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The stock of drug maker Wockhardt Pharma has lost over 21 per cent in the last two trading sessions. The company’s decision to recall some batches of drugs which were manufactured at its facilities – Chikalthana and Waluj (Maharashtra), prior to the US drug regulator Food and Drug Administration’s (FDA) import ban in 2013, triggered the sharp fall.
Wockhardt’s two key facilities located at Chikalthana and Waluj, which cater to its US business, came under the US drug regulator’s scanner in 2013, following product quality and data integrity issues.
The facilities were re-inspected early this year following re-mediation measures taken by the company. During the inspection, it was found that batches of select drugs exported prior to the FDA import alert, did not conform to stipulated quality standards. The company has now initiated recall of drug batches which were sold prior to US FDA action in 2013.
Even if Wockhardt manages to resolve the pending regulatory issues, the revenue potential from its key products in the US such as the hypertension drug Toprol will be significantly lower, thanks to price erosion.
Wockhardt, which was holding about 10 per cent share in this drug in October 2013, has lost out to peers such as Mylan, Par Pharma and Dr Reddy’s. Given the intensity of the regulatory issues and competition in the US market, it may be some time before Wockhardt resumes growth path.
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