Core Viewpoint - Huahai Pharmaceutical received a warning letter from the FDA due to issues found during an inspection of its Linhai Xunqiao production base, which may affect future ANDA applications but will not significantly impact current performance [2][3]. Group 1: FDA Warning Letter - The warning letter was issued following an FDA inspection from January 16 to January 24, 2025, which identified problems related to cleaning management of oral solid production equipment, maintenance of sterile production areas, and the adequacy of tablet rejection parameter studies [2]. - The company has acknowledged the FDA's suggestions and is taking measures to optimize its operations while maintaining active communication with the FDA [2]. Group 2: Historical Context and Previous Performance - The Linhai Xunqiao production base previously passed FDA inspections with zero defects, highlighting its compliance history [3]. - In 2020, the sales revenue from formulation products produced at the Linhai Xunqiao base in the U.S. was 780 million yuan, while the revenue from active pharmaceutical ingredients (APIs) was 27.6651 million yuan [3]. - For 2024, the U.S. formulation business is projected to generate approximately 1.279 billion yuan in sales, reflecting a year-on-year decline of 6.51%, although the average gross margin of products has been improving [3]. Group 3: Previous Warnings and Compliance - In 2018, the company received a warning letter from the FDA regarding its Chuan Nan plant, citing issues such as failure to ensure quality-related complaint investigations and not assessing the impact of process changes on API quality [4]. - The 2018 warning was linked to the detection of a potential carcinogen in an API, which raised concerns about the company's production methods [5]. - The FDA lifted the warning for the Chuan Nan production base by the end of 2021, allowing products from this facility to re-enter the U.S. market [5].