Granules tanks 16% on concerns over 6 observations issued by US FDA

More than 31 million equity shares, representing 12.89 per cent equity of the pharmaceutical company, had changed hands on the NSE till 02:08 PM.

Shares of Granules India tanked 16 per cent to Rs 566 on the National Stock Exchange (NSE) in Thursday’s intra-day trade amid heavy volumes as investor concern regarding the six observations issued by United States Food and Drug Administration (US FDA) for the company’s Gagillapur facility in Telangana, took a toll on the company's stock.

Till 02:08 PM, more than 31 million equity shares, representing 12.89 per cent equity share of the pharmaceutical company, had changed hands on the NSE. The stock was trading 15 per cent lower at Rs 573.10 at last check, compared to the 1.2 per cent rise in the Nifty 50.

In a press release, Granules acknowledged that several investors have sought clarification from the company, and it wants to reassure them that the company is actively addressing the observations raised by the US FDA and it is fully committed to resolving them. 

“In reference to our communication dated September 07, 2024 regarding the completion of the US FDA inspection at our Gagillapur FD facility, conducted from 26th August to 6th September 2024, which concluded with six observations. We acknowledge that several investors have sought clarification, and we want to reassure them that we are actively addressing the observations and are fully committed to resolving the issues raised. We will work with the US FDA to address the issues raised in the observations,” Granules India stated in the release.

“We will work with the US FDA to address the issues raised in the observations. At Granules, quality and compliance are paramount, and these principles are deeply embedded in our ongoing review and governance processes. The company will continue to provide updates in a timely manner and as appropriate,” it added.

Granules, on Saturday, September 7, had informed that the US FDA has issued six observations for the company’s Gagillapur facility in Telangana.

The inspection covered both Current Good Manufacturing Practice (cGMP) and Pre-Approval Inspection (PAI) processes. The Gagillapur facility is responsible for manufacturing finished dosages (FDs) and pharmaceutical formulation intermediates (PFIs). 

The company said that it is committed to addressing the observations promptly and will submit its response to the US FDA within the stipulated time frame. The Gagillapur facility continues to play a vital role in the company’s global operations, ensuring the supply of high-quality pharmaceutical products to markets worldwide, the company explained.

Meanwhile, the stock price of Granules had hit a record high of Rs 721 on August 30, 2024. It had zoomed 80 per cent from its June month low of Rs 401.

Granules operates in three primary business segments: active pharmaceutical ingredients (APIs), PFIs and FDs. It owns eight manufacturing facilities catering mainly to export markets that  account for around 94 per cent of the company's sales.