Torrent Makes ‘Cautious’ Comeback With Losartan In US
Executive Summary
Torrent restarts sale of losartan in the US, exercising caution to ensure the API sourced is “impurity free.” Timely resolution of compliance deviations at the firm’s Indian sites is also critical for growth momentum in the US.
Torrent Pharmaceuticals Ltd. has resumed sales of hypertension drug losartan potassium in the US and also hopes speedily to resolve compliance blips at its Indian sites, which are key to gaining new product approvals.
Torrent, which in April expanded a recall of losartan in the US following the detection of unacceptable levels of N-Methylnitrosobutyric acid (NMBA) in the active pharmaceutical ingredient (API) made by Hetero Labs, said that it had restarted supplies of the product but was taking a “slow and cautious” approach to make sure that the product sold and the API sourced was “impurity free.”
“We do not expect to get back to the original market shares at least in the next couple of quarters,” Sanjay Gupta, Torrent’s executive director (international business), said on the 23 July earnings call following publication of its results for the first quarter of fiscal 2020.
Torrent previously commanded a market share of close to 30% for losartan and around 20% for losartan potassium/hydrochlorothiazide, but was “nowhere near that” currently, the executive noted, adding that other players were also getting back, although demand still exceeded supply, in general, across the board for sartans.
On 18 April, Torrent said that it had expanded a recall in the US to include an additional 36 lots of losartan potassium tablets and 68 lots of losartan potassium/hydrochlorothiazide tablets to the consumer level due to the detection of trace amounts of NMBA found in an API manufactured by Hetero. Torrent maintained at the time, however, that it had not received any reports of adverse events related to the recall. (Also see "The Quality Lowdown: Deferred Expire Dates, Broadened Import Alerts, Recall Roundup " - Pink Sheet, 29 Apr, 2019.)
Resumption of losartan sales contributed to Torrent’s first quarter US revenues, which stood at INR3.76bn ($54.5m; +13%). During the quarter, the company filed three ANDAs; it expects to make close to 15 more ANDA filings in this fiscal year. Overall sales for the first quarter rose 8% to INR20.22bn, with India sales at INR9.07bn (+9%). Net profit for the quarter was INR2.16bn (+32.5%).
Torrent's share price surged by over 9% to end at INR1606.60 on the Bombay Stock Exchange on 24 July, but some analysts were unsure whether the good operational performance merited such an strong rise in share prices. Others also referred to speculation around Torrent's interest in acquiring Wockhardt Ltd. or JB Chemicals & Pharmaceuticals Ltd., both rumored to be on the block as per local media reports. JB Chem in June said that "as of now" it was "not aware" of such negotiation, and dismissed the news as "merely speculative and factually incorrect." (Also see "Buyout Firms Eye Wockhardt’s Domestic Formulations Unit" - Generics Bulletin, 9 Jul, 2019.)
Manufacturing Compliance Issues
Meanwhile Torrent, which is grappling with compliance issues at its Indian facilities in Dahej and Indrad, is hopeful of setting things right promptly.
Last week, the company said that the US FDA had classified an inspection conducted at its Dahej facility in March as Official Action Initiated (OAI). An OAI inspection classification in general results when significant objectionable conditions or practices are found and regulatory action is warranted to address the deviations.
Torrent said at that time that it had already submitted its initial response to the US FDA and commitments given in response to the agency’s Form 483 observations had been fulfilled. “The company is sending further updates over receiving of this OAI letter. The company will be engaging with the regulator and is fully committed in resolving this issue at the earliest,” Torrent said in its 17 July filing with the Bombay Stock Exchange.
Executive director Gupta reiterated that the FDA action was not expected to disrupt current revenues and supplies from the Dahej facility.
“We continue to ship the existing products, but we are not getting new approvals,” Gupta said on the earnings call.
In terms of remediation timeline expectations, Torrent said it could not give any specific guidance but referred to the experience of peers where such issues could typically take anywhere from six to 12 months.
“Given that there are no data integrity issues etc, our internal expectations are that it should be on the shorter side,” Gupta added.
Broking house Sharekhan, however, noted that if the issue is not resolved satisfactorily within a stipulated time-frame, it could result in escalation to a Warning Letter/Import Alert.
“Hence, we feel this event is likely to remain an overhang in the near term until successfully closed/resolved. Although the Dahej plant is relatively new, it is strategically important for the company as several new filings come from this unit,” Sharekhan said in a 23 July update.
Meanwhile, Torrent has also yet to hear from the FDA on the inspection classification for its Indrad site. On 26 April, Torrent said that an FDA audit at the Indrad plant had resulted in certain observations which were “procedural” in nature and that the company was confident of addressing them satisfactorily.