Dr. Reddy's Laboratories Ltd.'s shares declined as much as 2.6 percent after the U.S. health regulator issued two observations for its active pharmaceutical ingredients manufacturing plant at Srikakulam in Andhra Pradesh.
The company is addressing the observations received via Form 483 of the U.S. Food and Drug Administration (FDA), Dr. Reddy's said in a filing to the stock exchanges late on Tuesday.
The FDA issues a Form 483 if its investigators spot any conditions that in their judgment may constitute a violation of the U.S. Food Drug and Cosmetic Act and related Acts, according to information on the regulator's website.
Srikakulam was the last plant to be inspected, of the three facilities that got warning letters from the regulator in November 2015. The FDA issued thirteen observations to the company's Duvvada formulation manufacturing facility in March, while the Miryalaguda plant received three observations in February.
Srikakulam is a relatively large facility, and with just two observations, we can expect approvals to come in soon, Vishal Manchanda, an analyst at Nirmal Bang Institutional Equities wrote in a note to clients.
...company can now focus its resources and management bandwidth on resolution of warning letter at Duvaada. We also expect that U.S. FDA will have a more accommodating approach towards resolution of Duvaada now. With this news, we expect a bounce back in the stock.Vishal Manchanda, Analyst, Nirmal Bang Institutional Equities
Dr. Reddy's shares pared early losses to trade 0.4 percent lower at Rs 2,733 per share at 10:15 a.m.
Essential Business Intelligence, Sharp Market Insights, Practical Personal Finance Advice, Daily Fuel, Gold and Silver Prices and Latest Stories — On NDTV Profit.
