Ipca hit by US FDA import alert for two more units; stock crashes

Just two months after receiving an import alert from the US Food and Drug Administration (US FDA) for its Ratlam manufacturing unit in Madhya Pradesh, Ipca Laboratories Ltd has now received another import alert for two more manufacturing plants, the company said in a stock market disclosure.

On March 24, 2015, the US drug regulator issued an import alert to the company's units located at SEZ Indore (Pithampur) and Piparia (Silvassa).

"These two units use the APIs (active pharmaceutical ingredients) from the Ratlam manufacturing unit for the formulations manufactured at these units for the US market. The voluntary stoppage of API shipments from the Ratlam unit for the US market will also have an impact of company's formulations export business to US market," it said.

Ipca had decided to temporarily suspend API shipments from the facility to the US till the issue is addressed and therefore has not shipped any APIs or formulations to the US market except the products that exempted from the import alert, including hydroxychloroquine sulfate, propranolol hydrochloride, trimethoprim and ondansetron.

The fresh import ban by the US FDA in the world's largest drug market, saw its share price crash 12.55 per cent to Rs 664.65 each on BSE in a flat Mumbai market on Wednesday.

Mumbai-based Ipca, which manufactures APIs and finished dosage forms, counts ChrysCapital and SAIF Partners besides a few sovereign wealth funds as its investors.

Last month, Ipca picked close to 19 per cent stake in Krebs Biochemicals & Industries Ltd from its promoters and said it is now hiking it further to around 30 per cent through a preferential allotment. This has triggered an open offer to buy up to 26 per cent more in Krebs.

Headquartered in Hyderabad since 1991, Krebs is a biochemical company with two manufacturing plants in Nellore and Vizag. As per its website, Nellore unit is approved by US FDA. It has not been generating any income from operations in the recent past. For the quarter ended December 31, 2014 it had net loss of Rs 1.4 crore on zero revenues.

(Edited by Joby Puthuparampil Johnson)

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