Shares of Lupin Ltd fell about three percent on Thursday on the back of reports that the drug manufacturer is under the USFDA (United States Food and Drug Administration) lens again. The pharmaceutical major has received five observations from the American drug regulator for the third unit of its manufacturing facility at Pithampur, Madhya Pradesh, CNBC-TV18 reported.
“There is a failure to thoroughly review any unexplained discrepancy whether or not the batch has been already distributed,” USFDA has reportedly told the company.
Following the development, the stock slipped 2.83 percent on the NSE to close at Rs 1,065, its lowest level in three years.
The observations made by the USFDA for the Pithampur unit are the failure to review any unexplained discrepancy, not establishing control procedures, taken samples not representative in nature, acceptance criteria for sampling non-adequate and appropriate controls not been exercised.
“There is some confusion about the kind of contribution the two drugs, Fortamet and Glumetza are making in terms of US topline. So once contribution from these products will go down significantly, we will come to know the strength of the base business of Lupin and once market realises that then obviously stock will bounce back,” Amey Chalke, Research Analyst at HDFC Securities told CNBC-TV18 in a telephonic interview.
Chalke added that the Pithampur plant is an important manufacturing facility for Lupin Ltd and so it is very important for the drug maker to come out of this regulatory issue. Notably, Lupin has been facing heat from USFDA for some months now. The US regulator had given observations on the company’s Goa plant, the most important with respect to imports to the US, in April. In May, the Indore unit of the pharmaceutical manufacturer received six observations from USFDA.