Natco Pharma’s stock saw a significant boost, climbing over 3% on Thursday. This surge followed the generic drug manufacturer’s Hyderabad facility receiving a favorable Establishment Inspection Report (EIR) from the U.S. Food and Drug Administration (FDA).
The U.S. FDA officially categorized the Hyderabad plant with a ‘Voluntary Action Indicated’ (VAI) status, Natco Pharma announced in its stock exchange update regarding the inspection conducted by the regulator in June. This positive news propelled the company’s shares to close 3.13% higher at Rs. 884.30 on the BSE.
During its inspection from June 9-19, the U.S. FDA had noted seven observations in Form-483 for the facility. This particular plant is crucial for manufacturing a range of pharmaceutical products, including oral solid dosages (like cytotoxic orals), cytotoxic injectables, and pre-filled syringes. Its primary focus areas encompass critical medical categories such as oncology, gastroenterology, central nervous system treatments, and cardiology.
This recent VAI classification marks a positive shift for Natco Pharma, as the U.S. FDA had previously issued a warning letter to the same facility in April 2024, citing quality concerns. That warning itself stemmed from an earlier inspection in October 2023, which resulted in eight observations. At the time, Natco Pharma had expressed worries that these issues could lead to delays or even a halt in pending product approvals from the site.
To clarify, a ‘Voluntary Action Indicated’ (VAI) classification from the U.S. FDA, given after a facility inspection, signifies that while some objectionable conditions or practices were identified, the agency does not intend to pursue administrative or regulatory actions at that time. This stands in contrast to ‘No Action Indicated’ (NAI), where no issues are found, and ‘Official Action Indicated’ (OAI), which signals that regulatory or administrative interventions are recommended.