Lupin nose-dives 14 per cent, as Mandideep unit receives USFDA observation

Mumbai based branded and generic formulation major Lupin has received USFDA observation for its Mandideep unit which contributes substantially to the company’s revenue.

Lupin’s Mandideep unit has received Form 483 observations from US drug regulator according to media reports. Report says that the Active Pharmaceutical Ingredient (API) and formulations unit of the plant in Madhya Pradesh have received two observations each. The plant was inspected by the regulatory body in February 2016.

According to brokerage firm IIFL, the US regulator's observations are serious in nature and it could take 18 months for Lupin to address the issues. Lupin's US business is significantly dependent on Mandideep unit, which contributes revenues of more than USD 200 million annually, IIFL said.

Lupin earlier this month has received nine observations relating to inadequacy and adherence to operating CGMP (Current Good Marketing Practices) norms for its manufacturing plant in Goa from the US regulator.

After today’s fall of 14 per cent, Lupin's shares have lost close to 25 per cent in its value in the past one month due to USFDA concerns. Recovering from the low point of the day Lupin’s shares were trading at Rs 1352, down by about 10 per cent on NSE.

CNX Pharma index was also the biggest loser of the day as it was down by more than 3.6 per cent. Other major losers included were Sun Pharma, Cipla, Glenmark and Aurobindo Pharma which were down anywhere in the range of 2.5 to 4 per cent in trade.