Sun Pharmaceuticals' US-based subsidiary, Caraco Pharmaceutical laboratories has slashed its workforce by half after the US Food and Drug Administration (FDA) shut down distribution for "repeated manufacturing standards violations'' last month, which forced the company to voluntarily close its manufacturing facilities. (See: Sun Pharma puts up brave face after FDA crackdown)
The Detroit-based generic drug maker said in a statement that it is slashing 350 jobs from a workforce of 667 full-time and contract employees, and was told by its banker JPMorgan Chase Bank, that the company could not draw on its $10-million line of credit until the regulatory matter with the FDA was resolved.
Currently, Caraco is negotiating with the FDA on resuming some or all of its manufacturing and said, ''The timing of the resumption of manufacturing operations, in whole or in part, depends on the outcome of discussions with the FDA. This should have no effect on distributed product sales that we market in the US.
The company also said that the action taken by JPMorgan Chase Bank does not have any material impact on the company's current financial position since manufactured product sales have represented approximately one-third of the company's net sales revenue.
Caraco develops, manufactures, markets and distributes generic and private-label pharmaceuticals to the wholesalers, distributors, drugstore chains and managed care providers in the US.
Sun Pharma acquired a majority stake in Caraco in 1997 and currently holds a 76-per cent stake. Of Caraco's nearly $337-million turnover, nearly $225 million comes from distributing Sun Pharma products in the US, with the remaining $112 million coming from the sale of its own products.