Indoco Remedies surges 43% in two days as Goa plant clears USFDA inspection

The stock surged 20% to Rs 239 on the NSE in early morning trade on Monday, rallying 43% in past two trading sessions.

Shares of Indoco Remedies rallied 20% to Rs 239 apiece on the National Stock Exchange (NSE) in early morning trade on Monday, surging 43% during the past two sessions after the pharmaceutical company said the US health regulator cleared inspection of the company’s Goa plant II & III with two minor observations.

“The US Food and Drug Administration (USFDA) inspected the company’s sterile facility (plant II) and solid dosages facility (Plant III) situated at Goa from 14th November till 21st November 2018. The inspection concluded with the company receiving 2 minor observations, none of which are repeat in nature,” Indoco Remedies said in a press release.

This facility had received a warning letter from the USFDA in March 2017.

This development will pave the way for approval of the company’s pending abbreviated new drug applications (ANDAs) with the consequent boost to revenues from the US market.

Indoco Remedies had reported a net loss of Rs 199 million for the first six months (April-September) of the current financial year 2018-19, as compared to a loss of Rs 20 million in the same period of previous fiscal 2017-18.

In domestic formulations business, Indoco recorded 7.2 % growth in the first half which is closer to the Industry growth. On the international business front, the recent MHRA inspections at the company’s facilities have gone well and it will soon see a revival in exports, the company said.

“Going forward, the company’s business from US is expected to grow speedily as ANDAs will be commercialized at regular intervals after resolution of USFDA’s warning letter. Reinstatement of the MHRA compliance certificate for Goa Plant I and EU approval of newly acquired solid dosages manufacturing facility at Baddi (Plant III) will also boost the EU business. Indoco is also consolidating its position in the Emerging Markets through active brand promotion. Robust pipeline in multiple dosage forms will enable the company to have an upper edge over its competitors in the international business,” Indoco Remedies said in the annual report.

Shares of Indoco Remedies have rallied 60% from its 52-week low of Rs 148 touched on October 8, 2018.

At 09:53 am, the stock was trading 14% higher at Rs 229, as compared to a 0.09% rise in the Nifty 50 index. A combined 607,005 equity shares changed hands on the counter on the BSE and NSE.