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Aurobindo Pharma receives Sebi’s warning letter over ongoing US FDA audit

The letter is in regards to certain disclosures made by the company on the ongoing FDA audit of company's Unit-I and observations made by the US FDA between the period 2019 to 2022

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Aurobindo Pharma yesterday said it has received a warning letter from capital markets regulator Securities and Exchange Board of India (Sebi) for non-disclosure of details related to an ongoing audit of one of its manufacturing units in Hyderabad and observations made by the US Food and Drug Administration (FDA).

The letter is in regards to certain disclosures made by the company on the ongoing FDA audit of company’s Unit-I and observations made by the FDA between the period 2019 to 2022, Aurobindo Pharma said in a regulatory filing.

The Sebi warning letter observes that the company had “disclosed very limited and restricted information” and it did not disclose the detailed reasons and also did not consider the observations of FDA as serious, it added.

The Sebi letter sent to the company on 24th June, 2022 pertains to disclosures made by APL related to Official Action Indicated (OAI) and warning letter issued to it by the FDA following inspection carried out in August 2021 on the Unit I, an Active Pharmaceutical Ingredients (API) manufacturing facility in Hyderabad.

On 10th November, 2021, the company had announced that the FDA had classified the inspection conducted at its Unit-I between 2nd and 12th August as OAI, but it would not affect the continuing commercial supplies to the US market from this facility, the Sebi letter said.

Subsequently, on 14th January, 2022, Aurobindo Pharma disclosed that with regard to OAI classification of Unit-I, the company had received a warning letter from the FDA for the said unit, it added.

“From the disclosures made by the company, it was observed that the company had disclosed very limited and restricted information. The only fact disclosed was that a warning letter was received from USFDA. The company did not disclose the details on the reason and the non-compliance/aberration observed for which the warning was issued,” Sebi said in the letter.

The markets regulator also pulled up the pharma company for claiming that information about the FDA action was disclosed in investor’s earning call, the transcript for which was disclosed on stock exchanges, even when it “did not provide any additional information beyond what was already disclosed.”

Also, Sebi said the company had submitted to it that the FDA was not satisfied with the response of the company on two of the observations issued in the inspection, for which a warning was issued in January 2022.

The two observations issued were not considered serious by Aurobindo Pharma, claiming it had already taken robust corrective actions to mitigate the risk and the concerns raised by FDA have already been adequately addressed and status of corrective actions being continuously updated to the FDA.

“APL’s submission on not considering the warning as serious is not tenable. While the warning letter is available on the US FDA website, the company chose to make limited disclosure. Mere disclosure of the receipt of the US FDA warning letter is insufficient and an impediment to assess the current status,” Sebi said.

Stressing that the non-compliance by APL is “viewed seriously,” Sebi warned the company asked it to “ensure compliance with all applicable provisions” of regulations. “Any such aberration in future would be viewed seriously and appropriate action would be initiated,” Sebi said, asking the company to place its letter before APL’s next board meeting and disseminate the same to the stock exchanges.

Edits by EP News Bureau

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