Views on USFDA revokes approval for Sun Pharma's seizure drug over compliance issues: Angel Broking

Views of Ms. Sarabjit Kour Nangra (VP Research - Pharma, Angel Broking)

USFDA revokes approval for Sun Pharma's seizure drug over compliance issues

"The U.S. Food and Drug Administration have revoked an approval issued in March to India's Sun Pharma Advanced Research Company Ltd (SPARC) to launch a drug for seizures, citing manufacturing quality problems at its production site.

The move comes as a setback to SPARC, the research arm of India's largest drug maker, Sun Pharmaceutical Industries Ltd. The drug, Elepsia XR; was its first to receive an FDA approval. The company said in June it had been working "very aggressively" to find partners for the product. It had had "some advanced discussions" and aimed to launch the drug by the second half of fiscal 2016. During the first year itself the product could have easily garnered US$50-80mn in sales and US$25-40mn in net profit.

SPARC had earlier received a final approval from USFDA in March 2015 for this product and was evaluating several marketing partners for commercialization. However SPARC has now received a CRL from the USFDA rescinding its earlier approval, citing that the compliance status of the manufacturing facility was not acceptable on the date of approval.

This is a near term setback to the companies plan to launch the product, as we believe that once the facilities are approved the company will be able to launch the product. However, it is indicative of the fact that the companies Halol facilities will take time to resolve, though company has indicated that it is taking corrective actions for rectifying the same. Though a setback, we have not factored in the same in our numbers. We maintain our accumulate rating on the stock with a price target of INR 950."

Shares of SUN PHARMACEUTICAL INDUSTRIES LTD. was last trading in BSE at Rs.860.8 as compared to the previous close of Rs. 891.3. The total number of shares traded during the day was 263961 in over 8985 trades.

The stock hit an intraday high of Rs. 894 and intraday low of 857.5. The net turnover during the day was Rs. 228586008.

Source : Equity Bulls

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