Lupin gains 3% as Vizag API facility receives EIR from USFDA

Shares of Lupin rose 3 per cent to Rs 863 on the BSE on Thursday after the company’s API (Active Pharmaceutical Ingredients) in Vizag received the establishment inspection report (EIR) from the US health regulator.

The pharmaceutical company today announced the receipt of the EIR from the United States Food and Drug Administration (USFDA) after closure of the inspection for its Vizag (Vishakhapatnam), India facility. The inspection for the API facility was conducted by the USFDA between January 13, 2020 and January 17, 2020, it said.

Lupin enjoys leadership position in the cardiovascular, anti-diabetic, and respiratory segments and has significant presence in the anti-infective, gastro-intestinal (GI), central nervous system (CNS) and women’s health areas. It is the third-largest pharmaceutical company in the US by prescriptions and in India by global revenues.

Last month, Lupin informed the stock exchanges that the USFDA had closed its inspection of Lupin's manufacturing facility in Pithampur, Madhya Pradesh.

The inspection for the facility was conducted by the US health regulator between February 3 and February 11, 2020, and concluded with two observations. The company had received the EIR from USFDA for its Pithampur Unit-1 facility, Lupin said.

Brokerage firm Prabhudas Lilladher has upgraded Lupin's stock to ‘Buy’ from earlier 'Reduce' with target price of Rs 978 (earlier Rs 685). It assigned 24x PE (earlier 22x) on FY22E due to better earnings visibility from the US market led by easing of regulatory issues.

“We believe regulatory resolution would allow Lupin to make a strong comeback in the US market where pricing environment has been stabilized and trade-war concerns between US and China could provide an opportunity to Indian Gx,” the brokerage firm said in company update.