Lupin hits fresh 32-month low

Shares of Lupin dipped 3% to Rs 1,242, its fresh 32-month low on BSE in intra-day trade, on reported that US health regulator issued eight observations for its Aurangabad plant. The stock is currently trading at its lowest level since August 26, 2014.

The exchange has sought clarification from Lupin with respect to news article appearing on CNBC TV18 on May 9, 2017 titled "USFDA issues 8 observations for Lupin Aurangabad Plant."

The reply is awaited.

“The US Food and Drug Administration (FDA) issued eight observations for its Aurangabad unit, which was inspected between April 17 and 26’ 2017. These observations pertain to some market complaints regarding contamination of the drug and its effect on the consumer, some data relate issues and some manufacturing protocols not being followed,” said Ms. Sarabjit Kour Nangra, VP Research- Pharma, Angel Broking in client note.

The plant is estimated to be contributing around 10-15% of companies US sales. Thus, on the overall basis the plant’s contribution to the overall sales is not that much. Also, company still has time to get back revert to the company on these observations. Thus we are not currently changing our estimates of the company, added Ms. Sarabjit Kour Nangra.

The stock of pharmaceutical company is under pressure in past one month falling 14% since April 5, 2017. On comparison, the S&P BSE Sensex was down 0.10% during the same period.

Lupin on April 28, said recently, the company’s Goa manufacturing facility underwent an inspection by the US Food and Drug Administration (USFDA). The said inspection was completed on April 7, 2017, subsequently to which, the USFDA issued Form 483 citing three observations.

The company is in the midst of putting together a response to address the said observations.

The company has multiple facilities which cater to the US and other advanced markets and undergo periodic routine inspection by the USFDA or other regulators from different countries, in the normal course of business, it added.

At 03:22 pm; the stock was down 2% at Rs 1,254 on BSE against 0.02% rise in the benchmark index. A combined 1.89 million shares changed hands on the counter on BSE and NSE so far.