DOW JONES NEWSWIRES 
 

Caraco Pharmaceutical Laboratories Ltd. (CPD) said it would eliminate more than half its work force owing to a voluntary production stoppage after the U.S. Food and Drug Administration last month seized more than 30 of its generic drugs.

The company, which has about 670 employees, plans to eliminate 350 positions.

Meanwhile, the company said that JPMorgan Chase & Co. (JPM) won't allow it to draw upon its $10 million credit line, which currently is undrawn, until the matter is resolved.

The FDA said it found manufacturing defects at Caraco's plants, including oversized tablets. Last month, Caraco said it expected earnings from its distribution business, which weren't seized, would generate enough profit to cover operating expenses while it resolved the issues and not be impacted by the FDA actions.

Caraco, which develops generic drugs for the prescription and over-the-counter markets, said Monday that its manufactured-product sales of $118.8 million account for about a third of its revenue in the latest fiscal year. Its products include a version of epilepsy treatment Tegretol and a generic copy of the diabetes drug Glucophage.

The company didn't give a time period to resume manufacturing the drugs in question, saying only that it would depend on the outcome of talks with the FDA.

Shares fell 3.2% recently to $3.05. The stock is down nearly 40% the past month.

-By Tess Stynes, Dow Jones Newswires; 212-416-2481; tess.stynes@dowjones.com