Dr Reddy’s receives warning from USFDA for API facilities

The company issued a statement on Friday that the USA drug regulator had issued the warning following inspections to active pharmaceutical ingredients manufacturing facilities in Andhra Pradesh and Telangana, as well as oncology formulation manufacturing facility at Visakhapatnam, Andhra Pradesh.

Shares of Dr. Reddy’s dropped as much as 14.5% and were trading 13.5% lower at Rs.3,680.60 on BSE at 11:59am, while the benchmark Sensex rose 0.05% to 26,317.69 points.

Adding further, Prasad said, “We will respond with a comprehensive plan to address these observations within the stipulated time-frame of 15 days”.

“There is no indication in the warning letter that we need to stop manufacturing, but we will be examining the contents and deciding our strategy”, Dr Reddy’s Chief Finance Officer Saumen Chakraborty told Indian television news channel ET Now.

These observations, are listed on an FDA Form 483 when, in an investigator’s judgement, the observed conditions or practices indicate that an FDA-regulated product may be in violation of FDA’s requirements. He said Dr Reddy’s was in the process of “assessing the situation”. “We will get back to USFDA on action plan o the plant”.

The letter was issued by the United States Food and Drug Administration (USFDA) yesterday for its three manufacturing plants at Srikakulam, Miryalaguda and Duvvada, the company said in a BSE filing. “We will continue to actively engage with the agency to resolve these issues”, said G.V. Prasad, CEO at Dr Reddy’s.

The company has said that Srikakulam facilities contribute around 10-12% of sales of the company.

The FDA inspected the company’s Srikakulam, Miryalaguda and Duvvada drug manufacturing sites in November, January and February, and nearly immediately issued initial notices asking the group to rectify a few problems.