Aurobindo Pharma's Unit 4 has been Problem 1 for the company with the US FDA for a while. The company received multiple FDA observations after an inspection of the Unit 4 site in November 2019, following which Aurobindo submitted what it called a "comprehensive response" with the FDA. However, the FDA has now withdrawn the 90-day voluntary action indicated (VAI) status given to Unit 4, causing the company's share price to skid.

Unit 4 accounts for 7-8% of US sales and is the site for the firm's injectables/opthalmic production. The injectables business has been a growth area for Aurobindo Pharma, and witnessed a growth of 24% YoY to $76 million in the latest quarter. 

In the earnings call, the management had been optimistic. MD N Govindarajan had said, "There are certain CAPAs (Corrective and Preventive Actions) required from the FDA to the best of my memory, that would get concluded by April-May timeline. We have around 15-products (from Unit 4) which would be approved over the next one year." An OAI from the FDA could however, delay pending approvals of orders from the plant. Of the total 122 Injectable ANDAs as on 31st December 2019, 73 have received final approval and the balance 49 are under review. 

The company had said at the time that it did have a Plan B in place to bring more redundancy in the injectables business. "We are coming up with another low-volume, high-value set up in US", Aurobindo Pharma had noted. However, that is expected to take another year to come online as a production unit. 

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