Thanks for starting this thread. Past and future compliance record is definitely a very interesting and important dimension along which we should analyse potential pharma investments. Ill follow this thread closely to learn from others experiences. My 2 cents based on whatever I have read and understood is that one has to understand company specifics as well. On the one hand, some companies seem to make compliance a culture and on the other extreme companies seem to treat it as a hurdle to be crossed. Of course, the vast majority falls somewhere in the middle and have to be evaluated based on publicly available information in AR, concalls, investor presentations, management interviews etc. I’ll add my thoughts on 4 companies and their compliance track records to demonstrate my points:
- On the one hand are companies like alembic and neuland with clear USFDA track record. Some of this definitely has to do with the processes created and the seriousness with which they treat compliance. Both companies indulge in mock USFDA inspections and jage strong QA departments focus a lot on ensuring quality of the deliverables. Neuland is into sterile APIs and alembic into injectibles (since 2012 at least). Still they continue to provide good USFDA compliance.
- Companies like Caplin use past USFDA approved facilities to fast track orders into other countries which might have a faster procedure for facilities for approving USFDA. They do this while not supplying to US which ensures easier compliance.
In short, in my opinion it might be useful to take a company specific approach in order to understand why certain companies have a much better record than the others.