HYDERABAD: In a setback to city-based Aurobindo Pharma Ltd, the US Food and Drug Administration (FDA) issued a warning letter for violation of goods manufacturing practices at one of its Active Pharmaceutical Ingredient (API) units in Pydibhimavaram, Andhra Pradesh.
Typically, when FDA issues a warning letter, it imposes an export ban on products manufactured from the facility until the company implements remedial measures and resolves the issue with the regulator. Following the development, shares of the country’s second largest generic drugs maker fell nearly 4 per cent to close at Rs 602 on BSE Friday.
The FDA issued the warning letter after inspection of the Aurobindo plant’s Unit XI in February and comes just weeks after the company was slapped Form 483 with critical observations at two of its other API and formulation facilities. However, the company maintained that the latest FDA missive is unlikely to have much impact on its business.
“We believe the existing business from this facility will not be impacted. We will be engaging with the regulator and are fully committed in resolving this issue at the earliest. The company is also committed to maintaining the highest quality manufacturing standards at all of its facilities across the globe,” the company said in a filing with the bourses.
According to analysts, the facility has few product approvals, and hence, the company was unlikely to be affected. However, it is expected that Aurobindo will shift existing products in this facility to other sites over the next 1-2 quarters, subject to necessary approvals. Moreover, it could take time to convince the FDA to withdraw the warning letter, after Aurobindo puts in place remedial measures and after the regulator makes another inspection.
It may be noted that following the acquisition of Sandoz’s dermatology products, Aurobindo emerged as the second largest generic drugs company even in the US, which accounts for a significant part of its business. Revenue from the US market has been clocking robust growth over the past few years, inching closer to $3 billion.
Aurobindo shares fall 4 per cent
Shares of Aurobindo Pharma fell by nearly 4 per cent on Friday after the company received the FDA warning letter. The scrip declined 3.92 per cent to close at H602.35 on the BSE. On NSE, shares of the company fell by 3.85 per cent to close at H603.