Alkem Lab declines on reports German authorities accuse the company of fudging clinical data

Alkem Laboratories was off 4.23% at Rs 1,279 at 12:04 IST on BSE on reports that German authorities had accused the company of fudging data in some clinical trials.

Meanwhile, the S&P BSE Sensex was up 109.86 points or 0.43% at 25,736.61.

On BSE, so far 40,000 shares were traded in the counter as against average daily volume of 27,800 shares in the past one quarter. The stock hit a high of Rs 1,285 and a low of Rs 1,236 so far during the day. The stock had hit a record low of Rs 1,232 on 26 February 2016. The stock had hit a record high of Rs 1,589 on 5 January 2016. The stock had underperformed the market over the past one month till 13 April 2016, falling 2.43% compared with Sensex's 3.68% rise. The scrip had also underperformed the market in past one quarter, declining 5.43% as against Sensex's 3.11% rise.

The large-cap company has equity capital of Rs 23.91 crore. Face value per share is Rs 2.

Reports suggested that German authorities had accused Alkem Laboratories (Alkem) of manipulating heart readings of patients in some trials for the antibiotic cefuroxime and the brain disorder drug rulizole, following an inspection of the company's plant in Taloja in western India in March 2015. The European Medicines Agency (EMA) is investigating the medicines after Germany reported its findings to EMA and urged it to take action, reports suggested.

In a statement issued on Saturday, 16 April 2016, Alkem said that The Federal Institute of Drug and Medical Devices (BfArM), Germany, and the Health Care Inspectorate (IGZ), Ministry of Health of the Netherlands performed a joint inspection in March 2015 at Alkem's bioequivalence facility at Taloja. The inspection refers to bioequivalence studies conducted for the period between March 2013 and March 2015 and in particular to bioequivalence trials of two products, of which one is commercialized and another is yet to be commercialized, Alkem said. The company will be submitting a suitable clarification to EMA within the stipulated timelines to enable the Committee for Medicinal Products for Human Use (CHMP) take a balanced risk-benefit view with respect to these two products, Alkem said. Currently, sales from Europe contributes less than 1% to Alkem's total consolidated sales for the nine months of FY 2016, the company said.

After the inspection of March 2015 by German regulator, BfArM, Alkem said it has responded to the regulator with a robust remediation plan and has also been implementing several measures which include changes in staffing, upgrading equipment and improving quality assurance systems to ensure proper controls during bioequivalence studies and thorough review of the acquired data.

Alkem Laboratories' consolidated net profit rose 17% to Rs 188.93 crore on 28.6% growth in net sales to Rs 1245.99 crore in Q3 December 2015 over Q3 December 2014.

Alkem Laboratories is the fifth largest pharmaceutical company in India by domestic sales. The developer, manufacturer and seller of pharmaceutical and neutraceutical products including branded generics, generic drugs, active pharmaceutical ingredients (APIs) and nutraceuticals has 14 manufacturing locations in India and two in the US.

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