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Dr. Reddy’s API plant in Telangana gets 3 US FDA observations

LiveMint logoLiveMint 21-02-2017 Isha Trivedi

Mumbai: Dr. Reddy’s Laboratories Ltd’s active pharmaceutical ingredients (API) manufacturing plant at Miryalaguda in Telangana has received a Form-483 from the US Food and Drug Administration (FDA) with three observations relating to violation of good manufacturing practices.

The Miryalaguda plant is one of three facilities of the Hyderabad-based drug maker that were issued a warning letter in November 2015 by the FDA for breaching manufacturing norms.

“The audit of our API manufacturing plant at Miryalaguda, by the US FDA, has been completed today (February 21, 2017). We have been issued a Form-483 with three observations, which we are addressing,” the company said in a stock exchange filing.

Dr. Reddy’s did not give details on nature of the observations.

The FDA issues a Form-483 if its investigators spot any conditions that in their judgment may constitute violations of the US Food Drug and Cosmetic (FD&C) Act and related Acts.

The other two facilities that were issued a warning are an API plant at Srikakulam and an oncology formulations plant at Duvvada in Visakhapatnam. Both plants are located in Andhra Pradesh.

In a presentation at the J.P.Morgan Annual Healthcare conference in San Francisco in mid-January, Dr. Reddy’s had said that “all the commitments as part of warning letter response have been completed and the three plants will be re-inspected by the US regulator by end of March.”

After receiving the warning letter, the pharmaceutical major submitted five responses to the US drugs watchdog at regular intervals, giving updates on the remedial work undertaken at the three plants. The company also hired an independent consultant to resolve the compliance issues at these units.

“Dr. Reddy’s had undertaken remedial measures across all its manufacturing plants and if some lapses were observed at Miryalaguda plant during the re-audit, there is a possibility of similar lapses at Srikakulam plant. I don’t believe that observations should be categorized as minor or severe and one should not undermine any observation,” said Vishal Manchanda, research analyst-pharma, Nirmal Bang Securities.

However, another analyst, who did not wish to be named, said, “This development is not negative as only three observations have been made and because contribution of Miryalaguda plant to US business is not significant. The outcome of inspections at Srikakulam oncology plants will be critical.”

The warning letter had an adverse impact on the company’s earnings as new product approvals in the US from these sites were put on hold. The US market accounted for nearly half of Dr. Reddy’s total revenue of Rs15,470 crore in the year ended March 2016.

On Tuesday, shares of Dr. Reddy’s ended down 0.16% at Rs2,899.05 on the BSE, while the benchmark Sensex index was up 0.35% at 28761.59 points.

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