Sun Pharmaceutical says FDA to lift import ban on Mohali manufacturing plant

Sun Pharmaceutical said Tuesday that the FDA will lift an import alert imposed on its Mohali manufacturing plant in India, allowing the company to begin shipping products from the facility to the US. Shares in the company rose as much as 7 percent on the news.

Sun Pharma gained the Mohali plant as part of its $3.2-billion acquisition of Ranbaxy Laboratories in 2015. The FDA had taken action against the facility in 2013, when it ordered the plant to be fully subject to Ranbaxy's consent decree of permanent injunction designed to ensure compliance with good manufacturing practices.

Sun Pharma noted that certain conditions of the consent decree will continue to be applicable to the Mohali facility. The company added that the "development illustrates Sun Pharma's commitment to work closely with the US FDA and strive for 100 percent cGMP compliance at its manufacturing facilities."

Commenting on the news, IDBI Capital Markets & Securities analyst Chaturya Aggarwal indicated that the FDA's decision is a sentiment booster for Sun Pharma, although no benefit would be felt immediately as a drug application transfer and approval would take at least 24 months. Aggarwal noted that as the company is "seeing a slow pace of approvals from the Halol facility, they could use this (Mohali) as one of the plants to file drug applications." HDFC Securities analyst Amey Chalk added "there are about 20 filings pre-2013 from Mohali but are not lucrative, so it will not change US revenues for the company drastically."