Sun Pharma gets clouded by FDA again

The US FDA had announced its observations of Sun Pharma’s Halol plant on 8th December but the effects of that continue to be felt even today. The stock remains amongst the top losers on the BSE, down 2% at Rs.665 levels.

The FDA has made nine observations relating to violations of good manufacturing practices in its Form 483 issued to Halol plant following the inspection. FDA did not spell out the exact reasons for the observations but had to do with lapses in testing methods, quality control processes and other standard operating procedures.

A Form 483 is issued after an inspection when the investigators see that there is violation of the US Food Drug and Cosmetic (FD&C) Act and related Acts.

Inaccuracy of testing methods, lack of appropriate controls, drugs not bearing expiry dates – all are procedural issues and this is usually more serious in nature. It could take at least six months for Sun Pharma to resolve this issue.

Sun is already bearing the brunt of earlier similar observations from FDA, again for its Halol plant; it had issued a Form 483 in Sept’15, citing 23 observations. This impacted Sun’s FY16 sales in USA, which had showed a 8% decline.