Mumbai: Divi’s Laboratories Ltd on Monday said the US Food and Drug Administration (US FDA) will lift import alert 99-32 issued in March on unit-II of Visakhapatnam plant even as import alert 66-40 on the unit stays.
In March, the US FDA issued an import alert under clauses 99-32 and 66-40 to the company’s Visakhapatnam unit following an audit between 29 November and 6 December 2016.
According to details on the US FDA’s website, import alert 99-32 is issued when a firm refuses an FDA inspection of its facility, while import alert 66-40 is issued to companies that do not comply with good manufacturing practices.
Shares of Divi’s Lab jumped 20% intraday on the news, but came off their highs later as the company has got just a partial relief from the regulator and overall ban on the sale of products from the said unit to the US market continues.
At 2:54pm, the stock was up 8.25% at Rs736.45 on the BSE, while benchmark Sensex index was trading 1.21% higher at 31,740.85 points.
In an investor conference call post the issuance of an import alert in March, Divi’s Lab’s management had said it was unclear why the FDA had invoked clause 99-32 in the import alert.
“Import alert 99-32 is serious because it states the firm refused an inspection. Divi’s has been able to clear it quickly, which is a good sign. There were concerns that because of this clause, the level of scrutiny by FDA would increase in the next audit," said an analyst, who did not wish to be named.
In a stock exchange filing, Divi’s Lab said the company, along with external consultants, specialists and subject matter experts, has taken appropriate remediation measures to address the concerns raised by the FDA and has given detailed responses and updates to the regulator within the stipulated time.
“The company awaits further action from the US FDA in this regard," it said.
When the import alert was issued in March, the US drug regulator had exempted 10 drugs from the ban to avoid any shortages in the market.
North America accounts for 30-32% of the revenue of the Hyderabad-based active pharmaceutical ingredients and intermediates manufacturing company. In financial year 2016-17, Divi’s Lab had a consolidated revenue of Rs4,181crore, as against Rs3,902 crore a year ago.