobindo Pharma Ltd., Indoco Remedies Ltd., Jubilant Life Sciences Ltd., and Strides Pharma Ltd. The U.S. regulator has increased scrutiny of manufacturing practices of Indian generics companies for their exports to the American market, the most significant revenue contributor for some of them. And that comes when they have been facing intense competition, forcing them to cut prices and settle for lower margins.
The Indrad facility, which contributes more than 80 percent of the U.S. revenues for Torrent Pharma, supplies finished products and active pharma ingredients. The U.S. FDA inspected the unit between April 8 and 16 and followed it with four observations. Its Dahej plant, also crucial for U.S. supplies, is already under official action indicated status. The American market contributed nearly 18.5% to the company’s revenue until June.
Torrent Pharma Gets FDA Warning- How Will It Affect the Pharma Giant?
Amey Chalke, the pharma analyst at HDFC Securities, expects the Dahej unit also to get a warning letter. Factoring that in, he sees low single-digit product approvals for Torrent over FY20-21 and U.S. revenues falling in single-digit over the previous fiscal. Margin improvement is likely to remain a challenge because of high remediation costs and an expected loss of sales.
According to CLSA torrent pharma 34 pending abbreviated new drug applications and 11 tentative approvals.
Author: Rahul Mishra