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The share price of Sun Pharma surged 3.6 per cent last Tuesday. This followed the company’s announcement that the US Food and Drug Administration (USFDA) had proposed to lift the import alert imposed on its Mohali (Punjab) manufacturing facility and remove the facility from the Official Action Initiated (OAI) status.
This will clear the path for Sun Pharma to supply approved products from the Mohali facility to the US market. Currently, the US business accounts for 45 per cent of the company’s total sales. In the near term though, earnings accretion may not be much as the review and approval of drugs filed earlier from the Mohali plant may take time.
The Mohali facility had been inherited by Sun Pharma as part of its acquisition of Ranbaxy in April 2015. It was during September 2013 that the US FDA had imposed an import alert on the Mohali plant for violations. The development is significant, given that the Halol plant at Gujarat, one of Sun Pharma’s major facilities, remains under US FDA scrutiny.
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