Sun Pharma shares plunge on USFDA warning letter to its Halol plant

Shares of Sun Pharmaceuticals were in focus early Monday trade, with the stock taking a knock of over 7 percent after the company received received a warning letter from the USFDA over violation of manufacturing norms in its facility at Halol in Gujarat. [caption id=“attachment_2553552” align=“alignleft” width=“380”]  Reuters[/caption] At 11.45 am, shares of Sun Pharmaceuticals were trading at 745.50, down 5.7 percent from previous close. Over 1.4 lakh shares changed hands on BSE so far. From its 52-week high of Rs 1,200.70 touched in early April this year, Sun Pharma stock has taken a plunge of 38 percent since then. The fresh warning letter to the company issued on Saturday comes after the facility was first inspected by the US drug regulator in September 2014. In a release issued to BSE, Sun Pharma said, “Post the September 2014 inspection, the USFDA has withheld future product approvals from the Halol facility. This situation may continue until all issues are resolved. “Sun Pharma expects to request a re-inspection by USFDA upon completion of its remediation commitments,” According to a Reuters report, the fresh warning letter could mean the regulatory may ban imports from the plant under scrutiny if the problem persists for long. For investors, the cause of concern is that the Halol plant makes up about 15 percent of Sun Pharma’s sales in its largest market, the United States. The plant assumes significance for the company as it can manufacture injectable products, which are difficult to make and hence a niche and lucrative market for drugmakers. The company is already grappling with US import bans on five of its other manufacturing facilities in India. Since last September, Sun Pharma has not received any US approvals to launch new drugs made at Halol. Most of the issues in the warning letter are the same as those in the report sent in September, Sun Pharma’s Managing Director and Indian billionaire Dilip Shanghvi, said in a conference call late on Saturday. When asked about the impact of the warning letter on the Halol plant, he did not elaborate but said sales from the plant contributed to the total a “high single digit percentage number on consolidated basis”. He further said export from the plant to other countries will not be affected as “we remain in compliance for all the countries we are exporting to”. With inputs from agencies