Cadila growth may take a hit as Moraiya facility comes under USFDA radar

Krishnanath Munde at Reliance Securities says he does not expect any new drug approval from the facility till it gets regulatory clearance.

The Cadila Healthcare stock has corrected over 6 per cent in two days, following the warning Letter from the USFDA for its Moraiya plant (Gujarat). Some regulatory action was expected after the plant received OAI (official action indicated) status in August, following inspections from April-May 2019.

However, given that the plant is under the ‘warning letter’ from the US drug regulator, it will have a bearing on future growth prospects. This is because the facility contributes 50 per cent to Cadila’s US sales, and accounts for one-third of its ANDA pipeline (32 abbreviated new drug applications pending approval), say analysts.