New Delhi, January 23, 2016: An administrative lapse turned out to be a major embarrassment for Ahmedabad-based Lincoln Pharmaceuticals Ltd, which faced cancellation of its registration with Tanzania Food and Drugs Authority (TFDA) triggering heavy sell-off in the company stocks on the exchanges.
On Monday, the company informed that the Tanzania drug authority — TFDA had banned import of one of its products, Chloramphenicol Sodium Succinate Injections and cancelled company’s registration. The statement gave no specific reason behind the ban.
In a statement to the stock exchanges, company said, “One of the company’s highest selling products is Chloramphenicol Sodium Succinate Injection. The company has got many orders from the government institutes. Tanzania drug authority has announced to stop and banned importing of this product and Company’s registration has also been cancelled. In this circumstances, a huge quantity dispatched by the Company to Tanzania has been kept on hold and authority has issued a notice to destroy the product.”
The company further mentioned that it will cause big impact on profit margin of the Company and due to the rejection of registration, a large quantity of raw material and packaging material stock is piled up at factory and this would add to the losses.
Company shares hit the lower circuit and ended at Rs. 179.20, down by close to 20 per cent on the Bombay Stock Exchange (BSE) on Monday.
Even as the Managing Director, Mahendra Patel and joint managing director Rajani Patel could not be reached for comments despite repeated attempts, the company officials informed that the loss would be limited to around Rs. 50 lakh.
Speaking to BusinessLine a senior official from the company’s finance department, said, “The ban came due to technical and administrative reasons. There was nothing wrong with the quality of the product. The registration of this particular product was due for renewal last month. We could not do it on time. We have taken up the action for renewal. The ban is not going to affect the overall business of the company in the African region.”
According to him, company has total exports of around Rs. 100 crore, out of which about Rs. 70 crore is exported to African region. “We have about 2000 products — all off-patented generic drugs — registered in this region. And about 1000 more products are in the pipeline.”
The company has a total turnover of Rs. 350 crore. Its board meeting is scheduled for next month to consider quarterly results.-BusinessLine
