Sun Pharma had to temporarily halt production at its Mohali unit to fix the issues flagged by the US FDA.
Global research and broking firm Morgan Stanley sees near-term headwinds getting worse for Sun Pharma after the company halted production at its Mohali facility, the latest in a string of troubles that have hit the pharmaceutical firm.
Morgan Stanley said the drugmaker’s business has been affected by a slew of issues, including the import alert at its Halol facility, recent IT issues and cash-burn due to the acquisition of Concert Pharmaceuticals.
In the latest setback, the company had to temporarily halt production at its Mohali unit to fix the issues flagged by the US Food and Drug Administration (US FDA).
In August 2022, the American drug regulator carried out an inspection of the plant and classified it as 'Official Action Indicated' (OAI). This is the most severe classification given when the US health regulator is dissatisfied with a company's response to the observations made during the inspection.
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To export final batches to the US, the FDA instructed Sun Pharma to rectify specific procedures at the Mohali facility.
Morgan Stanley, however, said that beyond the near-term challenges, Sun Pharma has a good pipeline of launches. On that account, the broking firm has retained its "overweight" call for the stock, with a target price of Rs 1,170, reflecting a possible upside of around 20 percent from the closing price on April 24. The stock closed almost a percent lower at Rs 980.05 on the National Stock Exchange.
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