Sun Pharma’s Halol Plant May Get FDA Clearance Soon

The regulatory issues at Sun Pharmaceutical Industries Ltd.’s critical Halol plant may soon be resolved.

Simply put - the first observation speaks about rough, cracked and uneven surfaces that made cleaning difficult. The observation also talks of problems of airflow returning to the sterile area and the lack of use of contact plates. The second observation is regarding unclean gaskets while the third refers to deficiencies in the written procedure regarding cleaning and operating of the vial machine.

The Halol observations require remediation but there will likely be no re-inspection, according to analyst Anubhav Aggarwal of Credit Suisse. The observation on air-flow studies will likely require an FDA review post remediation, the research note authored by Aggarwal said.

Both Gurudatta and Aggarwal said that the plant may get clearance in four to six months.

BloombergQuint had on March 5 reported on the likelihood of the FDA’s observations being procedural in nature.

Why Halol Matters

The clearance will allow the Halol plant to speed up several complex generic filings and ramp up existing products in the U.S.
The launch of key drugs like Xelpros for Glaucoma and Elepsia used for epilepsy, developed by Sun Pharma Advanced Research Co. Ltd., also depends on clearance to the Halol plant.

Delay in plant clearance will cost Sun Pharma opportunities in the U.S. due to delayed drug approvals and its earnings growth will depend on a single product, according to a recent Morgan Stanley report.

The Halol plant’s contribution to the company’s U.S. sales declined to 11 percent from 22 percent before its regulatory troubles began, according to a CLSA report. Its share in overall sales dropped from 12 percent to 4 percent.

Part of that can be ascribed to an increase in the overall size of the company due to the Ranbaxy acquisition. But there’s also been a decline in sales from about $350 million to $150 million in three years through March 2017.