Biocon Biologics’ Bengaluru Facilities Get VAI Tag From US Drug Regulator

The United States Food and Drug Administration has issued "voluntary action indicated" or VAI tag to the manufacturing facilities of Biocon Biologics Ltd. in Bengaluru, an exchange filing stated on Nov. 10.

Notably, the VAI is the second-best classification the US drug regulator awards, after No Action Indicated. The classification is generally issued when a plant receives observations, the company responds to them and USFDA finds the response satisfactory.

VAI means objectionable conditions or practices were found, but they are not severe enough to attract any administrative or regulatory action. The company can fix the observed loopholes without the watchdog's intervention and operations can carry on as usual.

Biocon Biologics is a subsidiary of pharmaceutical major Biocon Ltd. According to the regulatory filing, the USFDA carried out inspection at the facilities between July 15 and July 26 earlier this year.

The American drug regulator's inspection was carried out to assess the current good manufacturing practices at the facilities, Biocon Biologics said in a statement. The checks were also related to the pre-licensing inspection, it added.

The scope of inspection included "six separate Biologics manufacturing units" comprising of four drug substance and two drug product manufacturing plants, along with five analytical quality control laboratories, four microbiology laboratories, and two warehouses, the company said in a statement.

Commenting on the VAI tag by the USFDA, a Biocon Biologics spokesperson said the company "remains committed to global standards of quality and compliance.”

On Friday, shares of Biocon, the listed parent entity, closed 2.1% lower at Rs 321.25 apiece on the BSE, compared to a decline of 0.07% in the benchmark Sensex.

The company's stock is up 28% on a year-to-date basis, and has advanced by 41.2% over the past 12 months.

Among the 19 analysts tracking Biocon, eight have a 'buy' rating on the company's stock, three suggest a 'hold', and seven recommend 'sell', as per news agency Bloomberg's data. The average of 12-month analysts' price target implies a potential upside of 4.8%.

As per the company's investor presentation, second half of the current fiscal should see an improvement due to continuing recovery in Syngene, momentum in biosimilars, and new launches in generics.

The company has also recently refinanced its debt at lower cost to aid profitability in biosimilars.