LUPIN SHARES PLUNGE 17% ON US FDA WARNING LETTER

MUMBAI: Shares of drug maker Lupin Ltd fell nearly 17% on Tuesday after it said the US Food and Drug Administration (FDA) has issued a warning letter to its manufacturing facilities at Goa and Indore for violation of good manufacturing practices (GMP).

The warning letter means Lupin will not be able to secure US FDA approvals for products filed from these units.

On 7 April this year, the US drug regulator had issued a Form 483 to Lupin for its Goa unit with three observations of quality lapses, and another on May 19 for Indore or Pithampur unit II May with six observations.

The FDA issues a Form 483 after a site inspection, if its investigators spot any condition that in their judgement may constitute a violation of the US Food Drug and Cosmetic (FD&C) Act and related laws. Form 483 is followed by a warning letter if the FDA is not satisfied by the steps a company takes to resolve the regulator’s concerns.

In a stock exchange filing, the company said it had responded to all the observations made by US FDA.

“We are deeply disappointed to have received this outcome. While there will be no disruption to existing product supplies from either of these locations, there will likely be a delay in new product approvals from these two facilities,” Lupin said. The company plans to resolve these issues at the earliest.

Lupin has about 50 products filed with the US FDA from these two plants and this warning letter could impact approvals of 25-30 products which were expected in FY18 and FY19, Nilesh Gupta, MD of Lupin said in an investor call.

About 12 of the products filed from these two plants which are expected to fetch meaningful returns may be shifted to other plants, Gupta said. He said it typically takes 12-18 months to resolve warning letter-related issues.

Shares of Lupin closed 16.84% lower on the BSE on Tuesday, while the Sensex fell 1.07% at 33,370.76 points.