* Cuts 52 percent of its workforce, or 350 jobs
* Caraco: JPMorgan Chase says line of credit not available
* Caraco shares down 4 pct (Adds background)
July 6 (Reuters) - Caraco Pharmaceutical Laboratories Ltd CPD.A said it would slash more than half its workforce to align its expenses with the current halt in production, following U.S. health regulators' recent seizure of the company's medicines on repeated manufacturing violations.
The generic drugmaker, which said it would cut 350 jobs, added that JPMorgan Chase Bank had informed the company that its $10 million line of credit was not available to be drawn down upon until the regulatory matter was resolved.
However, this will not have any material impact on the company’s current financial position, Caraco said. The company had 667 full-time and contract employees at March 31.
The company said the timing of the resumption of manufacturing operations depends on the discussions with the U.S. Food and Drug Administration, and should have no effect on distributed product sales in the United States.
Caraco, which received a warning letter from the FDA last October, is the latest in a growing group of generic drugmakers who have been pulled up for manufacturing problems.
Late last month, the FDA seized drugs made at the company’s Michigan facilities in Detroit, Farmington Hills, and Wixom, including generic versions of heart, pain and psychiatric medicines.
FDA also seized the ingredients held at the facilities. [ID:nN25294672]
At the time, the regulator said many or all of 33 generic drugs manufactured by Caraco in multiple strengths may have been seized.
The FDA had also determined that the seizure of Caraco's drugs may create a shortage of one product, choline magnesium trisalicylate oral tablets that are commonly used as pain relievers. In January, rival KV Pharmaceutical KVa.NKVb.N stopped making and selling all its products after several manufacturing issues that resulted in oversized tablets.
Earlier this year, two generic drugmakers had manufacturing problems with copycat versions of AstraZeneca's AZN.L blood pressure medicine Toprol XL, resulting in a better-than-expected sales of the branded drug.
Last year, bigger players in the space, like Novartis AG's NOVN.VX generic drug unit Sandoz and U.S. units of Iceland's Actavis were snubbed for violating good manufacturing practices.
Caraco shares were down 4 percent at $3.03 in midday trade on the American Stock Exchange. (Reporting by Esha Dey in Bangalore; Editing by Himani Sarkar)
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