Regulatory concerns drag Glenmark, Aurobindo Pharma, Lupin shares to 52-week low1 min read . Updated: 07 Oct 2019, 04:22 PM IST
- Of the three companies, two saw a double-digit fall in today’s deals
- Shares of Glenmark pared early losses, ending down 9.5%, while that of Lupin closed down at over 3%
New Delhi: Owing to concerns around regulatory observations, shares of major pharmaceutical companies--Aurobindo Pharma Ltd, Glenmark Pharmaceuticals Ltd, and Lupin Ltd slumped in Monday’s trade, hitting a low of 52 weeks. This weighed on the Nifty Pharma index, which ended down over 3% today.
Of the three companies, two saw a double-digit fall in today’s deals. While shares of Aurobindo Pharma traded at a 52-week low of ₹462.15, Glenmark was down at ₹269.75. Lupin hit ₹646.20 today.
Shares of Aurobindo Pharma plunged, ending down more than 20% today after the US Food and Drug Administration (US FDA) made adverse observations on the drugmaker not following adequate manufacturing processes in its Polepally plant in Telangana. The regulator also said the company did not fully follow responsibilities and procedures for quality control while production.
In similar observations, the US FDA sent a warning letter to the company’s Baddi manufacturing plant in Himachal Pradesh. The warning letter came in the wake of adverse observations during an inspection in April. The company, however, does not expect a significant financial hit from the warning letter, as there are no major pending product approvals from the facility in the next 12 months.
According to a Mint report, the Central Pollution Control Board (CPCB) is likely to tweak waste treatment rules for pharmaceuticals companies that would reduce the time taken to get environmental approvals for change in product mix. CPBC is examining a proposal to change effluent treatment norms after the Indian Drug Manufacturers’ Association sought tweaks to existing regulations that act as hurdles to manufacturing. This, however, failed to cheer the investors.
The US FDA also made adverse observations in Dr Reddy’s Laboratories’ bulk drug manufacturing plant 2 at Bollaram near Hyderabad, indicating closure of the audit done in July. The inspection, however, indicated that the observations did not require immediate redressal as they were made in a Form 483 as Voluntary Action Initiated. The stock ended largely flat at ₹2,625 today.
Shares of Glenmark pared early losses, ending down 9.5%, while that of Lupin closed down at over 3%.