New Delhi: Aurobindo Pharma Ltd shares plunged as much as 19% in intra-day trade on Monday, i.e. 7 October, after the US health regulator issued adverse observations on the company’s manufacturing facility in Telangana.
At 3:10pm, shares of Aurobindo Pharma were trading at Rs 460.85, down 18.8%, after hitting an intra-day low of Rs 459.20. The stock has lost 23% in the last one year.
According to reports, the US Food and drug Administration (FDA) had conducted an inspection at Aurobindo’s Unit-7 between 19 September and 27 September 2019, after which a note was issued by the regulator indicating procedural lapses along with lack of quality control.
The Form 483 (inspection report) issued by the US FDA made the following seven observations about Aurobindo Pharma’s Unit-7: 1) Failure to review any unexplained discrepancy; 2) failure to consider failure of batch or components; 3) Control procedures not established; 4) No written procedures for production and process controls; 5) Equipment and utensils not cleaned at appropriate levels; 6) Procedures applicable to quality control not thoroughly followed; and 7) Written production and process controls not developed in execution of production, process controls.
Amey Chalke, pharma analyst at HDFC Securities, told BloombergQuint that Unit-7 was important for Aurobindo Pharma as there were more than 130 product approvals in place from the facility, with over 30 still pending with the US FDA. The revenue contribution could be close to 25-30% to the total US sales. Some of the observations may take some time to resolve, delaying the product approvals from the unit, added Chalke.
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