Biocon falls 12% in 5 days on one major deficiency alert for API unit

The pharma company said it will respond to the European medical regulator with appropriate corrective and preventive actions within the stipulated time.

Shares of Biocon hit a fresh 52-week low of Rs 263.15, down 2 per cent on the BSE in Wednesday’s intra-day trade. In the past five trading sessions, the stock of pharmaceuticals company has declined 12 per cent after the company said that the European Directorate for the Quality of Medicines and Healthcare (EDQM) found one major deficiency at its Bengaluru active pharmaceutical ingredient (API) plant.

“The European medical regulator conducted a good manufacturing practices (GMP) inspection of its API plant in Bengaluru from 12 September 2022 to 14 September 2022. Post inspection, a list of deficiencies was issued on 5 October 2022,” Biocon said in an exchange filing on October 6.

The pharma company said that there were no critical deficiencies and one deficiency cited under the category 'major'. “The company will respond to the agency with appropriate corrective and preventive actions within the stipulated time. The company remains committed to the quality, safety & efficacy of its products,” Biocon said.

Earlier on August 31, US health regulator issued Form 483 to the company with 11 observations each for its two sites in Bengaluru and six for a plant in Malaysia.

The US Food and Drug Administration (US-FDA) conducted three on-site inspections at Biocon Biologics’ (company's subsidiary) seven manufacturing facilities spanning two sites in Bengaluru, India and one at Johor, Malaysia. These inspections started with the Bengaluru site on August 11, 2022 and concluded with the Malaysia site on August 30, 2022. Biocon had said that the company does not expect the outcome of these inspections to impact the current supply of its products.

Meanwhile, on September 6, Biocon divested a 21.78 million shares or 5.4 per cent stake in its research subsidiary, Syngene International for Rs 1,220 crore via bulk deal.

Currently, Biocon is trading at its lowest level since March 2020. In the past three months, the stock has declined 20 per cent, as compared to 6 per cent rally in the S&P BSE Sensex. Further, in the last six months, it has slipped 25 per cent, as against 2.5 per cent fall in the benchmark index.