Biocon slips 4% after USFDA asks for corrective measures at Malaysian unit

The USFDA has determined the inspection classification as 'OAI' (Official Action Indicated) post inspection of Biocon's step-down subsidiary in Malaysia.

Shares of Biocon slipped over 4 per cent to a low of Rs 243.50 in Wednesday's intra-day trades after the company informed that the US Food and Drug Administration (USFDA) had asked for corrective measures at its Malaysia-based subsidiary post inspection.

At 10:20 AM, Biocon was down 3.5 per cent at Rs 245.50. The counter had seen trades of around 1.1 lakh shares as against the two-week average volume of around 71,000 shares on the BSE. Meanwhile, the S&P BSE Sensex quoted flat around 66,440 level.

Biocon in an exchange filing today said, Biocon Sdn Bhd., a step-down subsidiary of Biocon Biologics, has received a communication from the USFDA pursuant to its July 2023 cGMP inspection at its insulins manufacturing facility at Johor, Malaysia. The USFDA has determined the inspection classification as 'OAI' Official Action Indicated). The OAI status may cause delay and/or withholding of pending product approvals or supplements from the facility.

The company further stated that they had submitted a comprehensive Corrective and Preventive Action (CAPA) plan to the USFDA in response to observations, and believe that they were on track to complete all actions as committed.

The said observations may not have a material impact on the manufacturing and distribution of the company’s commercial products for the US market, the release added.

Earlier this month, the USFDA had rejected the Biocon's Insulin Aspart application, a proposed biosimilar for diabetes treatment, in CRL (Complete Response Letter).

The USFDA said, it issued a CRL to convey to the company that its initial review of an application is complete, and it cannot approve the application in its present form.

That apart, in October 2023, Biocon announced a partnership with Juno Pharmaceuticals, a specialty pharmaceutical firm based in Canada, for the commercialisation of Liraglutide, a drug-device combination intended for the treatment and management of Type 2 diabetes and obesity in the Canadian market.

The company is scheduled to announce its Q2 results on November 10. The stock has been a underperformer so far in 2023, down 7 per cent, in comparision the Sensex has gained 8.4 per cent.