Drug major Lupin has received a warning letter from the US health regulator for its Somerset, New Jersey facility. The US FDA had inspected the site from September 10, 2020 to November 5, 2020.

Nithya Balasubramanian, Director at Sanford Bernstein expressed her disappointment at this.

“The management has been talking about company-wide initiatives in terms of overhauling their SOPs, training their personnel to be able to increase the level of quality in their manufacturing and quality function. That unfortunately we are not seeing come through. So, it is disappointing given the amount of investment the company has made, given the amount of commentary we have heard from the management in terms of what all they are doing in order to improve their performance in FDA compliance, she told CNBC-TV18.

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Balasubramanian further added that the Somerset facility had been in Official Action Indicated (OAI) status for a while and the warning letter is not a surprise.

“Specifically for that particular plant, it has had an Official Action Indicated (OAI) status for a while and it was in October last year when the FDA re-inspected the facility and it ended up again in a bunch of observations and some of it were repeat observations. So, the escalation into a warning letter is not surprising,” she said.

While the Somerset warning letter may not have a material impact on earnings, it raises questions on the company’s three plants in India which also have a warning letter.

“Thankfully there are no material products that have been filed from this facility. So we don’t see too much earnings impact. But the question is, what does the warning letter at Somerset mean for the other three plants which also have a warning letter in India. If FDA were to inspect these plants today, would Lupin actually be successful in removing the warning letter status is a big question mark given with what we have seen happen with the Somerset facility,” she said.

For the full interview, watch the video.

(Edited by : Abhishek Jha)

First Published:Jun 16, 2021 3:47 PM IST