Stocks

Lupin shares drop nearly 3% on USFDA warning letter for Somerset facility

Our Bureau Mumbai | Updated on June 14, 2021

The regulator had inspected the Lupin Somerset site from September 10, 2020 to November 5, 2020

Shares of drug major Lupin fell nearly 3 per cent during the morning trade on Monday after the company received a warning letter from the US FDA for its Somerset, New Jersey facility.

At 11:29 am, Lupin was trading at ₹1194.60 on the BSE, down ₹35.65 or 2.90 per cent. It had opened at ₹1194.00 as against the previous close of ₹1230.25. It hit an intraday high of ₹1202.10 and a low of ₹1173.35.

ON the NSE, it was trading at ₹1,194.50, down ₹35.85 or 2.91 per cent.

The company on Sunday disclosed that it has received a warning letter from the US FDA for its Somerset, New Jersey facility, its only manufacturing plant located in the US.

The US FDA had inspected the Lupin Somerset site from September 10, 2020 to November 5, 2020.

The company further said it does not believe that the warning letter will have an impact on disruption of supplies or the existing revenues from operations of this facility.

“We are committed to addressing the concerns raised by the US FDA and will work with the FDA and the New Jersey District to resolve these issues at the earliest,” it said.

Also read: Lupin launches digital asthma educator platform

Motilal Oswal view

According to Motilal Oswal Securities, “While the revenue impact from the issuance of the WL is minimal, it has prolonged the process for future approvals from this site. With this, LPC has five sites under WL /Official Action Indicated (OAI) from the USFDA.”

“The near-to-medium term earnings trajectory remains unperturbed as critical inhaler products are manufactured at the site that is USFDA-compliant. However, the extended period to resolve regulatory issues at the five sites (partly due to the pandemic) is impacting the overall utilisation of assets for the US market,” it added.

It maintained a neutral rating on the stock at a target price of ₹1,320

Published on June 14, 2021

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