Mumbai: Sun Pharmaceuticals on Friday plunged as much as 18% in the morning trade on the Bombay Stock Exchange after the US health regulator seized drugs from the Michigan facilities of Caraco, a subsidiary of the domestic pharma company.
Shares of Sun Pharma opened weak on the BSE and lost further ground and plunged to a low of Rs1,070, down 17.59% over the previous close.
The US Food and Drug Administration (FDA) yesterday seized all drug products manufactured by generic drug maker Caraco Pharmaceutical at its Michigan facilities in Detroit following repeated violations of the manufacturing standards.
“This action follows Caraco’s continued failure to meet the FDA’s current Good Manufacturing Practice (GMP) requirements, which assure the quality of manufactured drugs. Through this seizure, the FDA seeks to immediately stop the firm from further distributing drugs until there is assurance that the firm complies with good manufacturing requirements,” the US FDA said in a statement.
Following the announcement, shares of Caraco plunged 43% at $2.39 on the American Stock Exchange yesterday.
In 1997, Sun Pharma acquired a majority stake in Caraco and subsequently, the two companies entered into a technology transfer agreement.