Pharma major Dr Reddy’s Laboratories has received a warning letter from the US Food and Drug Administration (USFDA) on three of its plants.
The warning letter covered two facilities making active pharmaceutical ingredients (APIs) at Srikakulam (Andhra Pradesh) and Miryalaguda (Telangana), and a cancer products manufacturing facility at Duvvada (Visakhapatnam, AP), the company said on Friday, sending its stock price plummeting, eventually closing down 15 per cent on the BSE.
The US regulatory action follows earlier inspections of these sites in November 2014, January 2015 and February 2015, respectively.
And DRL Chief Executive GV Prasad said that they would respond in the stipulated 15 days with a comprehensive plan to address the observations.
“We will continue to actively engage with the agency to resolve these issues and we have also embarked on an initiative to revamp our quality systems and processes, as an organisation-wide priority,” he added. The company did not, however, disclose details of the violations that had attracted the regulatory action.
Remedial action In the latest development, DRL’s Srikakulam plant had received US regulatory observations exactly a year ago, in November. The USFDA had pointed to as many as nine procedural deviations at the Srikakulam plant.
The usual practice is for a company to address these preliminary 483 observations in a given time. The company is off the hook if the remedial action is satisfactory. Otherwise, a warning letter is issued. And the caution here is that if the problem is not resolved satisfactorily, it could escalate into an import ban against products from those particular sites.
The company has not given the possible financial impact of the latest FDA action. But Srikakulam facilities contribute about 10-12 per cent of the company’s sales, said the analyst with Angel Broking, citing company data.