- Inspectors from the Food and Drug Administration spotted new issues at Sun Pharma's manufacturing plant in Halol, Gujarat, India during an August inspection, putting the key facility back under scrutiny after it had received a green light from U.S. regulators in June.
- Following a pre-approval inspection, the FDA issued a Form 483 to Sun with six observations, including issues with the plant's test procedures for drug products.
- Shares in Sun dropped nearly 7% between Sept. 6, when news of the observations broke, and Sept. 11, after the FDA posted the document online. The company's stock has since recovered some of those losses, perhaps reflecting belief by some analysts that the issues raised are mostly procedural.
This inspection report comes just a few months after the Food and Drug Administration finally resolved a long-running regulatory challenge for Sun and its Halol plant. In 2015, the FDA issued a warning letter to the facility, holding up new U.S. approvals for drugs produced at the site.
Clearing that warning letter from the plant has been a multi-year struggle for Sun, crimping its ability to grow its business in the U.S.
Finally, in June, the FDA issued an Establishment Inspection Report that classified the facility as "Voluntary Action Indicated," suggesting some issues remained but did not rise to the level of regulatory action. That Halol is now back under the microscope doesn't build confidence, even if it turns out the issues don't amount to another regulatory roadblock.
The Form 483 details a range of potential issues, most dealing with written procedures for drug stability testing. In addition, tests were not carried out on raw materials for the presence of Burkholderia cepacia on a number of products. And in one capsule filling process, FDA inspectors observed Sun's equipment was intermittently functional, requiring manual interventions from production staff.
But it's not clear whether the observations will trigger further regulatory action. One analyst, at least, doesn't see much of an impact.
"I don’t believe that there will be any holdup of approvals from this plant. The current plant status is clear and they can continue to export and get in new approvals," wrote Praful Bohra, an analyst at Equirus Securities, in a note cited by Bloomberg Quint.
In a statement on its website, Sun said it would submit its response to the FDA within 15 days. Perhaps coincidentally, Sun also recently recalled one lot of metformin hydrochloride tablets due to discovery of a piece of rubber glove in one tablet. The lot had been manufactured at Halol.
Elsewhere, Sun's Mohali plant is currently undergoing an inspection, which began on September 10.
While the Halol report is just observations, and the Mohali inspection has not revealed anything, Sun can't sit easy just yet.