Sun Pharma Shares Drop 7.7% as Halol Facility Gets ‘OAI’ Classification by USFDA

Sun Pharmaceutical Industries Ltd shares plunged as much as 7.7% in early trade on Monday after the company’s Halol manufacturing facility in Gujarat was flagged by the US Food and Drug Administration (USFDA), risking all new approvals for products coming from the facility.

At 9:31 am, Sun Pharma shares were trading at Rs 326 apiece, down 3.6% from their previous close, after hitting the day’s low of Rs 312. The stock has fallen 25% from the beginning of this year tracking a 30% loss in the benchmark BSE Sensex during the period after the coronavirus pandemic spooked markets.

Sun Pharma on Sunday informed stock exchanges that its Halol plant has been classified as ‘Official Action Indicated’ (OAI) by the USFDA after a December 2019 inspection.

“The OAI classification implies interalia that the USFDA may withhold approval of any pending product applications or supplements filed from this facility till the outstanding observations are resolved,” the company said in the filing.

Sun Pharma, however, clarified that the current business would not be affected by the USFDA action. “The company continues to manufacture and distribute existing products for the US market, thereby not likely to have any adverse impact on current business from the facility,” it said in the statement.

The company added that it continues to cooperate with the USFDA and will undertake all necessary steps to resolve the issues highlighted and to ensure that the regulator is completely satisfied with its remedial action.

After the inspection held during 3-13 December 2019, Sun Pharma’s Halol plant was issued Form 483 by USFDA with eight observations, which has now escalated into an OAI classification.