Mumbai, Sept. 27: Shares of Wockhardt Ltd today hit the lower circuit on the stock exchanges following media reports that another plant of the company had come under the scanner of the US Food and Drug Administration (USFDA).
On the BSE, the Wockhardt scrip fell nearly 5 per cent, or Rs 28.90, to Rs 549.85 amid reports that the US regulator had issued a Form 483 accompanied with some harsh observations about its Chikalthana plant in Maharashtra.
An FDA Form 483 is issued to a company’s management at the conclusion of an inspection when investigators have observed any conditions, which according to them may constitute violations of the US Food Drug and Cosmetic (FD&C) Act and related acts. The investigator makes observations if he finds that practices observed at a unit will lead to the adulteration of any food or drug.
According to a Bloomberg report, when the US FDA inspectors visited the plant they found urine spilling over open drains, soiled uniforms and mould growing in a raw-material storage area. This prompted the US regulator to list 16 observations in its Form 483 that was later given to the company management.
Wockhardt will now have to inform the US regulator of the steps it has taken to deal with the negative observations made by the investigators. If it is unable to satisfy the US regulator, it can lead to the issue of a warning letter.
Analysts say the Chikalthana plant is crucial for Wockhardt as it makes the generic version of Toporol XL, a cardiac drug in which it has a market share of a little more than 25 per cent. Observers added that the unit contributed to sales of more than $200 million for the company.
For Wockhardt, this is the second plant that is coming under the USFDA’s scrutiny. In July, the company received a warning letter from the regulator relating to its Waluj plant for not meeting manufacturing norms. In May, the USFDA had issued an import alert against the facility that makes injectables and solid dosages.
The Habil Khorakiwala- headed company had hogged limelight last year after staging a sharp turnaround. However, the regulatory developments this year triggered a 75 per cent slide in the stock after it hit a 52-week high in March.
Other drug makers are also facing the brunt of scrutiny by the US regulator. Recently, Strides Arcolab’s injectable manufacturing arm, Agila Specialities, received a warning letter from the USFDA for violation of manufacturing norms at its Bangalore facility. Likewise, the regulator slapped an import alert against the Mohali unit of Ranbaxy Laboratories.