Aurobindo Pharma sinks 10% as formulation unit undergoes US FDA inspection

Shares of Aurobindo Pharma slipped 10 per cent to Rs 1,035.45 on the BSE in Thursday’s intra-day trade after it said the US drug regulator is inspecting its Unit-4 in Telangana.

After a report by CNBC-TV18 earlier in the day, the company in a filing said that the US FDA is inspecting Eugia-III (erstwhile unit IV), which is a formulation manufacturing facility of Eugia Pharma Specialities.

The inspection is under progress from January 22, 2024 and has not been concluded yet. Eugia Pharma is the company's injectables arm. 

Aurobindo said as per the usual and standard practice, after the inspection is concluded, the company intimates exchanges regarding the outcome, including the number of observations, if any, and the same will be followed for the on-going inspection.

At 02:03 pm, the stock was trading 8 per cent lower at Rs 1,060 against a 0.09 per cent decline in the S&P BSE Sensex.

The market price of Aurobindo had hit a record high of Rs 1,177.10 on Tuesday, January 30, 2024. Since April, the stock has more than doubled or zoomed 122 per cent from a level of Rs 518 on March 31, 2023.

Autobindo develops, manufactures, and commercializes a wide range of generic pharmaceuticals, branded specialty pharmaceuticals and active pharmaceutical ingredients globally in over 150 countries.

The company has 25 manufacturing and packaging facilities and product portfolio spread over 7 major therapeutic/product areas encompassing CNS, AntiRetroviral, CVS, Antibiotics, Gastroenterological, Anti-Diabetics and Anti-Allergic.

Meanwhile, InCred Equities in September quarter results update said that Aurobindo’s base margins have already touched 19.5 per cent in Q2FY24 and FY25F should see further expansion from  the full-year contribution from gRevlimid vs six months’ contribution in FY24F, PLI with the commercialization of its Pen-G plant, backward integration in the Betalactum portfolio, as nearly 45-50 per cent of capacity at the Pen-G plant is likely to be used for captive purpose, and a better product mix with a higher share of injectables/biosimilars.

The company has given guidance of 20 per cent plus margin for FY24.

The company has not yet announced board meeting date for the financial results for December quarter (Q3FY24).