The shares of Sun Pharmaceutical Industries ended lower on the bourses on Monday after the company said that the US drug regulator may not give the green signal for the export of new products from its Halol facility to the US.

In a late evening announcement on Sunday, the country’s largest pharmaceutical company had said that the US Food and Drug Administration (USFDA) has classified its Halol facility in Gujarat as official action indicated (OAI).

The OAI classification implies that the USFDA may withhold approval of any pending product applications or supplements filed from the facility till the outstanding observations are resolved. Supplies to the US from its Halol unit contribute around 3-4 per cent of the company’s consolidated revenues.

“The company has received a communication from the USFDA indicating that the Halol facility has been classified as OAI,” Sun Pharma said in a filing to the stock exchanges.

The Sun Pharma scrip fell almost seven per cent on the BSE on Monday in intra-day trades to Rs 315.30. However, it recovered partially from these lows to end at Rs 335.65, a drop of 1.33 per cent over the last close.

Sun Pharma added that it continues to manufacture and distribute existing products for the US market and that the development is unlikely to have any adverse impact on the current business from the facility.

According to the company, the OAI status implies that the USFDA expects further corrective actions to be undertaken. “Interalia, the OAI status normally implies that the USFDA may put all new approvals from the Halol facility on hold till the outstanding corrective actions are completed,” it noted, while pointing out that 19 ANDAs (applications for generic drugs) are pending approval from Halol to the US market.

“Sun Pharma continues to co-operate with the USFDA and will undertake all necessary steps to resolve these issues and to ensure that the regulator is completely satisfied with the company’s remedial action,” it said.

while adding that presently it is difficult to give any timeline for resolution.

Once a facility is classified as OAI, it requires a re-inspection to clear the status. However, the final decision rests with the USFDA.

The company had earlier disclosed the USFDA had inspected the facility from December 3-13, 2019 and had issued eight observations. Since then, Sun Pharma has been working with a third party consultant for resolution of the matter.