USFDA issues import alert on Ranbaxy’s Mohali plant, shares dive over 30%
In yet another setback to Ranbaxy Laboratories, the US Food and Drug Administration has issued an import alert on drugs produced by the company at its Mohali plant in Punjab, for violation of current good manufacturing practices.According to information available on the USFDA website, the import alert, dated 13 September, will cover all ‘drugs and drug products’ produced by the company at the Mohali plant.
Reacting to the news, shares of the drug major slumped 35 per cent to Rs 297.25 in intra-day trade at the BSE. They finally ended at Rs 318.85, down 30.27 per cent from previous close. At the NSE, the stock plunged 30.03 per cent to settle at Rs 319.90. A massive sell-off in the stock sent the company's market value down by Rs 5,855 crore to Rs 13,491 crore. 'Ranbaxy has seen volatility over the past few weeks.
Monday's fall may generate fresh buying interest from value buyers in the stock,' said Milan Bavishi, Head Research, Inventure Growth and Securities. Karvy stock broking analyst Rahul Sharma feels that the import alert for the Mohali plant is a major negative for the company. 'The company has had around 18 filings since 2009 from this facility. We believe this would take a very long time, considering the past record of Consent Decree,' he said.
Without specifying the details, USFDA said 'detention without physical examination may be appropriate when an FDA inspection has revealed that a firm is not operating in conformity with current good manufacturing practices (GMP's)'. When contacted, a Ranbaxy spokesperson said: ‘We have so far not received any communication from the USFDA on this subject. We are seeking information from the USFDA in this regard.’
In May this year, Ranbaxy had pleaded guilty to ‘felony charges’ relating to manufacture and distribution of certain ‘adulterated’ drugs made at two units in India and agreed to pay $500 million to US authorities as penalty.
Reacting to the news, shares of the drug major slumped 35 per cent to Rs 297.25 in intra-day trade at the BSE. They finally ended at Rs 318.85, down 30.27 per cent from previous close. At the NSE, the stock plunged 30.03 per cent to settle at Rs 319.90. A massive sell-off in the stock sent the company's market value down by Rs 5,855 crore to Rs 13,491 crore. 'Ranbaxy has seen volatility over the past few weeks.
Monday's fall may generate fresh buying interest from value buyers in the stock,' said Milan Bavishi, Head Research, Inventure Growth and Securities. Karvy stock broking analyst Rahul Sharma feels that the import alert for the Mohali plant is a major negative for the company. 'The company has had around 18 filings since 2009 from this facility. We believe this would take a very long time, considering the past record of Consent Decree,' he said.
Without specifying the details, USFDA said 'detention without physical examination may be appropriate when an FDA inspection has revealed that a firm is not operating in conformity with current good manufacturing practices (GMP's)'. When contacted, a Ranbaxy spokesperson said: ‘We have so far not received any communication from the USFDA on this subject. We are seeking information from the USFDA in this regard.’
In May this year, Ranbaxy had pleaded guilty to ‘felony charges’ relating to manufacture and distribution of certain ‘adulterated’ drugs made at two units in India and agreed to pay $500 million to US authorities as penalty.