USFDA raises queries on Wockhardt’s US plant

After a two-month-long inspection, drugmaker Wockhardt has received a regulatory observation from the United States Food and Drug Administration (USFDA) on the company’s Morton Grove facility in the US.

Speaking to analysts, Wockhardt MD Murtaza Khorakiwala said the plant was inspected by the USFDA in January, for two months, following which it received a ‘483’ observation to which the company has responded. The observations related to process and manufacturing practices, he added.

The observations on the Morton Grove unit come at a time when Wockhardt is grappling with import bans on two of its Indian plants. The plants, at Waluj and Chikalthana in Maharashtra, have been banned from sending products to the US. The two plants and another at Nani Daman are also under the scrutiny of the British regulator.

The inspection at the Morton Grove plant took an unusually a long time, Khorakiwala said, adding that there were many observations. They did not seem to be of a very negative nature, he added, responding to analyst queries. The plant accounts for more than half of Wockhardt’s US revenues.

A regulatory observation made on a 483 form points out discrepancies at a plant in terms of manufacturing or documentation lapses. If the company is unable to convince the US regulator of remedial measures taken by it, the issue then escalates into a warning letter from the regulator, which culminates in a ban on the facility, barring it from sending products into the US.

Last year Wockhardt went been through 35 inspections, said Khorakiwala. Of them, 29 had no major observations, two had some questions and four had critical observations, he said. In the last three months alone, there were 17 inspections, largely from India and one each by regulators from the US and the UK, he said.

While the outcome of inspections by the Indian regulator was largely positive, with minor observations, in the case of the two overseas regulators, the status quo was maintained, he said.

Wockhardt had spent ₹37 crore on consultants and legal expenses, Khorakiwala said. The company has been providing updates to the regulators even as it works to transfer its products to plants at other locations. One such is the Shendra facility, he said, adding that it has not been inspected by the US or UK regulators.

Wockhardt, saddled with a ₹3,800-crore debt in 2011, now has outstandings of ₹1,900 crore. It clocked sales of ₹4,830 crore for the year ended March 2014, down 14 per cent from the previous year. Profit after tax, at ₹841 crore, was down 47 per cent at ₹1,594 crore.

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