Jubilant Pharmova Stock Up After US FDA Nod for Roorkee Facility

18 Apr 2024 , 11:10 AM

Jubilant Pharmova's shares reached a 52-week high of 699.15 in early trading on April 18, following the US Food and Drug Administration (US FDA) designation of the company's arm as "voluntary action indicated" (VAI).

Jubilant Pharmova was quoting ₹682.00 at 9:21 a.m. on the BSE, up ₹10.40, or 1.55%.

The wholly owned subsidiary of Jubilant Pharmova Limited, Jubilant Pharma Limited, announced that Jubilant Generics Limited (JGL), which specializes in generics, received notification from the USFDA stating that, as a result of the agency's audit of JGL's solid dosage manufacturing facility in Roorkee, India, which took place from January 25 to February 2, it has determined that the facility is classified as voluntary action indicated (VAI)." The company released this information.

The facility is deemed to be in an acceptable state of conformity with current good manufacturing practices (cGMP) in light of this inspection and the VAI classification. The FDA continued, saying that in light of this, the inspection is now closed.

Four observations on JGL's solid dosage formulations facility at the Roorkee plant were issued by the US FDA in February.

The business announced on April 18 that Jubilant Cadista Pharmaceuticals Inc., USA, a subsidiary, has chosen to cease manufacturing at its solid dosage formulation facility located in Salisbury, Maryland, USA.

On June 17, 2024, the manufacturing operation at the aforementioned plant is anticipated to come to an end, along with the first separations.

The sales and marketing activities for the US market will be carried out by Jubilant Cadista. The aforementioned plant can produce 1.5 billion doses of tablets and capsules annually for the US market.

Jubilant Cadista has suffered large losses starting in FY2022 as a result of intense pricing pressure that has been present in the US generics market for the past few years.

It has been decided to switch the US generics firm's operating model from internal production to outsourcing manufacturing by a select group of US FDA-approved CMOs for the US market in an effort to bring the business profitable.

The company anticipates a significant and gradual rise in shipments from the Roorkee facility to the US market following the Roorkee facility's status transition from USFDA to VAI. The factory was only exporting risperidone to the US market at the time.

By lowering manufacturing, quality control, and overhead expenses, these steps are anticipated to increase the generics company's gross margins and propel it closer to profitability. The company also stated that the generics company intends to increase sales in the US market by introducing new products.

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