Ahead of sale to Mylan, Agila Specialities receives warning from US FDA

Bangalore-based Agila Specialities Pvt Ltd, a wholly owned subsidiary of Strides Arcolab Ltd that is being sold to US-based Mylan Inc for $1.6 billion, has received a warning letter from US Food & Drug Administration (US FDA) for its sterile manufacturing facility.

“The US FDA inspected the sterile manufacturing facility in June 2013 and the inspection resulted in an issuance of Form FDA 483 with observations. The company responded to the 483 observations by implementing corrective actions," Strides Arcolab said in the filing.

Strides also announced that Agila’s oncology facility was inspected recently by US FDA and got cleared with ‘zero 483 status’. It announced that it has eight US FDA-approved sterile manufacturing facilities and is working with US FDA to resolve this issue.

An FDA Form 483 is issued to a firm if an inspection throws up violation of the Food Drug and Cosmetic (FD&C) Act and related Acts. Observations are made when conditions or practices observed would indicate that any food, drug, device or cosmetic has been adulterated or is being prepared, packed or held under conditions whereby it may become adulterated or rendered injurious to health.

It notifies the company’s management of objectionable conditions. Companies are then encouraged to respond to the FDA Form 483 in writing with their corrective action plan and then implement that plan expeditiously.

A few weeks ago Strides had disclosed that it has had 15 inspections in the past at various facilities of which seven had zero 483s, while the rest of them had observations.

This comes at a critical juncture for Agila which is to soon change hands. Mylan had announced a deal to buy the generic injectables unit of Strides housed under Agila for $1.6 billion early this year and recently received the government’s approval to bring money into the country as part of the deal.

Although such inspections, and at times warnings, are part of regular business for drug makers, analysts are drawing parallels with the troubles of Japan’s Daiichi Sankyo after its majority stake acquisition in Ranbaxy a few years ago. Ranbaxy pleaded guilty of making fraudulent statement to the US FDA for getting approvals for its products and recently agreed to pay penalty of $500 million to the US Department of Justice (DoJ).

However, its troubles are not over yet with the US FDA issuing an import alert on Ranbaxy’s manufacturing facility in Mohali, its third Indian unit which effectively faces a ban of all drugs made in the unit from exports to the US, the largest drug market in the world.  

(Edited by Joby Puthuparampil Johnson)

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