Cipla slumps nearly 8% after USFDA warning letter for manufacturing lapses
Cipla fell as much as 8% in intraday trade on Thursday following a warning letter by the USFDA for various manufacturing lapses at its Pithampur facility.
After an inspection at the Pithampur plant, the USFDA issued a warning letter stating that the company's methods, facilities, or controls for manufacturing, processing, packing, or holding do not conform to good manufacturing practices and that its drug products are adulterated.
A warning letter is issued when the US health regulator finds that a manufacturer has significantly violated its regulations.
«Your firm failed to thoroughly investigate any unexplained discrepancy or failure of a batch or any of its components to meet any of its specifications, whether or not the batch has already been distributed,» the USFDA said.
It also pointed out the company's failure to establish and follow appropriate written procedures that are designed to prevent microbiological contamination of drugs purporting to be sterile, and that include validation of all aseptic and sterilization processes.
USFDA noted that it has cited similar CGMP observations earlier at the company's other facilities as well.
The shares of the company delivered moderate returns to investors so far this year, rising 10% on a year-to-date basis.
Despite the pressure in the near term, analysts are bullish on the stock and investors could use this opportunity of declines to consider some buying.
Cipla posted strong second-quarter results, led by robust growth across key businesses.
The organic growth was strong in India, the US market and South Africa.
While gRevlimid business growth was flat QoQ in the US, Cipla witnessed market share improvement in gAlbuterol and gLanreotide as well as price hikes in
