Aurobindo Pharma gets warning letter from USFDA for Andhra facility

Aurobindo Pharma share price fell as much as 7.7 per cent to Rs 578.75

Aurobindo Pharma has received a warning letter on June 20 from the US Food and Drug Administration (US FDA) for Unit XI, active pharmaceutical ingredient (API) unit in Srikakulam district of Andhra Pradesh.

This is a major adverse regulatory outcome ever faced by the company in recent times. Last month, two of its other API and formulation facilities had received Form 483 with critical observations, which the company said would have no bearing on its business. Stocks fell 3.92 per cent to close at Rs 602.35 on the BSE. During the day, it dropped 7.68 per cent to Rs 578.75. 

The company, in a filing, said the latest USFDA action would not have any impact on its existing 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 firm is committed to maintaining the highest quality manufacturing standards at all of its facilities,” Aurobindo said.

Senior HDFC Securities analyst Amey Chalke said the development would not have any material impact as there were very few product approvals pending from this unit. 

Chalke, however, said it could be a long haul when it comes to convincing the USFDA with the necessary corrective measures to withdraw warning letter.

“Though the USFDA decision will not have a material impact, it will certainly have a sentimental impact as people may fear the company would get similar regulatory actions pertaining to the other sites where the inspection outcomes are pending,” he said.

The warning letter puts export ban on products involving this API unit till all the issues get resolved to the satisfaction of the regulators through remedial measures.