Cadila gets US drug regulator’s warning over quality issues

The company says it will action but stock market not convinced

GN Bureau | December 31, 2015



Cadila Healthcare Ltd said it received a warning from US health regulators for violating manufacturing standards at two production sites in India. The letter from the US Food and Drug Administration cites issues at Cadila's plants in Moraiya drug production site and another in Ahmedabad city where it makes drug ingredients.

Strangely, the company says that there are no products in the US market which use API of Zyfine facility.

On Thursday, Cadila said in a statement that it was "committed to resolve all the issues and revamp our quality systems and processes as the top most priority."

“The company has received a warning letter issued by the US FDA relating to its Moraiya formulation facility and Ahmedabad API facility (Zyfine),” Cadila Healthcare said in a regulatory filing.

Cadila said none of its products being sold in the United States used any raw materials made at the Ahmedabad plant.

"The company said it will respond to US FDA to address the observations within the statutory time permitted in the letter. The company is working hard to ensure that the commitments made to the US FDA are fully completed. The company will continue to take all necessary steps to ensure that the US FDA is fully satisfied with our remediation of the above facilities," it added.

Despite these clarifications, its shares fell by 17%. This is its biggest single-day percentage fall.

Cadila has already gained site transfer approvals for 4 of its existing products. Also, its new SEZ formulations facility (oral Oncology, oral solids) received the Establishment Inspection Report (EIR) from the USFDA.

The warning for Moraiya comes more than a year after the FDA inspected the plant in 2014, and issued a report highlighting a series of problems. Cadila said in October its work to fix the issues was complete.

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