Cadila's shares fall after WHO faults vaccines plant standards

MUMBAI (Reuters) - Cadila Healthcare's (CADI.NS) shares fell on Wednesday after the World Health Organization (WHO) cited violations of manufacturing and clinical standards at one of the drugmaker's vaccines factory in western India.

WHO staff inspected Cadila's manufacturing plant in Moraiya in Gujarat state in October, and found "several major deviations" from standard procedures, the United Nations agency said in a letter dated Jan. 29. A copy of the letter, addressed to Avinash Waghale, manager of Cadila's vaccines business, was posted on the WHO's website. (http://bit.ly/1MlC05K)

Cadila's staff at the plant falsified multiple quality control records and reports to hide contamination, and failed to implement a quality assurance system, the WHO said. Sterility failures were also not reported, nor investigated, the agency said among a series of concerns outlined in the letter.

The Cadila case is yet another instance of international organizations or regulatory bodies criticising Indian drug-making facilities over manipulation of data and failing quality control standards. Dozens of Indian drug plants in recent years have been barred from supplying to the United States.

The Moraiya plant produced the Lyssavac-N rabies vaccine, which the WHO has been procuring to supply to various countries since Cadila got regulatory approval in 2008.

Cadila stopped production of the vaccine at the plant and began a recall of all batches it made there since April 2015 after getting the notice in November, the WHO said. It also sells the vaccine in India.

In a statement late on Tuesday, Cadila said it did not expect a significant impact on its business, and does not sell the vaccine in the United States.

Cadila also makes injectable drugs for the United States at Moraiya, but it said that plant was separate. Analysts at brokerage Edelweiss, however, said problems outlined by the WHO were reflective of "system-wide issues."

Cadila has twice received U.S. Food and Drug Administration (FDA) warnings over faulty manufacturing practices at Moraiya, which makes up 60 percent of its U.S. revenue.

While Cadila responded to the WHO in December with a plan to fix the issues highlighted, the agency said in the January notice that "critical and major observations" remained of concern.

Addressing data fraud at the plant, Cadila told the WHO that the microbiologist on site was "casual in his approach towards work", and there was a "lack of supervision by the laboratory head," the WHO notice said.

Cadila's shares were down 2 percent at 0954 GMT on Wednesday, after earlier falling as much as 5 percent.

(Reporting by Zeba Siddiqui in Mumbai; Editing by Muralikumar Anantharaman)