Wockhardt said on Tuesday its Mount Grove facility located in Illinois state in the US was inspected by the US Food and Drug Administration in early 2014, after which the regulator identified certain process and manufacturing standards-related deficiencies in the production unit.
Wockhardt MD Murtaza Khorakiwala said the facility, which is the company’s sole manufacturing unit in the US, was inspected for two months starting in January 2014. At the conclusion of the audit, the regulator issued Form 483 ? a document which lists the problems identified during an inspection. He declined to specify details on the observations but added that there was ?nothing significant?.
The Mount Grove facility contributes to over 50% of the Mumbai-based company’s US sales. The company’s US business contributes more than 45% or R2,173.5 crore to its FY14 topline.
Khorakiwala said during a post-earnings conference call on Tuesday that the company had 17 regulatory inspections in Q4FY14. ?On an annualised basis, we have had 35 inspections ? 29 had no major observations, the status quo has been maintained for two sites and four inspections have seen critical or major observations,? he added.
The firm had hired a third-party consultant to assist in resolving its manufacturing practice-related issues. It incurred consultancy-related cost of R23 crore in FY14 and additional cost of R14 crore as legal expenses.
Wockhardt has been caught in the crosshairs of the USFDA since early 2013, with two of its facilities, Waluj and Chikalthana in Maharashtra, placed under an import alert which prevents products manufactured in the units from entering the US.
The Medicines and Healthcare products Regulatory Agency, UK, (UKMHRA) pulled the good manufacturing practices certificate given to the Chikalthana and Kadaiya units, allowing only certain drugs manufactured there to be shipped.
Khorakiwala said that while the Chikalthana unit did not receive a follow-up inspection by the USFDA, the UK regulatory authority checked the facility earlier in the year. ?The observation was that the company has moved forward and (the UKMHRA) are seeing signs of improvement in various areas. However, they decided to maintain status quo,? he added. ?So we have a restricted certificate whe-re 10 products for the UK market are manufactured at Chika-lthana. For the rest, withdrawal of licence is valid,? he said.
According to Khorakiwala, the company has revamped the entire leadership responsible for overseeing manufacturing and quality functions. Adoption of a new software which prevents tampering as well as a revised training procedure are the steps taken to address the issues identified by the watchdogs.
The company, which reported Q4FY14 results on Monday, reported another dismal quarter as the regulatory bans ate into its profits. Sales for the quarter ended March 31 fell 30% y-o-y to R1,038.7 crore while net profit plunged nearly 78%.
