Alembic snug after latest plant inspections, but street remains cautious

KV Prasad Jun 13, 2022, 06:35 AM IST (Published)

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Alembic Pharmaceuticals’ active pharmaceutical ingredient (API) unit at Gujarat’s Panelav seem to be faring well when it comes to US Food and Drug Administration’s (USFDA) inspections.

The latest inspection of the two API units took place from April 16 to April 23, 2018.

The company has only two API units – one at Panelav and the other at Kharkhadi, also in Gujarat.

The routine inspection concluded successfully as the USFDA issued zero observations to the facilities. This was also the case in June 2016, when the same two units were cleared with zero observations.

Two successful back-to-back inspections (with zero observations) indicate a good compliance level of the plant.

Besides reflecting positively on compliance standards, these units are important for company business too.

While the company do not have an exact plant-wise break-up of the contribution, Panelav unit is the company’s largest API plant.

About 80% of the API capacity is captive – used for in-house production – and the rest is sold. The company also had nine drug master files filed in the first nine months of FY18.

The company’s oral solid unit in Panelav, which was inspected by the USFDA in 2016 and 2018, didn’t enjoy the same zero observations as the API plants.

The oral solids unit was earlier inspected in March 2016, and was issued four observations by the USFDA that were subsequently resolved.

In March 2018, the same facility was again inspected and was issued three observations. While the number of observations is few and there is nothing as serious as data integrity, the street is fearing escalation of the first observation.

This first observation highlights the company’s failure to take corrective and preventive actions on a high number of tests results that were out of specification or invalid. Cases in point: 94% in 2016, 91% in 2017 and 63% in January-March 2018.

While the company has a strong compliance history, the street is cautious, especially because out-of-specification observations are becoming common compliance issues faced by Indian companies.

The fear is an inadequate response or remediation can escalate observations to warning letters or more.

The stakes are even higher as the Panelav solid dosages plant is the only USFDA approved formulation facility (the US contributes 28% of total sales) of the company. Hence, a remediation would be even more critical.

In any case, the next approval will be closely watched due to fears that if the plant issues don’t escalate, it may just be that the pace of approvals (around 9 to 10 expected in FY19) could slow down in the near term.

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KV Prasad Journo follow politics, process in Parliament and US Congress. Former Congressional APSA-Fulbright Fellow