Granules India Drops The Most In Two Months On Regulatory Concern
Granules India dropped as much as 12.9% after Portugal drug authority inspection
Shares of Granules India dropped as much as 12.9 percent to Rs 97.75, a level last seen on November 9, 2016. The pharma firm, which was also the worst performer on Nifty 500 Index, fell to Rs 97.75 after its Telangana plant received eleven observations from Portugal drug regulator Infarmed.
The observations were made after nonconformities were detected in the good manufacturing practices system related to the granulation activity and primary packaging of tablets.
The drug regulator has asked for the suspension of the commercialisation and immediate collection of the batches of medicines listed.
The Gagillapur facility in Telangana manufactures pharmaceutical formulation intermediates (PFIs) and finished dosages (FDs).
In its response in a press release to the stock exchange, the company said it had “initiated necessary steps to address the observations of the inspection agency and will submit its response with a corrective and preventive action plan within the stipulated time.” The company will also be requesting Infarmed for re-inspection of the Gagillapur facility at the earliest.
Granules earned about 26 percent of its second quarter revenues from Europe, and 63 percent from the PFI and FD verticals.
The Gagillapur plant is one of Granules’ six plants in India, and the only plant in India manufacturing PFIs and FDs. The other plant that manufactures these is located in Virginia, U.S.
The plant has also been approved by various global regulatory authorities such as the U.S. FDA, COFEPRIS (Mexico) and TGA (Australia). There is now a risk of this regulatory action expanding if other agencies also decide to inspect the plant.
In late December, the U.S. Food and Drug Administration had inspected the pharma company’s Vizag-based joint venture facility and had given seven observations.
A spate of regulatory inspections and its unfavorable outcomes have come back to haunt the Indian pharmaceutical companies, starting with Dr Reddy’s Laboratories getting warning letters from U.S. FDA for three of its plants in November 2015. The NSE Pharmaceuticals Index clocked its worst yearly performance in eight years, dropping 14.2 percent in 2016.