Lupin gets US FDA warning letter for Somerset plant

Lupin Ltd, one of the world’s largest generic drug makers, today said it received a warning letter from the US Food and Drug Administration relating to its US-based manufacturing plant located in Somerset, New Jersey.

“We wish to inform you that the Company has received a warning letter from the US FDA for the company’s Somerset, New Jersey facility,” Lupin said today in an investor update.

The facility had been inspected by FDA officials between Sep 10 and Nov 5 of last year.

Prior to the inspection last year, the plant was under ‘official action indicated’ or OAI status. To address concerns, Lupin had requested for a reinspection.

However, US FDA officials had issued 13 observations after the inspection late last year, and have now issued a warning letter.

The Somerset facility, acquired as a part of the 2015 takeover of Gavis Pharmaceuticals, contributes less than 5% of Lupin’s global revenues. Lupin acquired US-based Gavis Pharma for $880 mn in 2016, giving the Indian company its first manufacturing facility in a country that contributes more than a third of its revenue.

Gavis had 62 abbreviated new drug applications pending approval with the US FDA at the time of the acquisition and a pipeline of over 65 products under development.

Generally, adverse regulatory developments can affect the pace of approvals of new drugs intended to be manufactured at a particular plant.

At the same time, Lupin today said the warning letter is unlikely to disrupt existing supplies and revenue from the plant.

“The company does not believe that the warning letter will have an impact on disruption of supplies or the existing revenues from operations of this facility,” the Indian pharma manufacturer said.

“We are committed to addressing the concerns raised by the US FDA and will work with the FDA and the New Jersey District to resolve these issues at the earliest.

“We uphold quality and compliance issues with utmost importance and are committed to be compliant with Good Manufacturing Practice standards across all our facilities,” it added.

Lupin Ltd’s shares have performed in line with the broader market over the past one year.

They are up 30% on year, compared to a 50% jump seen in Cipla, 40% appreciation seen in Sun Pharma, 36% increase seen in the share price of Dr Reddy’s, and 79% and 65% increases seen in the stock prices of Cadila Healthcare and Glenmark Pharma during the same period.