Caraco Pharmaceutical Labs announced on Monday that it will eliminate half its workforceâ€”approximately 350 positionsâ€”but added that the number could grow as the generics firm deals with a voluntary manufacturing shutdown stemming from an FDA investigation.
Last month, US marshalls seized an undisclosed amount of drug ingredients and products in a raid at the companyâ€™s Michigan manufacturing plant. The search and seizure was conducted in response to an FDA inspection that unearthed a number of violations. Caraco said in a statement that, â€œcorrective actions have been made and continual improvements are in process.â€
â€œWhile we have not fully determined the impact of this action by the FDA on our financial condition, we believe that it may have a material adverse effect on our near term operations,â€ that company stated after the raid.
The company canâ€™t manufacture product at that plant until FDA gives it the green light. Even worse, JP Morgan Chase has frozen Caracoâ€™s $10 million line of credit until the fracas with FDA is over.
â€œThe timing of the resumption of manufacturing operations, in whole or in part, depends on the outcome of discussions with the FDA,â€ a Caraco spokesperson stated. â€œThis should have no effect on distributed product sales that we market in the US. The company may recall some employees to assist us in any remedial action plan that is developed based on such discussions.
In related news, Caraco on Tuesday launched a generic version of the anti-androgen Casodex (bicalutamide) on behalf of Sun Pharma.