Even as Lupin announced its $880-million buy of Gavis in the US, the company clarified that recent regulatory observations on its Goa plant by the US Food and Drug Administration (FDA) are “fairly routine” in nature.

Lupin Managing Director Nilesh Gupta told media persons that the FDA had nine regulatory observations on its Goa plant, in inspections conducted last month. The questions were not on data integrity, but on standard operating procedures — on things like periodicity of cleaning and warehouse management, he explained.

The company has responded to the “483 observations” (made on a 483 form), he said. “FDA inspections are a reality of life…483s will happen,” he said, adding that there have been about six inspections in as many months.

These would become more frequent as Lupin sells more in the US, Gupta said. What needs to be seen is whether companies can respond and resolve it, he added.

Regulatory observations pose the risk of warnings letters and future action if the company’s response is not accepted by the regulator.

Several Indian drug companies including Wockhardt, Sun Pharma and Ranbaxy (now part of Sun) face US regulatory action.

Q1 performance

Declaring its first quarter results, Lupin said net profit fell 16 per cent to ₹525 crore from ₹624 crore in the corresponding period last year. Net revenues were down 6 per cent to ₹3,074 crore (₹3,284 crore).

“Slowdown in approvals in the US dampened growth during the quarter, even as the company continues to improve on gross margins. We remain focused on evolving our research pipeline, ensuring compliance, operational excellence and acquiring meaningful assets,” Gupta said.

India, the US and Japan account for 80 per cent of Lupin’s revenues. The company’s US sales stood at $180 million during Q1 ($262 million). Its India formulations business grew 16 per cent to ₹885 crore.

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