Ranbaxy's Mohali Facility Under US FDA Scanner

The negative news flows on Ranbaxy are only increasing. After news that the Indian drug regulators would investigate the company's facilities, its woes seemed to have ended. But then came the news of UK's drug authority imposing a penalty on the company for having delayed entry of a drug some 10 years ago. In the latest blow, the USFDA is now investigating its Mohali manufacturing facility.

Ranbaxy's stock has been correcting hugely after it pleaded guilty in case of malpractices in two of its manufacturing facilities. Its manufacturing unit in Mohali is a brand new facility, which had received US FDA approval a year ago. As per sources, the US FDA has raised some further concerns on this facility now. Speculations are rife that the the drug inspectors may have noticed some compliance-related violations in the plant. With this, the pressure on the company to come clean out of the series of messy episodes will only rise.

In the wake of this new development, the stock has tanked more than 6% so far. It has moved steeply lower by 37% in this year itself, underperforming the market as well as the BSE Healthcare index. We advise our readers to exit from this counter.