Cipla shares fall after FDA suspends license of Patalganga unit for 10 days

Cipla said that it wasn’t in agreement with the FDA rulings and will appeal against the order to the state government.

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Shares of Cipla fell over 1 percent in early trade on August 17 after the Konkan division of the Food and Drugs Administration (FDA) ordered for the suspension of the license issued to the company’s Patalganga manufacturing unit for 10 days in December 2023.

The order was a result of non-conformance of good manufacturing practices at the said facility under the Drugs and Cosmetics Act 1940.

At 09.19 am, shares of Cipla were trading a percent lower at Rs 1,228.55 on the National Stock Exchange.

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‘No material impact’

Regardless, the company also announced that it was not in agreement with the FDA rulings and the basis given for the said suspension. Consequently, the drugmaker will also appeal against the order to the state government.

To further ease investor concerns, the company also stated that the suspension will have no material impact on financials, operations
or other activities.

Meanwhile, Cipla has been making the rounds in news headlines recently amid reports that the world’s largest private equity fund Blackstone was in talks to acquire the stake of the company’s promoters, the Hameid family.

Though the firm has shunned these reports as market speculations, investors remain enthused by the possibility of PE investors taking over the pharma company.

Moneycontrol had also reported on August 10, citing sources that Blackstone has submitted a non-binding bid along with its LPs (limited partners) to acquire control in Cipla with the promoter Hamied family in stake sale mode.

Against this backdrop, shares of the drugmaker have shot up nearly 20 percent in the past month.

Also Read | Blackstone along with LPs submits non-binding bid to acquire control in Cipla

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