Pharmaceutical major Cipla's shares dropped by 2.13 per cent today amid speculation that the company's Indore plant has come under the scanner of US health regulator for manufacturing norms violations.
While the company, whose shares closed at Rs 672.45 today, declined to share details of the US Food and Drug Administration (USFDA) observations, brokers said as many as nine issues have been raised by the regulator under 'Form 483' regarding manufacturing practices in the plant.
As per USFDA guidelines, Form 483 notifies a company's management of objectionable conditions following inspection of manufacturing plant or units.
A company is required to respond to the USFDA in writing with its corrective action plan and then implement that corrective action plan expeditiously.
When contacted, a Cipla spokesperson said: "As part of the routine course of business, pharmaceutical companies receive observations from regulators ranging from minor to major issues."
As a policy, Cipla does not disclose specific details on observations. To date, the company has successfully responded to past observations, and continues to work towards implementing all corrective actions on high priority, the spokesperson added.
It's been reported that the observations are not data integrity related and should not lead to serious consequences for the company. While the exact sales from the Indore plant are not known, US contributed around 8 per cent of its overall sales in FY2015, Angel Broking VP (Research - Pharma) Sarabjit Kour Nangra said.
According to reports, USFDA had sent letter to the company after its officials conducted inspection of the Indore plant between July and August.
