Aurobindo Pharma stock tanks 6% after unit gets warning letter from USFDA

The drop in the share price came after the company announced that its' arm Eugia Pharma Specialties' Unit-III received a warning letter from United States Food and Drug Administration (USFDA).

Aurobindo Pharma stock falls: Pharmaceutical company Aurobindo Pharma dropped as much as 6.39 per cent to hit an intraday low of Rs 1,422 per share on Friday, August 16, 2024.

However, at 10:47 AM, shares of Aurobindo Pharma were off day’s low but continued to trade 2.62 per cent lower at Rs 1,479.45 per share. In comparison, BSE Sensex was trading 0.52 per cent higher at 79,518.81 levels. 

The drop in the share price came after the company announced that its’ arm Eugia Pharma Specialities’ Unit-III received a warning letter from United States Food and Drug Administration (USFDA).

In an exchange filing, Aurobindo Pharma said, “This is further to our communication dated May 25, 2024, about Unit-III, a Formulation manufacturing facility of Eugia Pharma Specialities Ltd., a wholly owned subsidiary of the Company, receiving Official Action Indicated (OAI) status by the USFDA. Subsequent to OAI, the unit has received a Warning Letter.”

 

The company further said this letter will have no impact on the existing supplies to the US markets.

“The company remains committed to work closely with the USFDA and continues to enhance its compliance on an ongoing basis,” Aurobindo Pharma said in a statement.

Aurobindo Pharma is a leading global pharmaceutical company engaged in the manufacturing and marketing of active pharmaceutical ingredients (APIs), generic pharmaceuticals, and related services.

As India’s second-largest pharmaceutical firm and the largest generics company in the US by prescriptions dispensed, Aurobindo Pharma also ranks among the top 10 generic companies in seven out of eleven European countries.

The company operates through two main business segments including Formulations and APIs. 

In the Formulations segment, Aurobindo Pharma produces generics and branded generics, engages in product out-licensing, and offers contract manufacturing services. The company’s integrated operations span from initial development to final commercialisation. It boasts 14 advanced formulations manufacturing facilities located in India, Portugal, Brazil, and Puerto Rico, with 87 per cent of its formulations revenue coming from the US and Europe.

In the API segment, Aurobindo Pharma provides a range of products including penicillins, cephalosporins, anti-retrovirals, anti-infectives, and other non-beta-lactams. The company manufactures these products at 10 API and intermediate facilities.

Aurobindo Pharma exports to over 150 countries worldwide, with 90 per cent of its revenue derived from international markets.

The market capitalisation of Aurobindo Pharma is Rs 86,748.21 crore, according to Bombay Stock Exchange (BSE). The company falls under BSE 200 category.