India's Sun Pharma hit by U.S. FDA import alert on plant, shares drop

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BENGALURU (Reuters) - Sun Pharmaceutical Industries Ltd's drug shipments from its Gujarat plant could be refused entry in its key U.S. market after the drug regulator slapped an import alert on the facility, the drugmaker said on Thursday.

The Food and Drug Administration's (FDA) import alert is effectively a ban, implying all future shipments of products made at the plant in Halol, Gujarat could be refused admission to the U.S. market until the facility becomes compliant with the regulator's Current Good Manufacturing Practice standards.

Shares of Sun Pharma slid 3.9% in its sharpest intraday drop since end-May, and were the top loser on the blue-chip Nifty 50 index.

"The company continues to cooperate with the U.S. FDA and will undertake all necessary steps to resolve these issues and to ensure that the regulator is completely satisfied with the company's remedial action," Sun Pharma said.

The FDA has excluded 14 products from the import alert, subject to certain conditions.

It was not immediately clear what the conditions are and what remedial action the FDA had asked the company to take. Sun Pharma did not immediately respond to Reuters' request for further comment.

"Import alerts are very tough to remove, and several companies are still not able to get their facilities back in compliance after 7-10 years," said Shrikant Akolkar of Asian Markets Securities, after it cut Sun Pharma's revenue and earnings outlook, and lowered target price by 4.5% to 1,156 rupees.

The focus would now move to Sun's Mohali facility, Akolkar added. The plant was classified as "official action indicated" after an inspection in November, which means regulatory or administrative actions would be recommended.

The Halol plant had received the same inspection classification in August after the FDA made 10 observations.

Supplies to the U.S. market from Halol including the 14 excluded products, contributed to about 3% of Sun Pharma's consolidated revenue in the year ended March 2022, per the company.

(Reporting by Navamya Ganesh Acharya in Bengaluru; Editing by Subhranshu Sahu, Savio D'Souza and Dhanya Ann Thoppil)


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