Dr Reddy’s slips over 2% after USFDA issues 9 observations for Hyderabad plant

Dr Reddy’s Laboratories stock price declined 2.3 percent in trade on October 13 amid a weak domestic market. The US Food and Drug Administration (USFDA) completed an inspection at the pharma major’s manufacturing facility and issued a Form 483 with nine observations.

The USFDA completed a product specific pre-approval inspection (PAI) at the pharma player’s biologics manufacturing facility. The inspection was conducted from October 4 to October 12 at the firm’s facility in Bachupally, Hyderabad. “We have been issued a Form 483 with nine observations, which we will address within the stipulated timeline,” said Dr Reddy’s.

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A Form 483 is issued by the USFDA to notify the company’s management of objectionable conditions. It is issued towards the end of an inspection when the inspector has observed any conditions that may be seen as violations. Following the issuance of the form, the companies have to respond with a corrective action plan and implement it at the earliest.

Bino Pathiparampil, head of research at Elara Securities said that any material impact due to the observations is not expected.

As of 12.12 p.m, shares of the company are trading at Rs 5,482.80, lower by 0.85 percent on the BSE.

Earlier on October 10, the pharma major and a host of drug makers were named as defendants in an antitrust complaint filed in the US over cancer drug Revlimid.

The complaint, filed by Mayo Clinic, asserted claims under America’s federal and state antitrust laws and other state laws. Mayo Clinic alleged that the defendants improperly restrained competition and maintained a shared monopoly in the sale of brand and generic Revlimid through their respective settlements of patent litigation.

Dr Reddy’s Laboratories stockholding pattern

While Nifty 50 gained 15 percent in one-year, Dr Reddy’s Laboratories gained 29.4 percent. The counter sees low volatility as indicated by the one-year beta of 0.46 percent. The pharma player’s market capitalisation is at Rs 91,504.8 crore.

As of the June quarter shareholding, promoters owned 26.7 percent stake in the firm. FIIs and DIIs held 27 percent and 34.5 percent respectively, while the public owned 11.6 percent.

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