MUMBAI India's Ipca Laboratories Ltd said on Thursday it has voluntarily suspended shipments to the United States from one of its drug ingredient manufacturing plants after the U.S. Food and Drug Administration (FDA) expressed concerns regarding the unit.
Ipca, a mid-sized generic drugs and ingredients maker, said the FDA issued a so-called "Form 483", a letter in which the agency typically outlines violations of its guidelines observed during inspections of manufacturing plants. Ipca did not give details about the contents of the Form 483 that it had received.
Over the past year, large Indian drugmakers such as Ranbaxy Laboratories Ltd and Wockhardt Ltd have been hit by a spate of regulatory sanctions due to concerns about production processes at their local plants. The sanctions have hurt India's reputation as a supplier of safe, affordable drugs.
The shipment halt from Ipca's Ratlam plant in central India will also impact its U.S. drug exports from its Silvassa and Indore plants in the country, where it makes drugs using ingredients from the Ratlam plant, Ipca said in a statement.
Under the FDA rules, drugmakers get a chance to respond to the observations made in a Form 483. If the regulator is not satisfied with the response it can impose a ban on imports from the plant. Ipca did not say in the statement if it had had contact with the FDA since the Form 483 was issued.
The company said it is "fully committed in resolving this issue at the earliest," and will resume shipments only after it has addressed all FDA concerns.
The halt could impact Ipca's revenue by up to 10 percent, depending on how long the company takes to resolve the issue, some brokerage analysts said.
Ipca exports to various global markets including the United States, Canada, Europe and Australia. Exports made up about 63 percent of the company's sales in the financial year ended on March 31, according to information on its website. Shares of Ipca, which has a market capitalization of about $1.8 billion, fell as much as 10 percent after the announcement. They were trading down 6.6 percent at 782.50 rupees at 0129 ET, while the Mumbai market index was down 0.2 percent.
The U.S. sanctions have cut the pace of India's drug exports. Drug exports grew 2.6 percent in the 2013/14 fiscal year ended in March. Two years ago, the rate was 23 percent.
India, home to a large number of generic drugmakers, is second only to Canada as a drug exporter to the United States, where it supplies about 40 percent of generic and over-the-counter drugs.
(Reporting by Zeba Siddiqui; Editing by Sumeet Chatterjee and Ryan Woo)