Aurobindo Pharma may take a $20-m hit this quarter

Mumbai: Aurobindo Pharma anticipates a hit of $20 million in the ongoing January-March quarter due to a temporary pause of manufacturing and distribution activities at its crucial Eugia Unit-III formulation facility in Telangana, following certain red flags raised by the US drug regulatory agency in the recently concluded inspections.

The company said it is planning to resume manufacturing operations in a phased manner starting with non-aseptic lines. The US regulatory agency issued Form 483 with 9 observations against the facility at the conclusion of the inspection on February 2. The company, as an “abundant caution”, put on hold manufacturing at certain lines.

The company, in its earnings call on Monday, said the observations are related to certain gaps in the “aseptic process and documentation”.

The facility alone contributes $40 million per quarter and constitutes more than half of the pending pipeline.

“We submit a comprehensive response by the USFDA‘s deadline of February 26,” said Santhanam Subramanian, CFO, Aurobindo Pharma, at an earnings call. Subramanian said the company anticipates to resume production on non-aseptic lines from the end of the month and phased resumption on aseptic lines following an assessment which may take about 1-2 months.

Aurobindo said it may consider the option of doing site transfer of certain key products from Unit-3 to the new plant in Visakhapatnam if the resolution takes time.

Eugia, a subsidiary which manufactures oncology, hormonal, penems, penicillin, ophthalmic, and general injectables to the US market, is critical to Aurobindo’s US business.

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Roy Walsh

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