You are here: Home » Markets » News
Business Standard

Shilpa Medicare slips 12% on USFDA warning letter for Telangana facility

The company believes that the warning letter will have minimum impact of disruption of supplies and the existing revenues from operations of this facility

Topics
Shilpa Medicare  | Buzzing stocks | Markets

SI Reporter  |  Mumbai 

The government is now trying to understand how long it will take before the drug’s production can start in India

Shares of tumbled 12 per cent to Rs 480 on the BSE on Monday after the US health regulator issued a warning letter to the company’s Jadcherla formulations facility in Telangana.

“The company has received a warning letter on 9th October 2020 through email from the United States Food and Drug Administration (USFDA) for its Jadcherla facility, Telangana,” said in exchange filing on Saturday, October 10, 2020.

However, the Company said it believes that the warning letter will have minimum impact of disruption of supplies and the existing revenues from operations of this facility.

“The company will be engaging with the agency and are fully committed in resolving this issue at the earliest. The Company is also committed in maintaining the highest standards of compliances and quality manufacturing across all its facilities”, it said.

currently has three manufacturing facilities approved by USFDA – One formulation facility and two API facilities. None of these facilities except Jadcherla has any outstanding issues with the USFDA at this point of time.

“Oncology formulations (including the US and Europe) account for around 20 per cent of overall sales. There could be some impact on future US launches besides incursion of remedial costs. Hence, sentimentally, there would be negative implications,” ICICI Securities said in a note.

That said, the fact that the other two USFDA approved API facilities have no pending queries should cushion the damage. Similarly, the company has diversified into Indian oncology with four launches. This also could mitigate possible damage, the brokerage firm said.

At 09:45 am, the stock was trading 8 per cent lower at Rs 503 on the BSE, as compared to 0.8 per cent decline in the benchmark S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 860,000 equity shares changing hands on the NSE and BSE, so far.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, October 12 2020. 09:49 IST
RECOMMENDED FOR YOU
.