Cadila Healthcare received a warning letter from the US health regulator for two Gujarat units on Thursday. “The company has received a warning letter issued by the US Food and Drug Administration relating to its Moraiya formulation facility and Ahmedabad oncology API facility (Zyfine),” the Gujarat-based pharma company said in its filing to exchanges.
Pankaj R Patel, CMD, Cadila Healthcare, said there are no data integrity issues with the Moraiya facility. He said the company plans to give additional information to the US FDA to address the Moraiya issue.
He also added that nine site transfers have been completed from the Moraiya facility.
For the Zyfine facility, Cadila has already identified problems; and has undertaken required action against employees. Zyfine site has not supplied to the US; and is under remediation, said Patel.
Below is the verbatim transcript of Pankaj R Patel’s interview to CNBC-TV18’s Ekta Batra and Sumaira Abidi.
Ekta: Can you give us the details of the warning letter and whether it contains any data integrity issues especially for the Moraiya facility?
A: This warning letter actually consists of two sites – first site is the Moraiya site, wherein there are no data integrity issues. The issue is around investigation and completeness of the investigation and specifically for a product for which we had recall sometime back – Warfarin. As a company we have already discontinued manufacturing Warfarin long back. Also we have revised our standard operating procedure (SOP) with respect to the investigation is concerned which we have already informed FDA. Based on what we have received now we will give them additional information to address the Moraiya issue.
As far as the second site is concerned Zyfine this site we had identified, had a problem in a result. We had done a significant action against the employees. While FDA came in we had a problem on that site so we had basically informed FDA, withdrawn all our drug muster file from that site and also subsequently withdrawn the site from FDA. So, we currently do not hold registration of FDA with this site.
This site has never supplied any product to USA to our company directly or even indirectly through any other company. So, this site currently is under remediation and it will take some time before we will briskly bring that site back to action. However, there is no revenue generated from that site.
Ekta: Just to get this clear, for your Moraiya facility, there was not much of a deviation from form 43 that you had received in August 2014 in the warning letter?
A: Yes, right.
Ekta: Just wanted to talk about US business then. For the Moraiya facility how many site transfers have you managed to successfully undertake already and how many are in the pipeline?
A: We have done something like about 9 site transfers completed and we have another five under execution from Moraiya site. We have two other sites which is the one at Baddi and the other one is at our new Special Economic Zone (SEZ). Both the sites are compliant. We have received the Environmental Impact Report (EIR) of the SEZ facility recently. Also we have been receiving approval from our Baddi sites. If you look at our filing today and our number of pending filing half of the filing which are pending for approval are from the other two sites and we expect that some of these products will also have approval in 2016.
Ekta: If you could specifically comment on a couple of products that I am going to quiz you about as to your ability Asacol HD, Previcid as well as Toprol. These are considered limited competition opportunities for Cadila Healthcare going forward. Are they transferred already to a different site? Any or all?
A: They are under process of transfer. The process transfer is not completed yet.
Ekta: So, you would manage to retain the competition or retain these opportunities.
A: Yes.
Ekta: What is your guidance then for the US business going forward? How much do you think you can generate in terms of sales on a quarterly basis? You did around USD 150 million in Q2. When do you expect a pick-up based on the US FDA issues that you are facing right now?
A: I cannot give specific timeline with respect to when the FDA would start clearing product from Moraiya site, but other two sites. We would expect approval coming in from 2016 and that should help us to continue protecting the sale but also growing the sale going forward.
Ekta: So, you have around 200 Abbreviated New Drug Application (ANDA) plus or thereabouts which are filed with the US already. So, you expect those approvals to come from the other facilities?
A: As I told you, 50 percent of the pending approvals are from the other two sites, so that 50 percent of the filing has happened from other two sites and that we should get approvals. Moraiya site, once the warning letter is resolved, then and there, we can expect approvals on that.
Ekta: When do you expect the warning letter possibly to be resolved by in your assessment?
A: It is difficult to it is to early we briskly response to FDA in the next 15 days and then discuss with them to find out when we can actually get it resolved.
Ekta: Would you be retaining your FY16 guidance in terms of revenue as well as EBITDA margins?
A: As such we are not giving any guidance but we believe that we will be able to manage 2016 numbers.
Date: December 31, 2015