Dr Reddy's gets USFDA warning for 3 drug plants; stock tanks

Hyderabad: Dr Reddy's Laboratories on Friday said it has received a warning letter from US drug regulator over quality issues at its two API manufacturing plants and a formulation unit in Andhra Pradesh and Telangana.

Dr Reddy's CEO G V Prasad said the company will respond with a comprehensive plan to address the observations by the US Food and Drug Administration.

DRL stock plunged nearly 15 percent on the BSE.

The company hopes for a re-audit of the three plants by USFDA once the observations made by it are rectified or fulfilled, said DRL President, CFO and Global Head of HR, Saumen Chakraborty.

DRL said in a regulatory filing that it "has received a warning letter issued by the US FDA dated November 5, 2015 relating to its API manufacturing facilities at Srikakulam in Andhra Pradesh and Miryalaguda in Telangana, as well as Oncology formulation manufacturing facility at Duvvada, Visakhapatnam in Andhra Pradesh".

This action follows the earlier inspections of these sites by the agency in November 2014, January 2015 and February 2015 respectively, it added.

In November last year, DRL said, USFDA had made as many as nine procedural deviations at Srikakulam plant.

According to USFDA website, during an inspection, FDA's Office of Regulatory Affairs investigators may observe conditions they deem to be objectionable.

These observations, are listed on an FDA Form 483 when, in an investigator?s judgement, the observed conditions or practices indicate that an FDA-regulated product may be in violation of FDA's requirements.

Sarabjit Kour Nangra, vice president research - pharma, Angel Broking, said the impact of the Active Pharmaceutial Ingredients (API) facilities would depend upon how quick the company fixes the USFDA issues, plant transfers or does third party sourcing, but the near term performance of the company will be impacted.

Prasad said they will respond with a comprehensive plan to address these observations within the stipulated time-frame of 15 days even as they take quality and compliance matters seriously and stand by the commitment to fully comply with the CGMP (Current Good Manufacturing Practice) quality standards across all of the company's facilities.

"We will continue to actively engage with the agency to resolve these issues and we have also embarked on an initiative to revamp our quality systems and processes, as an organisation-wide priority," Parsad said.