UK regulator restricts third Wockhardt unit
Oct 22 2013 , Mumbai
The Medicines and Healthcare Products Regulatory Agency (MHRA) will now issue a restricted GMP certificate to the site.
Wockhardt on Tuesday informed stock exchanges that the company has received a communication from the MHRA of the UK, informing it that the agency had decided to withdraw the previously issued GMP certificate to its manufacturing facility at Kadaiya, Nani Daman, and that it would be issuing a restricted GMP certificate to the site along with a statement of non-compliance.
Shares of the company fell 4.29 per cent on Tuesday to close at Rs 458.20.
“In order to avoid market shortage of medically essential products, the GMP certificate will be conditioned to permit continued manufacturing and QC (quality control) testing of ‘critical’ products in situations where it has been agreed by the national competent authority or EMA (as appropriate) that there is no feasible alternative in the concerned market,” the company said in a statement.
“The scope of the statement of non-compliance is therefore limited to medicinal products considered non-critical to public health. Accordingly, the company shall be able to manufacture and supply from the said facility certain medicinal products critical to public health,” it said, adding that the impact of the same on the existing business will be known only when the company receives further communication from UKMHRA.
This is the third Wockhardt plant to be hit by export restrictions this year , after Waluj and Chikalthana. MHRA had earlier withdrawn the GMP certification for the pharma major’s Chikalthana unit two weeks ago.
Last week, the UK regulator also issued a recall for drugs made at the plant in a £1 million blow to the company. The regulator, however, allowed Wockhardt to export some essential drugs to the UK market, which will contribute approximately £3 million to the firm’s consolidated revenue.
In July this year, UKMHRA had imposed an import alert on Wockhardt’s export-oriented plant at Waluj in Maharashtra and issued a precautionary recall of 16 medicines made by the company at the unit, after the US Food and Drug Administration (FDA) had issued a similar import alert in May on the same facility. The Waluj facility makes injectables and solid dosages.
Wockhardt had at that time said it had already initiated several corrective actions to resolve the issues at the Waluj plant. The company said it does not manufacture any product for the US market at the said facility.
The recent developments would have an impact on the company’s revenues as well as on reputation, analysts felt. The UK market contributes nearly 20 per cent of Wockhardt’s total revenue. “There is now a fundamental issue with Wockhardt. Around 60-65 per cent of its revenue comes from the Chikalthana unit, which is under FDA scanner now. The MHRA withdrew its GMP certification to the Waluj plant earlier this month and called for a precautionary recall of Wockhardt products. The recent development in the Daman unit will now tarnish the image of the company, as the unit contributed around 20 per cent of Wockhardt’s UK market demand. It remains to be seen how the management addresses these issues now,” said Sudhir Ghule, pharma research analyst at KR Choksey.
Ghule said going by the situation, the company would be left with only the Indian business, which contributes only 20 per cent of the overall business.