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09-23-2013, 03:49 AM #1
Ranbaxy seeks to assuage shareholders' worries
Drug major Ranbaxy Laboratories on Friday sought to assuage concerns of shareholders in the wake of company's stock price taking a hard knock after the US Food and Drug Administration banned the import of drugs from its Mohali plant.
Earlier this week, the US health regulator had put an import alert on the company's Mohali plant, post an inspection in late 2012. The plant at Mohali (Punjab) is the company's third unit to come under an USFDA import alert after the Dewas (Madhya Pradesh) and Paonta Sahib (Himachal Pradesh).
"At this point, Ranbaxy would like to assure all stakeholders that we are taking stringent steps to address all concerns raised by the USFDA in this regard," Ranbaxy Laboratories CEO and Managing Director Arun Sawhney said in a letter to the shareholders.
He said that the company is focusing on resuming submissions and supplies to the US from its Mohali plant once the company satisfies the USFDA stipulations.
"We appreciate that more is expected from Ranbaxy and will continue to work together with the USFDA for an early resolution of their concerns," Sawhney said.
After reports first surfaced that FDA put Ranbaxy's Mohali plant under import alert, the company's stock price dived over 30 per cent on September 16. While the share price surged 6 per cent the next day to Rs 334.25 apiece, the stock has remained volatile in the next sessions. Today, its shares ended 4.86 per cent down at Rs 333.45.
Sawhney said the US health regulator has brought the Mohali plant under certain terms of the Consent Decree (CD), filed in late January 2012 for its Paonta Sahib and Dewas plants in India.
"The company is assessing the terms and practical applications of this CD...As a consequence of the recent developments, all new product approvals from the Mohali plant for the USA market will follow the procedure as set out in the CD," he told shareholders.
Sawhney said in in terms of the CD with the USFDA for its Paonta Sahib and Dewas plants, the company has committed to further strengthen procedures and policies to ensure data integrity and to comply with current good manufacturing practices (cGMP).
"I would like to inform you that Ranbaxy has so far met all its obligations under the CD and is making progress in its implementation," he added.
Sawhney said that Ranbaxy has strengthened its management, manufacturing and monitoring systems and processes to ensure quality and compliance since the last inspection by the USFDA in 2012.
Ranbaxy continues to invest in R&D to enrich its global product pipeline and install latest technologies at its manufacturing facilities, he said.
"Ranbaxy has a pipeline of new products including First-To-File (FTF) product exclusivities and the company will seek to maintain the value of its product portfolio," he added.
Under the consent decree, Ranbaxy is prohibited from producing FDA-regulated drugs at the Mohali facility and introducing drugs into interstate commerce, including into the United States, until the firm's methods and facilities used to manufacture drugs at the facility are established, operated, and administered in compliance with CGMP.
According to USFDA, Ranbaxy is required to hire a third-party expert to conduct a thorough inspection of the Mohali facility and certify to the FDA that the facilities, methods, processes, and controls are adequate to ensure continuous compliance with CGMP.
In May this year, Ranbaxy had pleaded guilty to "felony charges" related to the manufacture and distribution of certain 'adulterated' drugs made at two units in India and agreed to pay USD 500 million to US authorities as a penalty.
This followed a series of actions by the US authorities and the FDA, which in 2008 banned the import of 30 generic drugs produced by Ranbaxy at its Dewas and Paonta Sahib plants for violation of manufacturing norms.