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Biocon hits 52-wk high as Malaysian unit gets 3 observations from US FDA

The stock of India's biggest biotechnology company was trading higher for the third straight day, and has surpassed it's previous high of Rs 321 touched on February 15, 2019 in the intra-day trade.

SI Reporter  |  Mumbai 

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USFDA

Shares of hit a 52-week high of Rs 323, up 3 per cent, on the BSE on Monday in the intra-day trade after the company said it has received three observations from the US health regulator following inspection of its insulin manufacturing facility in Malaysia. The company believes observations are procedural in nature.

The stock of India’s biggest biotechnology company was trading higher for the third straight day, and has surpassed it's previous high of Rs 321 touched on February 15, 2019 in the intra-day trade. It hit an all-time high of Rs 359 on September 26, 2018.

“The US Food and Drug Administration had conducted a pre-approval inspection of Biocon's subsidiary Sdn BHd's manufacturing facility in Malaysia for Insulin Glargine between February 10 and 21. At the conclusion of the inspection, the agency issued Form 483 with three observations which we believe are procedural in nature”, said in an exchange filing on Saturday, February 21. READ STATEMENT HERE

“The company will respond to the FDA with an appropriate Corrective and Preventive Action Plan (CAPA) and are confident of addressing these observations expeditiously. The FDA has set a target action date for our insulin Glargine application in June 2020. We believe the outcome of this inspection does not, in any way, impact the commercialization plans of insulin Glargine in the US. Biocon Biologics is committed to global standards of quality and compliance,” Biocon’s spokesperson said.

As per the US FDA, Form 483 is issued to firm management at the conclusion of an inspection when investigators observe any conditions that, in their judgment, may constitute violations of the Food Drug and Cosmetic Act and related Acts.

Analysts at JP Morgan, however, have ‘overweight’ rating on Biocon with September 2020 price target of Rs 360 per share.

The brokerage firm thinks the company is well positioned in the emerging biosimilar supported by its R&D capabilities, deep pipeline and strong management team. "Over the last few years, the company has seen success in its biologic development with a spate of approvals in the US/EU and focus has shifted to the earnings potential from its pipeline investment. Key catalysts for the stock would be the momentum in recent launches and new filings/approvals in the US," it said in a recent report.

At 11:46 am, Biocon was up 2 per cent at Rs 321 on the BSE, as compared to a 0.91 per cent decline in the S&P BSE Sensex. A combined 6.4 million shares have changed hands on the counter on the NSE and BSE so far.

First Published: Mon, February 24 2020. 11:47 IST
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