To opt for outsourced manufacturing for the US market
Jubilant Pharmova announced that the company’s subsidiary, Jubilant Cadista Pharmaceuticals Inc., USA has decided to close the manufacturing operations of its solid dosage formulation facility at Salisbury, Maryland, USA. The expected date of cessation of manufacturing operation and first separations at the said facility will be 17 June 2024. Jubilant Cadista will continue the sales and marketing operations for the US market. The said facility manufactures tablets and capsules for the US market and has the capacity to serve 1.5 billion doses.
Jubilant Cadista is a subsidiary of Jubilant Pharma Holdings Inc., USA, which is held by Jubilant Pharma, Singapore, a wholly-owned subsidiary of the Company.
Over the last few years, the US Generics market has been witnessing significant pricing pressure leading to significant losses at Jubilant Cadista since FY2022 onwards.
In order to move the US generics business to profitability, it has been decided to change the operating model from in-house manufacturing to outsourced manufacturing by selected USFDA-approved CMOs for the US market.
Further, following the status change of Jubilant Generics Limited’s (‘JGL’) Roorkee facility by USFDA to VAI, the company expects the exports from the Roorkee facility to the US market to increase in a meaningful and gradual manner. As of now, the facility is exporting only one product, Risperidone to the US market. JGL is a subsidiary of Jubilant Pharma Ltd, a wholly-owned subsidiary of the company.
These actions are expected to improve the gross margins of the Generics business by reducing manufacturing, quality management, and overhead costs, which will drive the generics business toward profitability. Lastly, the Generics business has plans to scale up revenues in the US market through the launch of new products.
Jubilant Cadista shall continue to explore various options to utilize or sell the said facility’s Land, Building Plant & Machinery in the due course.
The article originally appeared on Business Standard.
