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The management of Sun Pharma clarified on Thursday evening that they would not revise their revenue guidance for the current financial year, despite the USFDA placing the company's Halol facility under an import alert.

The company had guided for sales growth to be in the high-single digits to low-double digits in the current financial year.

Halol is one of Sun Pharma's export-oriented manufacturing units and was inspected by the drug regulator between April 26 to May 9 this year.

In its clarification to the exchanges, the company said that the import alert will have no impact on the company's specialty revenue and that they will evaluate product transfers on a case-to-case basis.

The Halol facility accounted for nearly 3 percent of the company's overall revenue or $150 million in financial year 2022.

Sun Pharma's Halol facility will remain under the Official Action Initiated (OAI) status as there were 10 (non-compliance) observations have been marked in the regulatory inspection report, said a note issued by the FDA to the company.

An import alert means that all future shipments of products manufactured at the particular facility are subject to entry refusal in the US market until the facility becomes compliant with the FDA's current Good Manufacturing Practices.

However, the US drug regulator has excluded 14 products from this import alert, subject to certain conditions, though the company has not specified the products that have been excluded. The conditions for the supply of these 14 excluded products is confidential, according to Sun Pharma.

India's largest pharma company by revenue is currently is assessing incremental costs to meet the conditions for the supply of exempted products. The company is currently evaluating whether any additional costs need to be incurred.

"The Company continues to cooperate with the USFDA and will undertake all necessary steps to resolve these issues and to ensure that the regulator is completely satisfied with the company’s remedial action," the company wrote in a stock exchange filing.

In an interaction with CNBC-TV18 last month, after posting quarterly results, Sun Pharma Group CFO CS Muralidharan said that the company was working towards Halol plant remediation, but that would take some time.

Last month, the company's Mohali facility was also classified as Official Action Initiated (OAI) unit. The regulators had inspected the erstwhile Ranbaxy facility in August and had issued six observations for the same.

Brokerage firm Bernstein called the import alert for the Halol facility "disappointing" but added that revenue and margin impact from the same is insignificant. The brokerage added that the US specialty business and India branded generics will continue to be the key growth drivers for the company. It expects the US generics business to be a drag on Sun Pharma's growth and margin.

Bernstein has maintained its outperform rating on the stock with a price target of Rs 1,099

Nomura called the import alert a negative surprise as it will lead to loss of sales and delay new product approvals. Assuming an annual sales impact of $100 million to $150 million due to the import alert, Nomura expects a 4-7 percent impact on the company's Earnings per Share for financial year 2024. The brokerage has also maintained its buy recommendation on the stock with a price target of Rs 1,094.

(Edited by : CH Unnikrishnan)

First Published:Dec 8, 2022 10:25 AM IST