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Aurobindo Pharma receives 'warning letter' from SEBI over USFDA audit row

Aurobindo Pharma "disclosed very limited and restricted information" about the warning it had received from the American drug regulator, SEBI said.

June 27, 2022 / 03:33 PM IST
 
 
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Drug-maker Aurobindo Pharma on June 27 informed the stock exchanges that it has received a "warning letter" from the Securities and Exchange Board of India (SEBI) over the row involving the audit by the United States' Food and Drug Administration (USFDA) at its unit in Hyderabad.

The market regulator, in its letter to Aurobindo Pharma dated June 24, said the company did not disclose all the details related to the USFDA action.

"From the disclosures made by the company, it was observed that the company had disclosed very limited and restricted information," stated the SEBI letter, a copy of which was attached by Aurobindo Pharma in its latest regulatory filing.

The company had, notably, issued a corporate announcement on November 10 last year to inform that the USFDA has conducted an inspection at its "Unit 1", an API (active pharmaceutical ingredients) manufacturing

facility, in Hyderabad between August 2 and August 12, 2021.

In another announcement, on January 14 this year, Aurobindo Pharma had informed that it had received a warning letter from the American drug regulator in connection to the inspection that was carried out at its Hyderabad-based facility in August 2021.

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SEBI, in its letter, noted that the only fact which Aurobindo Pharma disclosed was "that a warning letter was received from USFDA".

"The company did not disclose the details on the reason and the non-compliance/aberration observed, for which the warning was issued," it added.

SEBI's letter further added that Aurobindo Pharma, on being asked by the market regulator about the lack of information disclosed related to the USFDA action, said it had communicated about the observations issued by the USFDA in the investor's earning call on August 13, 2021 and that the transcript of the same was disclosed on the stock exchange platform.

"The above response was examined and it was found that the information disclosed by APL during investor call was same as the disclosure made and did not provide any additional information beyond what was already disclosed," SEBI claimed.

The letter also noted that Aurobindo Pharma had informed the SEBI that the USFDA's warning was "not considered serious" by it as the company had already taken robust corrective actions to mitigate the risk.

"Aurobindo Pharma's submission on not considering the warning as serious is not tenable. While the warning letter is available on the USFDA website, the company chose to make limited disclosure. Mere disclosure of the receipt of the USFDA warning letter is insufficient and an impediment to assess the current status," SEBI said.

The limited disclosure made by Aurobindo Pharma is not in line with the "Principles Governing Disclosures" under the SEBI regulations, the letter stressed.

"The aforesaid non-compliance is viewed seriously. You are hereby warned and advised to ensure compliance with all applicable provisions of SEBI Regulations. Any such aberration in future would be viewed seriously and appropriate action would be initiated," it further noted.

Aurobindo Pharma has also been asked to place the SEBI letter before the board of directors in the ensuing board meeting.

The company's shares, at 3:21 pm, were trading at Rs 522.10 at the BSE, down by 0.83 percent as compared to the previous day's close.
Moneycontrol News
first published: Jun 27, 2022 02:42 pm
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