* Q2 net profit 1.4 bln rupees vs 4.5 bln year ago
* Three India plants face export restrictions
* Exec says may take over 1 year to resolve regulatory
* Expanding capacity at other India plants
By Aradhana Aravindan and Sumeet Chatterjee
MUMBAI, Oct 25 (Reuters) - Wockhardt Ltd faces a
year or more to get U.S. and British regulators to end curbs on
its shipments of medicines to the two countries, the Indian
drugmaker said on Friday after posting its smallest profit in
Indian firms, which make nearly 40 percent of generic and
over-the-counter drugs for the U.S. market, face more regulatory
woes, including a record fine for Ranbaxy Laboratories
, amid increased scrutiny by overseas regulators.
That has included export restrictions imposed on three out
of 12 Wockhardt plants, including the key Chikalthana and Waluj
factories in western India, in the last six months.
Wockhardt expects its "corrective and remediation plans" to
address the regulatory issues to take about six months, which
will be followed by an inspection by the authorities, said
Managing Director Murtaza Khorakiwala.
"So probably the entire process would take upwards of a year
from now. It could be earlier than that, it could take longer
than that. The situation is very uncertain," he said on a call
Shares in Wockhardt, which makes insulin, painkillers and
generics for treating cardiology and neurological disorders,
ended 1.1 percent lower at 456.35 rupees in the main Mumbai
market, which fell 0.3 percent. The stock is down about
80 percent from a record high hit in March.
Khorakiwala said the company was expanding capacity at some
of its other Indian plants to cushion the impact of the
regulatory actions in two of its largest markets.
It is, however, not likely to be able to generate revenue
soon from a shift to other plants as the products would require
fresh approvals from overseas health regulators, which analysts
say may take two-to-three quarters.
Wockhardt reported a net profit of 1.4 billion rupees ($23
million) for the three months ended Sept. 30, compared with 4.5
billion rupees a year earlier. Revenues fell 11 percent to 12
billion rupees, the company said in a statement on Friday.
"The financial results are not something the market is
looking at. The market is more focused and concerned about the
regulatory actions," said Jagannadham Thunuguntla, head of
research at SMC Global Securities.
"It's not a question of a project or contract loss, but it's
a question of credibility now."
Wockhardt has said a U.S. import alert at its Waluj factory,
imposed in May, could cost it $100 million in annual sales.
Its factory in Chikalthana, India, was earlier this month
hit by the British drug regulator's curb on imports from the
plant over manufacturing deficiencies.
The U.S. Food and Drug Administration has also raised
concerns with Wockhardt about the plant, and the company said it
has responded and has yet to hear back from the agency.
Wockhardt has said it has taken measures to improve quality
oversight at its factories, including the appointment of a new
quality chief, hiring an outside consultant and training staff.