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Exclusive: Lupin Pharmaceuticals slapped form 483 for 3 facilities

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Today we at Capital Mind bring you some exclusive articles. This follows our earlier post on Lupin’s Mandideep facility FDA inspection which was brought to notice in the IIFL report.

 Lupin FDA form 483

We continued tracking this and what you see now is a 3 part exclusive unwrapping of the observations reported from the US FDA’s inspection of Lupin Pharmaceutical’s facilities.

These documents are available only under the Freedom of Information Act. The posts that we now talk about below will be available only to the Capital Mind Premium subscribers.

We hope to have done justice by disclosing the observations from the form 483 which had been inaccessible until now (do note that we will not be sharing the complete form 483 with our readers. However, we will share only certain limited sections of the form 483).

Here is a brief of what will be spoken of in the forthcoming posts. The detailed posts would involve disclosure of the form 483, breakdown of the observations to a comprehensive level along with our views and understandings.

  • Part 1 – Covering the oldest Inspection first would be the FDA’s inspection of the Aurangabad facility which has both Manufacture and Packing operations. The facility does not have the permission to manufacture API’s.
    • The facility was first inspected from 30-Mar-15 to 3-Apr-15 which resulted 2 observations around Laboratory controls and Sampling Plans.
    • The facility was re-inspected following the management’s reply over the observations received and the remediation measures taken. The re-inspection took place from 11-Jan-16 to 15-Jan-16 (almost 9 months post the initial inspection) which resulted 3 observations i.e. one each around Quality System, Material Systems and Production Systems.
  • Part 2 – Covering the FDA’s inspection of the Goa facility which has both Manufacture and Packing operations. The facility does not have the permission to manufacture API’s.
    • The facility was first inspected from 9-Jul-15 to 7-Jul-15 which resulted 9 observations i.e. 2 around Laboratory Control Systems, 1 around Quality Systems, 4 around Facilities and Equipment System, 1 around Production System and 1 around the Materials System.
    • The facility was re-inspected following Lupin’s justification for the observations received and the remediation measures taken. The inspection took place from 7-Mar-16 to 11-Mar-16 (almost after 8 months post the initial inspection) which resulted in another 9 observations again i.e. 1 around Laboratory Control Systems, 1 around Quality Systems, 3 around Facilities and Equipment System, 3 around Production System and 1 around the Materials System.(reclassification of the observations has been done by the author of the post and not by the FDA based on the re-inspection report)
  • Part 3 – Covering the FDA’s inspection of the Mandideep facility. This facility has 2 separate units. The Unit 1 or the API manufacture unit and Unit 2 or the finished drug manufacturer unit (sterile and non-sterile) unit. Additionally both these units have separate approvals for packing operations as well.
    • Both the units have had a single inspection (unlike their Aurangabad and Goa units which were first inspected and then re-inspected post remediation measures taken by the management. The re-inspection was performed from 8-Feb-16 to 19-Feb-16 resulting in a total of 2 observations each.
    • Unit 1 or the API manufacture unit received 2 observations, first around use of ejected lots for the production of sterile APIs and the second around the contact time with disinfectants for personnel involved with the manufacturing of sterile products.
    • Unit 2 or the finished drug manufacturer (sterile and non-sterile) unit received 2 observations, first around the inappropriate design of the equipment used in the manufacture, processing, packing or holding of drug products and the second around the same as received for Unit 1 over the contact time with disinfectants for personnel involved with the manufacturing of sterile products in addition to the absence of written procedures for cleaning and maintenance of equipment including utensils.

 

We hope you have a good learning experience from these posts. We welcome your feedback and comments.

Our View on Lupin’s Issues

We do not have a recommendation open on Lupin at the moment, but we do feel that the information in the media is currently limited to hearsay, so we have analyzed the actual sources for all these details. Our views on the FDA observations:

1) Aurangabad: The implication is minor – they need to set up cleaning and resampling heuristics to conform to Good Manufacturing Processes. There are some slightly major issues about not identifying root causes of failures. Most major is the lack of process that tests every lot at the QC level before release. These can be fixed reasonably easily but they need to not have repetitions in rechecks.
 
2) Goa: Has fairly large observations, like in one case a QC failure of a raw material was still passed through to the final product manufacture, and a root cause analysis not done in some cases. More minor are things like you didn’t have your people visually see the samples of drugs after one year to check for deterioration, and cleaning, sanitation and hygiene issues. Root Cause Analysis and QC process failure are more of a concern.
 
3) Mandideep: There’s an issue of rejected intermediates, but that has been recalled. The rest are minor.
 
We think Lupin’s Goa issues are the only ones of major consequence. The FDA is now speeding up its reobservations so Lupin needs to get its act together fast in order to not have further issues.
 
We think there is NO major risk of import alert. If there is an issue it will be because they ignore the Root Cause Analysis notes. So it’s no longer just about rejecting failed batches, it’s about finding out what happened in your manufacturing or packaging process that created the defect in the first place. The cleaning and sanitation changes are relatively easy to do if they keep appropriate checklists. (Like one simple observation was – why are Lupin’s cleaners using the same mop to clean multiple areas, this might spread contamination from one place to another.) Others may require some minor infrastructure changes – like in one warehouse, there was a gap between a door bottom and the floor through which rodents could enter – for which they would have to change the door setup a little. 
 
In general, such observations are not deeply negative, and corrective action can be taken fast. An aggressive FDA may find issues which it let pass earlier, simply because they feel the heat from US-based manufacturers who fear the competitio
n. There will always be issues of some sort, but it’s important that certain processes be maintained extremely well – from a cleaning/hygiene/sanitation point of view and also from their ability to detect and fix quality issues in a well-documented manner. We trust Lupin will work harder to fix these issues.

Disclosure: Capital Mind had earlier recommended Lupin as part of a momentum portfolios, but at the moment it is not a stock in any recommended portfolio. The authors at Capital Mind  do not own it in their personal/family accounts, and the company does not own any position in the company’s stock. There is no business relationship between the companies mentioned and Capital Mind.

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Disclaimer

Nothing in this newsletter is financial advice and should not be construed as such. Please do not take trading decisions based solely on the matter above; if you do, it is entirely at your own risk without any liability to Capital Mind. This is educational or informational matter only, and is provided as an opinion. 

Disclosure: The authors at Capital Mind have positions in the market and some of them may support or contradict the material given above, or may involve a direction derived from independent analysis.

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