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Sun Pharmaceuticals Industries has dipped 7% to Rs 731 on the National Stock Exchange (NSE) in early morning trade after the company said that it has received a warning letter from US Food and Drugs Administration (FDA) for its manufacturing facility located in Halol in Gujarat. This follows the FDA inspection at the Halol plant last September.
Since the inspection in September 2014, Sun Pharma has communicated regularly with the US FDA on the progress of its remediation and on issues of product supply. It has provided periodic updates to the US FDA on its commitments, Sun Pharma said in a in a release.
Post the September 2014 inspection, the US FDA has withheld future product approvals from the Halol facility. This situation may continue until all issues are resolved. Sun Pharma expects to request a re-inspection by US FDA upon completion of its remediation commitments, it added. CLICK HERE TO READ FULL REPORT.
At 09:19 am, the stock was down 6% at Rs 742 on the NSE as compared to 0.02% rise in the Nifty 50 index. A combined 2.84 million shares changed hands on the counter on the NSE and BSE.
Since the inspection in September 2014, Sun Pharma has communicated regularly with the US FDA on the progress of its remediation and on issues of product supply. It has provided periodic updates to the US FDA on its commitments, Sun Pharma said in a in a release.
Post the September 2014 inspection, the US FDA has withheld future product approvals from the Halol facility. This situation may continue until all issues are resolved. Sun Pharma expects to request a re-inspection by US FDA upon completion of its remediation commitments, it added. CLICK HERE TO READ FULL REPORT.
At 09:19 am, the stock was down 6% at Rs 742 on the NSE as compared to 0.02% rise in the Nifty 50 index. A combined 2.84 million shares changed hands on the counter on the NSE and BSE.
"Despite the warning letter, we see limited downside to our FY17 estimates – our 14-15% growth estimates includes gGleevec, excluding which the US growth is in low-single digits. Our positive view stems from the fact gGleevec has been de-risked, other facilities (~4/5 of US biz) have no/minor observations and Sun would continue to supply key products out of Halol. Reliance on Halol is therefore limited to FY18 injectable filings," said Anmol Ganjoo, an analyst tracking the company at JM Financial in a note.
"While we await the warning letter to gauge the severity of the observations and its potential impact on supplies, the management guidance of remediation in less than 12-15 months prevents us from cutting estimates before the contents of warning letter become public. We retain Buy on the stock," Ganjoo adds.
