Ranbaxy's Toansa plant: From national awards to FDA concerns

Ranbaxy Laboratories's Toansa plant in Punjab was a showcase facility for the company until recently.

The 28-year-old plant bagged two national awards for excellence in water management in 2006. It supplies two-thirds of the active pharmaceutical ingredients (API) Ranbaxy needs to make drugs for overseas markets.

But the plant has now given the company cause for worry. The US Food and Drug Administration has raised concerns about manufacturing practices at the plant. According to FDAzilla, which provides intelligence related to the US drug regulator's inspections, the Toansa plant has been inspected six times since October 27, 2000.

The FDA's concerns have put a question mark on API manufacturing at the plant. Besides, the company could face delays in benefiting from first-to-file market exclusivity opportunities for three generic drugs - Diovan, Valcyte and Nexium. These drugs depend on API supplies from this facility and, according to analysts, have a potential to earn $600 million in revenue for the company.

Needless to say, the company must resolve the concerns raised by the FDA at the earliest. Failure to do so could have major consequences.

Ranbaxy's shares closed 1.95 per cent down at Rs 429.80 on the Bombay Stock Exchange on Tuesday.