Shares of Mylan, Inc. MYL declined 2% after the company received a warning letter from the FDA for its manufacturing facility in India.
The FDA cited significant violations of current good manufacturing practice (CGMP) regulations for finished pharmaceuticals in the warning letter. The violations relate to the agency’s inspection in Sep 2016 and even though the company had responded to the same, the agency deemed them inadequate.
The warning letter was issued on Apr 3, 2017 wherein the FDA stated that the company’s methods, facilities, or controls for manufacturing, processing, packing, or holding do not conform to CGMP, resulting in drug products being adulterated under section 501(a)(2)(B) of the Federal Food, Drug and Cosmetic Act (FD&C Act), 21 U.S.C. 351(a)(2)(B).
The FDA determined that Mylan invalidated 101 out of 139 (about 72%) initial out-of-specification (OOS) assay results without sufficient investigation to determine the root cause of the initial failure from Jan 1 to Jun 30, 2016.
The FDA warned that until Mylan redresses the violations completely and confirms its compliance with CGMP, the approval of new applications and the listing of the company as a drug manufacturer may be withheld.
The facility at Nashik produces antiretroviral therapies used to treat HIV.
We remind investors that in 2013, the FDA issued a warning letter to Strides Arcolab for its Agila Sterile Manufacturing Facility 2 in Bangalore, prior to the completion of the Agila acquisition. In 2015, the FDA issued a second warning letter regarding this facility, the Agila Onco Therapies Limited (OTL) facility and the Agila Sterile Product Division facility (SPD).
Mylan currently has nine API and intermediate manufacturing facilities and a total of sixteen finished dosage form facilities, which includes nine oral solid dose facilities and seven injectable facilities, all located in India.
Mylan’s woes do not seem to end. Last month, the company received a complete response letter from the FDA regarding its abbreviated new drug application (ANDA) for the generic version of GlaxoSmithKline's GSK asthma drug Advair Diskus.
We note that shares of Mylan have performed better than the Zacks categorized Medical-Generic Drugs industry in the past year with the stock losing 17.5% compared with the industry’s decline of 22.2%.
Shares of Mylan has been under immense pressure since Aug 2016 when the company faced criticism for the price increase of EpiPen since its acquisition of the drug in 2007 from lawmakers, consumers and the common people alike. The pricing controversy even led to a congressional hearing and attracted immense censure.
Also, right after the pricing issue, Mylan made it to the headlines for wrongly classifying EpiPen as a generic product in the Medicaid Drug Rebate Program. The misclassification implied that Mylan has been greatly underpaying rebates to Medicaid for the drug for a long time than it would have if the drug was classified as a branded one.
The guidance for 2017 was a silver lining in the clouds. However, with the company’s ANDA for Advair being served a CRL, it might be a daunting task for the company hereafter. Meanwhile, we note that Mylan’s biologics license application for a biosimilar version of Amgen’s AMGN Neulasta (pegfilgrastim) is also under FDA’s review.
Of late, the FDA has issued several warning letters to drug manufacturing facilities have in India for violating quality standards. Dr Reddy’s Laboratories Ltd RDY too received a warning letter from the FDA relating to cGMP deviations at three of its manufacturing facilities.
Mylan currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Zacks’ Best Private Investment Ideas
While we are happy to share many articles like this on the website, our best recommendations and most in-depth research are not available to the public. Starting today, for the next month, you can follow all Zacks' private buys and sells in real time. Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Click here for Zacks' private trades >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
GlaxoSmithKline PLC (GSK): Free Stock Analysis Report
Amgen Inc. (AMGN): Free Stock Analysis Report
Dr. Reddy's Laboratories Ltd (RDY): Free Stock Analysis Report
Mylan N.V. (MYL): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research