June 12, 2018 / 12:26 PM / a year ago

Indian drugmaker Sun Pharma says Halol plant has gained U.S. clearance

MUMBAI (Reuters) - Supply restrictions imposed on India’s largest drugmaker Sun Pharmaceutical Industries by U.S. regulators have been lifted, the company said on Tuesday, removing a major drag on its share price.

Sun will now be able to resume shipments of drugs made at its Halol factory in western India, which contributed as much as 15 percent to its U.S. revenue in 2015. The restrictions on some drugs made at the site had been imposed after an inspection revealed quality control failures.

The world’s fifth-largest generic drugs maker has been working on fixing problems identified by the U.S. Food and Drug Administration (FDA) and the agency conducted another inspection in February.

“The agency concluded that the inspection is now closed and the issues contained in the warning letter issued in December 2015 have been addressed,” Sun said in a statement.

The clearance could add as much as $100 million to the company’s 2019 revenue as it ramps up volumes, said Praful Bohra, a pharmaceuticals analyst at Religare Capital Markets.

Halol is one of Sun’s most important sites because it also has the technical capabilities to make the complex niche drugs the company is developing to counter increasing competition in the United States.

The company said last month that it plans to launch three new drugs this year and is considering cutting down on spending on some generic drug projects that have become unviable.

Reporting by Zeba Siddiqui in Mumbai; Editing by Jason Neely and David Goodman

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