Biocon slips after USFDA observations

Biocon fell 1.16% to Rs 225.35 after the company received eight observations from the US drug regulator.

The United States Food and Drug Administration (USFDA) conducted a pre-approval inspection (PAl) at two of the company's new biologics manufacturing facilities in Bengaluru from 10 to 19 September 2019. The inspection included a new drug substance (DS) and a drug product (DP) unit. At the conclusion of the inspection, Biocon received a Form 483 with four observations for the new DS facility, three observations for the new DP facility and one general observation. The company said it is confident of addressing these observations effectively through a corrective and preventive action (CAPA) plan, expeditiously. The pre-approval inspection of the new facilities does not have any impact on the company's current commercialization plans from its existing facilities, the company said. The announcement was made after market hours on Friday, 20 September 2019.

Meanwhile, the S&P BSE Sensex was up 1,161 points or 3.05% to 39175.41. The broader market surged after the Finance Minister Nirmala Sitharaman on Friday, 20 September 2019, slashed corporate tax rate to 22% without exemptions. The effective corporate tax rate after surcharge now stands at 25.17%. The step has significant positive implications for corporates' profitability, broader economy and market valuations.

On the BSE, 1.75 lakh shares were traded in the Biocon counter so far compared with average daily volumes of 5.28 lakh shares in the past two weeks. The stock hit an intraday high of Rs 229.90 and an intraday low of Rs 224.25 so far during the day.

The stock hit a 52-week high of Rs 359.18 on 26 September 2018. The stock hit a 52-week low of Rs 211.30 on 20 August 2019.

The stock had outperformed the market over the past one month, up 4.47% compared with 1.84% rise in the Sensex. The scrip underperformed the market in past one quarter, down 9.92% as against Sensex's 4.01% fall. The scrip had also underperformed the market in past one year, down 32.55% as against Sensex's 3.18% fall.

Biocon's consolidated net profit jumped 72.3% to Rs 206.30 crore on a 30.4% surge in net sales to Rs 1,465.90 crore in Q1 June 2019 compared with Q1 June 2018.

Biocon is a biopharmaceutical company which focuses to reduce therapy costs of chronic diseases like autoimmune, diabetes, and cancer. Through its products and research services it is enabling access to affordable healthcare for patients, partners and healthcare systems across the globe.

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