Actionable insights on equities, fixed-income, macros and personal finance Start 14-Days Free Trial
Actionable investing insights Get Free Trial

Cadila Healthcare Recalls 2.2 Lakh Bottles of Venlafaxine Capsule


CadilaCadila Healthcare – the 4th largest player in the Indian pharma market with 16 of the group’s brands feature amongst the top 300 pharma brands in India as per AWACS March 2016, has issued a recall of 223,776 bottles of Venlafaxine HCL ER Capsule both 75mg and 150 mg in 30-count, 90-count and 1000-count bottles.
Venlafaxine hydrochloride is a structurally novel antidepressant for oral administration
The product was manufactured at Cadila Healthcare, Ahmedabad and Distributed by Zydus Pharmaceuticals, USA. Cadila was slapped by the US FDA Warning Letter with a warning letter for Moraiya formulation facility and Ahmedabad API facility (Zyfine) earlier during the year. This recall has been initiated on the same grounds.
The recall was already initiated from the 19-Jul but was reported to the FDA only on the 18-Aug. Most of the products recalled are from a batch of 2017 expiry. This only means that the company’s revenues from this product alone would take a significant hit over the next 16 months alone (we are not sure what additional long term impact if any might be).

Why the Big Deal?

While not all details have been divulged by the company or the FDA, the simple reason stated is Failed Dissolution Specifications: out of specification dissolution results in retained samples“. 
Whenever a dissolution test fails to meet specifications, an investigation should be performed to determine the cause(s) of the failure. The failures can be due to Man (analyst), Machine (dissolution apparatus), Method (SOPs), Materials (standards, buffers, dosage form, etc.). In this case, no information is available if the company performed a dissolution test post receipt of complaints as this was a voluntary recall and not an FDA driven.
Establishing the appropriate dissolution specifications will assure that the manufacture of the dosage form is consistent and successful throughout the product’s life cycle and that each dosage unit within a batch (in this case multiple batches) will have the same pharmaceutical qualities that correspond to those shown to have an adequate safety and efficacy profile. Dissolution specifications will minimize variability to the patient and therefore will optimize drug therapy.
Zydus US Business

What is a Class II recall?

The recall has been initiated only in the United States for now, but there is potential for recall from other countries if the same product under the same batch has been sold across other nations. The call has been classified as a Class II recall.
This happens in a situation in which use of or exposure to a violative product may cause temporary or medically reversible adverse health consequences or where the probability of serious adverse health consequences is remote.

This paves the way for any future potential law suits, thereby adding even more stress on the revenues from this product. The recall status is “Ongoing” which means that currently there is no end in sight on the recall of this product.

What now?

Its been over 8 hours since the recall initiation was disclosed and there is no update from the company on this. We will wait to see what the company has to add on to this recall. There are 10 others companies (Aurobindo Pharma, Dr. Reddy’s, Torrent Pharma and Wockhardt among others) who can now vie for the revenue lost by Cadila from this recall.

Holdings: Analyst and family do own stock listed above.



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.


Like our content? Join Capitalmind Premium.

  • Equity, fixed income, macro and personal finance research
  • Model equity and fixed-income portfolios
  • Exclusive apps, tutorials, and member community
Subscribe Now Or start with a free-trial