My take on the FDA 483 - Clearly I was not expecting this, and although the observations are minor and easily rectifiable I would have assumed that Biocon would have had it's act together knowing that an inspection was due. This was not a surprise inspection after all.
That being said, let's put a couple of things in context -
1. About management policy of not commenting - They maintain their policy of not commenting on "non material" inspection outcomes. And based on the 483, the observations were indeed non material! How do I know this ? If the observations were material, there would be a temporary import freeze into the US on all products from said facility, until cleared after a re-inspection. This is clearly not the case, and business is going on as usual. So I have no quarrels with the management not commenting on this issue. Additionally they have unequivocally stated in the con call that this does not in anyway affect the timeline or anything else associated with their impending biosimilar decision dates later this year. So I'm not too worried.
- Biocon has the best regulatory (FDA) track record, better than even several US companies. In the past 10 years (ending 2015) Biocon has received a grand total of 6 - 483 forms. This is miles ahead of most Indian and American companies including Mylan.
@Shivram - Differentiating on quality based on the end destination of the drug is routine practice. That;'s how the industry operates. The compliance cost for drugs manufactured for the US & EU markets are extremely high, No pharma company would maintain US standards and incur the compliance costs for drugs to be marketed in Africa for instance. The selling price of the drug in Africa, as an example, would not cover the additional compliance costs incurred. The determining factor here is country specific compliance requirements. So not sure what you mean by saying "they should not differentiate and quality should be a culture" That's how the industry works, and for good reason.
In conclusion, I'm disappointed that the FDA did find Biocon lacking and made observations requiring additional management action, but that being said, it changes nothing in so far as my investment thesis goes. September & October of this year are extremely important for Biocon & that's all that I'm focused on.
Note- I am extremely biased, and happy to admit it. So please take everything I say with a spoonful of salt. But my focus is only on the biosimilar business & so anything that does not in anyway affect/delay/derail that is just noise to me.