Analysts had said USFDA scrutiny on Lupin’s Goa plant and Pithampur (unit-II) were key overhangs on the stock
Lupin receives EIR from USFDA for Goa plant
Shares of pharmaceutical major Lupin jumped nearly 10 percent in the morning trade on December 14 after the company said it had received an Establishment Inspection Report (EIR) from the US Food and Drug Administration (USFDA) for its Goa manufacturing facility.
The facility was under inspection in September. The USFDA determined that the inspection classification of the facility as Voluntary Action Indicated, Lupin said in a stock exchange filing.
According to the US drug regulator, VAI means that “objectionable conditions or practices were found, but the agency is not prepared to take or recommend any administrative or regulatory action”.
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“This is a significant milestone as we build back our reputation of being best-in-class in quality and compliance. We are committed to manufacture and supply products of the highest quality from all our manufacturing sites,” CEO Vinita Gupta said.
The management did not clarify if the EIR meant that the warning letter had been lifted for the plant.
According to analysts, this resolution could help Lupin address stagnating US revenues of around $ 170-200 million per quarter. They believed FDA scrutiny on its Goa and Pithampur plants were key overhangs on the stock.
The company’s Goa and Indore plants contribute to almost 50 percent of its pending drug approvals.
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“The Goa site has a very important place in the US market with the number of affordable, quality medicines we supply, and we now look forward to new products flowing out of the site again,” Lupin Managing Director Nilesh Gupta said.
The stock hit an intraday high of Rs 972.50 on the BSE and at 10.55 am, it was trading 7 percent higher at Rs 944.05.
“Resolution of USFDA issues at its plants (Goa, Pithampur – Unit-II, and Somerset) would be key developments to watch out for and, if successfully resolved, would lead to earnings upgrades,” Sharekhan by BNP Paribas had said in its Q2FY22 post-earnings note.
