Cipla tanks almost 7% as USFDA’s letter flags data issues at Madhya Pradesh unit

According to a CNBC-TV18, the warning letter has underlined data integrity issues at Cipla embedded with product complaints and microbial contamination

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The Cipla stock was trading almost 7 percent lower on November 23 after CNBC-TV18 reported details of the warning letter issued to the firm’s Madhya Pradesh unit by the United States Food and Drug administration.

In an exchange filing on November 18, the pharma company said it received a warning letter from the USFDA for routine good manufacturing practices (GMP) inspection at its Pithampur facility between February 6 and 7, 2023.

According to the CNBC-TV18, the warning letter underlined data integrity issues at Cipla embedded with product complaints and microbial contamination.

The US health regulator mentioned similar and repeated observations for Cipla’s facility earlier. The Goa facility is under “Official Action Indicated” status, impacting product approvals from the facility meant for the US market.

The report added that the USFDA asked Cipla to take help of third-party consultants to address the issue.

Moneycontrol couldn’t verify the report independently.

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Talking to media after announcing Q2 results, the management said the USFDA observations on Pithampur and Goa facilities was delaying launch of products by six months.

“We are delayed by six months, from where we could launch, to the time we will,” MD and Global CEO Umang Vohra has said. The process of shifting the manufacturing of the products to other plants was ongoing for the four to five months.

ALSO READ: US FDA plant observations at Cipla cause 6-month delay in product launches: CEO

In the September quarter, Cipla reported a 43.3 percent year-on-year rise in consolidated net profit at Rs 1,131 crore, while it clocked highest-ever revenue from the US at $229 million.

Analysts at Prabhudas Lilladher maintained a “buy” call on the counter, with a target price of Rs 1,350 a share based on 24 times September 2025E EPS.

“We expect 17 percent EPS compounded annual growth rate (CAGR) over FY23-26E. However, any further FDA escalation to Indore unit and erosion in key products in US will be key risk to our call,” the brokerage firm said.

At 11.23 am, the stock was trading at Rs 1,188.05 on the National Stock Exchange, down 6.56 percent from the previous close. In the past week, the stock has declined over a percent.

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