Lupin has received EIR (establishment inspection report) for the Form 483 on the Goa plant from US Food and Drug Administration (USFDA)’s Jul’15 visit. In our view, this raises chances of clearance of another pending 483 from USFDA’s Mar’16 visit. We believe this should remove major overhang over valuations as Goa accounts for 50% of US supplies & 30% of pending pipeline Jul’15 visit EIR raises chances of Mar’16 483 clearance.
We note that Goa has another pending Form 483 with respect to FDA’s Mar’16 visit to the same plant. However in our view, this EIR raises the chances of Mar’16 483 getting cleared as well because, some of the observations in the Mar’16 Form 483 were repeat observations from the outstanding Jul’15 Form 483 and the standalone/ fresh observations in the Mar’16 Form 483
are not quite material in nature.
This EIR is in line with our view that major regulatory issues at various Indian pharma companies might get resolved over this fiscal year leading to short term re-rating of the sector.