Wockhardt Down 20% On US FDA Alert
DSIJ Intelligence / 23 May 2013
The company's stock has dropped after it received a US FDA alert on one of its manufacturing facilities.
The shares of Wockhardt have hit the lower circuit on rumours that the US FDA has issued an alert on its facility. The company is yet to file any notification with the stock exchange, but DSIJ's sources have confirmed this news. The shares of Wockhardt are trading at Rs 1315, showing a steep underperformance to the broader market.
Earlier this year, the Aurangabad manufacturing facility was audited by the US FDA and the rumours of a possible alert have already been afloat. However, we believe that the facility has not been adding any significant revenues to the company's topline.
The market has reacted strongly to this news as the Ranbaxy case is still fresh in their mind. Ranbaxy's current promoters, i.e. Daiichi Sankyo is looking to take legal action against the company's ex-shareholders. That development had already dampened the sentiment on pharma stocks as a whole. This could also be the reason for the panic selling in the shares.
More on this story will be covered soon...
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