Divis Lab tumbles on reports USFDA issues 6 observations to unit

Divis Laboratories fell 7.71% to Rs 887.60 at 12:50 IST on BSE after media reports suggested that the company's Vizag unit 2 received six observations from the US drug regulator.

Meanwhile, the S&P BSE Sensex was down 229.22 points, or 0.73% to 31,370.54.

On the BSE, 5.85 lakh shares were traded in the counter so far, compared with average daily volumes of 9.83 lakh shares in the past one quarter. The stock had hit a high of Rs 923.85 and a low of Rs 874.70 so far during the day.

According to media reports, after inspecting the plant between 11 to 19 September 2017, the US Food and Drug Administration (USFDA) issued six observations, including failure in testing individual batches and inadequate cleaning instructions.

The USFDA reportedly pointed out that the company has failed to test individual batches of final active pharmaceutical ingredient (API) with conformity with all appropriate specifications and the lab failures have not been thoroughly investigated.

Among other observations, the company reportedly failed to validate the manufacturing cleaning length of time and there are inadequate cleaning instructions for major equipment. Batch records are not always recorded, according to the regulator.

Divis Laboratories' net profit fell 41.5% to Rs 176.54 crore on 19.3% decline in net sales to Rs 821.20 crore in Q1 June 2017 over Q1 June 2016.

Divis Laboratories is primarily engaged in the manufacture of active pharmaceutical ingredients (APIs) & intermediates for generics; custom synthesis of API's and advanced intermediates for discovery compounds for pharma giants; building blocks for peptides; building blocks for nucleotides; carotenoids; and chiral ligands.

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