Cadilla Healthcare shares slump after US warning

Shares of Cadila Healthcare tanked 17 per cent to Rs320 on the National Stock Exchange in early morning trade after the pharmaceutical company received a warning letter from the US Food and Drug Administration relating to its Moraiya formulation facility and Ahmedabad API unit.

''The company has received a warning letter issued by the US FDA relating to its Moraiya formulation facility and Ahmedabad API facility (Zyfine),'' Cadila Healthcare said in a regulatory filing.

"The company said it will respond to US FDA to address the observations within the statutory time permitted in the letter. The company is working hard to ensure that the commitments made to the US FDA are fully completed. The company will continue to take all necessary steps to ensure that the US FDA is fully satisfied with our remediation of the above facilities," it added.

Cadila has, however, clarified that there are no products in the US market which use API of the Zyfine facility.

During the second quarter of FY2016, the company had mentioned that it has initiated site transfer of key filings namely Asacol HD, Toprol XL and Prevacid OTD and expects it to be done over the next 6-9 months, the broking firm said in a client note.

Cadila has already gained site transfer approvals for four of its existing products. Also, its new SEZ formulations facility (oral oncology, oral solids) received the Establishment Inspection Report (EIR) from the USFDA.

The company has undertaken 40+ filings over the past three - four years from this facility paving the way for monetizing its large ANDA pipeline. Additionally the company is also hopeful of commissioning its new sterile injectable facility located in Baroda by July 2016, the filing added.