Shares of Ranbaxy Laboratories today slid over 5 per cent after it said the American health regulator USFDA has raised concerns about manufacturing practices at the pharmaceutical firm's Toansa plant in Punjab.
After plunging 9.37 per cent to Rs 420 in intra-day trade, the pharma major's scrip finally ended at Rs 438.35, down 5.42 per cent at the BSE.
On the NSE, the stock lost 5.58 per cent to settle at Rs 438.05 for the day.
"While we await more clarity from the management on the exact impact on the financials, especially the OPMs, the company could trade at a huge discount to its peers," said Sarabjit Kour Nangra, VP-Research, Pharma, Angel Broking.
The US Food and Drug Administration's observations regarding the manufacturing practices in the company's plant in Punjab comes after the recent inspection of the facility by the health regulator.
"On Saturday, January 11, 2014, Ranbaxy received the form 483 with certain observations as a result of the recent US FDA inspection at its active pharmaceutical ingredient (API) plant at Toansa, Punjab, India," the company said in a filing to the BSE.
An FDA Form 483 is issued to a company's management at the conclusion of an inspection when an investigator has observed any conditions that in their judgement may constitute violations of the Food Drug and Cosmetic Act and related Acts.
The US FDA has imposed ban on import of medicines manufactured at Ranbaxy's India-based factories into the US, the world's biggest drug market.
"The company is assessing the observations, and will respond to the US FDA in accordance with the agency's procedure to resolve the concerns at the earliest," Ranbaxy Laboratories said.
Last year in September, the USFDA had issued an import alert on drugs produced by Ranbaxy Laboratories at its Mohali plant in Punjab, for violation of current good manufacturing practices.
In May last year, Ranbaxy had pleaded guilty to 'felony charges' relating to manufacture and distribution of certain 'adulterated' drugs made at two units in India to the US authorities and had agreed to pay USD 500 million as penalty.
