Lupin dropped 7.5% to Rs 1,383 at 15:15 IST on BSE, paring losses in volatile trade after the company clarified that it does not expect any disruption to product supply from the Mandideep location.
The clarification was issued by the company during market hours today, 29 March 2016.Meanwhile, the S&P BSE Sensex was down 59.20 points or 0.24% at 24,907.20.
A sharp fall on the counter was accompanied with high volumes. On BSE, so far 17.07 lakh shares were traded in the counter as against average daily volume of 2.81 lakh shares in the past one quarter. The stock hit a low of Rs 1,294.05 so far during the day, which is also a 52-week low for the counter. At the day's low, the stock slumped 13.45%. At the day's high of Rs 1,494, hit so far during the day, the stock rose 0.08%. The stock had hit a record high of Rs 2,127 on 6 October 2015. The stock had underperformed the market over the past one month till 28 March 2016, dropping 13.45% compared with the Sensex's 7.83% rise. The scrip had also underperformed the market in past one quarter, falling 18.79% as against Sensex's 4.1% fall.
The large-cap company has equity capital of Rs 90.12 crore. Face value per share is Rs 2.
Lupin in its clarification said that there were a total of three observations made by the United States Food & Drug Administration (USFDA) after the inspection was carried out by the USFDA of Mandideep manufacturing facility in Madhya Pradesh between 2 February to 19 February 2016. Two separate form 483s were issued by the USFDA as the facility has both dosage form unit and active pharmaceutical ingredient (API) unit with two observations each for these units. One of the observations was repeated in both the forms as it was relevant to both operations. The company believed that these observations are minor in nature and have already been adressed. The company believes that the outcome of the audit by the USFDA will be voluntary action indicated only and there will be no remediation required.
Lupin said it does not expect any disruption to product supply from the Mandideep location and that there are no pending applications from the facility.
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The company further said that one of the observations erroneously quoted in news reports relates to the use of non-conforming intermediate for making API prior to 2015. This was done based on laboratory trials and scientific rationale that further processing steps were capable of producing desired quality API. All API batches and drug product batches manufactured using such APIs complied with the specifications and hence were released to market, Lupin said. Appropriate corrective and preventative actions were already implemented in 2015 and were verified by the USFDA investigator, the company said. As an abundant precaution, the company has recalled batches manufactured from this period. There is no material financial impact of the recall, according to Lupin.
Shares of Lupin slumped earlier during the day after reports suggested that API and formulations units of Mandideep manufacturing facility in Madhya Pradesh have received two observations each after the facility was inspected by USFDA.
Mandideep manufacturing facility is reportedly the second largest revenue contributor to the company's US business after its Goa plant.
On consolidated basis, Lupin's net profit fell 11.9% to Rs 529.75 crore on 6.8% growth in net sales to Rs 3357.66 crore in Q3 December 2015 over Q3 December 2014.
Lupin is a pharmaceutical company producing and developing a wide range of branded & generic formulations, biotechnology products and APIs globally. The company is a significant player in the cardiovascular, diabetology, asthma, pediatric, CNS, GI, anti-infective and NSAID space and holds global leadership positions in the anti-TB and cephalosporin segment.
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