Cadila Healthcare’s Moraiya Plant Gets US FDA Clearance
The shares of drug maker Cadila Health Care rose upto 20% after the company announced its clearance from US Food and Drug Administration (FDA) of Guajrat’s Moraiya plant.
The US FDA had earlier issued a warning letter to the formulations facility at Moraiya for breach of good manufacturing practices.
Cadila Healthcare in a statement to stock exchanges said, “We are pleased to announce that the USFDA inspected our Moraiya facility from February 6, 2017 to February 15, 2017. At the end of the inspection, no observation (483) is issued.”
Cadila shares soared 19.9% to close at Rs429.45 on the BSE, while the benchmark Sensex index rose 0.5% to close at 28301.27 points on Thursday.
“Resolution of compliance issues at Moraiya was very critical as this plant accounted for 60-70% of the company’s sales in the US. This is a big positive. Cadila will start getting approvals for products that were stuck due to regulatory issues at Moraiya,” said an analyst citing company policy.
The Ahmedabad-based company’s Moraiya plant was issued a warning letter in December 2015; nearly a year and a half after the US regulator had issued a Form 483 or observation letter on the Moraiya unit after its inspection in July, 2014.
Cadila Healthcare consolidated net profit declined 34.6% to Rs281.6 crore in the quarter ended December from Rs430.5 crore a year ago because of lower sales, particularly in the US market. US sales fell 17.2% year-on-year to Rs886.9 crore.
In the financial year 2015-16, the company’s sales in the US were $614 million, compared with $557 million in the previous year.
Cadila Healthcare is part of the Zydus Cadila Group. The company operates in areas of active pharmaceutical ingredients (API) to formulations, and animal health products to cosmeceuticals. Over the last five decades, it has been developing and manufacturing pharmaceutical products and selling and distributing these in over 50 countries around the world.
(with inputs from Livemint)