Sun Pharma trades lower after USFDA lists Halol facility under ‘import alert’

The US health regulator has pulled up drug maker Sun Pharmaceutical and listed its Halol facility in Gujarat under “import alert”, sending the stock tumbling by more than 3 percent.

At 10.45 am, the stock was quoting at Rs 993.85 on the National Stock Exchange, down 2.3 percent. Trading volumes at 3.5 million shares were two times higher than 20-day average volume of 1.8 million shares.

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The import alert means that all future shipments of products manufactured at this facility are subject to refusal of admission to the US market until the facility becomes compliant with current good manufacturing practice (CGMP)standards.

The US Food and Drug Administration (USFDA) conducted an inspection at Sun Pharma’s Halol facility from April 26 to May 9, 2022. It has excluded 14 products from this import alert, subject to certain conditions.

For the year ended March 2022, supplies to the US market from the Halol facility accounted for 3 percent of the company’s consolidated revenue, including the 14 excluded products.

“The company continues to cooperate with the USFDA and will undertake all necessary steps to resolve these issues,” Sun Pharma said in an exchange filing.

Following the development, Asian Markets Securities cut Sun Pharma’s price target to Rs 1,156 from Rs 1,211.

“Import alerts are very tough to remove, and several companies (IPCA, Wockhardt) are still not able to get the facility back in compliance after seven-10 years,” it noted.

Sun Pharma’s Mohali facility is also under the USFDA radar. The plant, which is now under OAI (official action indicated) status, had received a form 483 with six observations in August.