Torrent Pharma Declines On U.S. FDA Observations

Shares of Torrent Pharmaceuticals Ltd. declined in early trade for the second consecutive day after it received observations from the U.S. drug regulator over manufacturing standards at its plant in Indrad, Gujarat.

The Food and Drug Administration released on its website today the Form 483 it had issued to the plant, which was inspected between April 8 and 16, containing four observations. The plant caters to U.S.—making finished products and active pharmaceutical ingredients—and generates nearly 80 percent of the firm's revenue from the nation. The action comes barely three weeks after Torrent Pharma's plant in Dahej, Gujarat, received five observations after a similar inspection.

Although the observations haven't been repeated, Nomura wrote in a recent report that if the inspection is classified as Official Action Indicated, it could delay product approvals.

Saion Mukherjee, pharma analyst at the brokerage, said in the report that he is concerned at the multiple instances of improper or inadequate investigation on out of specification test results. The tone and tenor of Form 483 for the Indrad plant is similar to the one issued to Lupin's Goa facility, which also received an FDA Warning Letter in 2017, Mukherjee said. “We think Torrent Pharma would be required to comprehensively reply to the Form 483 observation and demonstrate the ability to investigate invalidated test results.”

We're responding to the U.S. FDA appropriately, Torrent Pharma told BloombergQuint over mail. “The observations are procedural in nature and the company is confident of addressing them satisfactorily.”

However, the inspection is unlikely to escalate into anything serious, according to Amit Rajan, an expert on good manufacturing practices at Prosfora Technologies. “It (the inspection) is not good for the company but it isn't too concerning either.”