Dr Reddy’s shares rise on USFDA clearance for Telangana API unit
Mumbai: Shares of Dr. Reddy’s Laboratories Ltd rose nearly 3% on Wednesday as the company’s active pharmaceutical ingredients (API) unit at Miryalaguda in Telangana got clearance from the US Food and Drug Administration (USFDA).
In a stock exchange filing late Tuesday, the company said it has received Establishment Inspection Report (EIR) from the USFDA for its Miryalaguda unit that was issued a Form 483 in February, which means closure of the audit.
An EIR is issued by the USFDA on successful completion of a site inspection.
Dr Reddy’s shares closed higher at Rs2,665 apiece on the BSE,up 1.40% from the previous close (after touching Rs2,698.00 in the intra day trading), while the benchmark Sensex closed higher by 0.17% at 31,156 points.
Miryalaguda plant is one of three facilities that received a warning letter from the USFDA in November 2015 for violation of good manufacturing facilities. After a re-inspection of the unit in February this year, the US drug regulator had issued Form 483 with three observations relating to lapses in quality.
The company did not specify whether a warning letter for the Miryalaguda is lifted or not.
The other two facilities that were issued a warning are an API plant at Srikakulam and an oncology formulations plant at Duvvada in Visakhapatnam. Both these plants underwent re-inspection during February and March this year and were issued Form 483s. They are yet to get FDA’s clearance.
The FDA issues Form 483 if its investigators spot any conditions that in their judgement may constitute violations of the US Food Drug and Cosmetic (FD&C) Act and related Acts.
The regulatory issues have affected the Hyderabad-based pharma major’s earnings as new product approvals in the US from the three units were held back. The US is the biggest market for the company. In 2016-17, consolidated revenue declined 9% on year to Rs14,080.9 crore, while net profit fell 40% to Rs1,203.9 crore.