Dr Reddy's rallies after receiving EIR from USFDA

The stock was trading 3% higher at Rs 2,498, after rallying 10% in intra-day trade as the company received EIR from the USFDA for Vishakhapatnam facility, but the inspection has not closed.

Dr Reddy’s Laboratories moved higher by 10% to Rs 2,494 on the BSE at 10:16 AM; after the company said its facility at Vishakhapatnam received Establishment Inspection Report (EIR) from the US health regulator, but the inspection has not closed.

The stock erased most of its gain and was trading 3% higher at Rs 2,498 on the BSE and NSE at 10:42 AM. The trading volumes on the counter more than doubled with a combined 1.07 million shares changed hands in first one-and-half hour of trading on both the exchanges.

Dr Reddy’s Laboratories said in a regulatory filing said that with regard to the US Food and Drug Administration (FDA) audit for the company’s formulations manufacturing facility, at Duvvada, Vishakhapatnam, Andhra Pradesh, the company received the EIR from the US FDA for the said facility.

However, in cover letter to the EIR, FDA has explained that the inspection has not closed, and the site’s status remains unchanged, but the FDA has released the EIR in order to be transparent about its regulatory process.

Dr Reddy’s planning to request a re-inspection in 2018 after further discussion on scheduling with FDA, it added.

On March 8, 2017, the company informed the stock exchanges that the USFDA had issued a Form 483 with 13 observations for the above mentioned facility.

The FDA issues a Form-483 if its investigators spot any conditions that in their judgment may constitute violations of the US Food Drug and Cosmetic (FD&C) Act and related laws.