[T.S.R:16967] Aurobindo Pharma-Gets Into A Slugfest with the USFDA

The US FDA has set an import alert on Aurobindo Pharma's cephalosporin manufacturing plant (unit VI) for detention of products from this plant. We do not expect any major financial impact of this as the share of this plant for the US market is 3-4% of revenue.

 

n       Import alert on unit VI. The USFDA inspected Aurobindo's cepholosporin facility, unit VI, in Dec '10 and subsequently set an import alert for detention of its products for the US market. However, reasons for the deficiency in unit VI have not yet been disclosed.

n       Details of unit VI. Unit VI manufactured cephalosporin-based oral and sterile APIs and formulations. It is not clear whether the import alert is for oral and/or sterile products. Management has requested the US FDA for clarity and Aurobindo would not make any shipment from unit VI for the US market till the alert is lifted.

n       Financial impact. The share of revenue from this unit (sterile and oral formulations) for the US market is 3-4% of revenue, which is not material. We retain our estimates till clarity emerges. The company's growth outlook remains strong.

n       Risks: Delay/failure in execution of supply contracts
 

Safe Harbor Statement:

Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints.

 

Nothing in this article is, or should be construed as, investment advice.

 

 

 

 

 

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