Dr Reddy’s Laboratories shares tank over 7% after German auditor gives 6 major observations

By: | Published: September 8, 2017 11:50 AM

Shares of the Hyderabad-based drug maker Dr Reddy’s Laboratories tumbled over 7% on Friday after the Regulatory Authority of Germany concluded an audit of formulations manufacturing facility in Duvvada, Visakhapatnam.

The stock of the pharmaceutical firm Dr Reddy’s fell as much as 7.13% to the day’s low of Rs 2,066.15. (Image: Reuters)

Shares of the Hyderabad-based drug maker Dr Reddy’s Laboratories tumbled over 7% on Friday after the Regulatory Authority of Germany concluded an audit of formulations manufacturing facility in Duvvada, Visakhapatnam. The German auditor concluded with six major and zero critical observations. The stock of the pharmaceutical firm Dr Reddy’s fell as much as 7.13% to the day’s low of Rs 2,066.15. It recovered partially but was still trading down 2.96% at 2,159 on NSE.

The Regulatory Authority of Germany (Regierung von Oberbayern), said that the products manufactured at the facility are not currently exported to the European Union (EU). The company will be submitting a corrective and preventive action plan (CAPA) to the authorities, Dr Reddy’s said in an exchange filing. The auditor has cautioned that the facility will receive EU-GMP certification from the Regulator up to November 2018 only when the Regulator approves the CAPA.

Earlier last week, Dr Reddy’s stock zoomed over 9% after the Nasdaq-listed Vivus Inc entered into a settlement agreement with the pharmaceutical firm to resolve a long-pending patent litigation related to weight management capsules Qsymia.

Meanwhile, Sensex and Nifty which opened little higher after yesterday’s muted activity are trading little changed in the mid-morning session. BSE Sensex was trading 0.09% higher at 31,691.32 points while NSE Nifty was trading up 0.13% at 9,942.65 points. The benchmark Sensex added over 101 points to hit the day’s high of 31,763.7 points while Nifty 50 made it at 9,963.6 points.

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