Dr Reddy's gains over 4% on buzz Srikakulam API plant cleared US FDA audit

sun_pharma_dec_0910_356_37537752

Shares of Dr Reddy's were up 4.21 percent on Monday with rumours that the company's Srikakulam active pharmaceutical ingredient unit cleared US FDA inspection with no major observations.

Srikakulam API plant also called CTO-6 is going through an US FDA re-audit that begun on 27 March. The audit is expected to end tomorrow.

Dr Reddy's declined to comment on the development citing market speculation.

Srikakulam API plant was issued a warning letter from US FDA in November 2015 and has undertaken remediation measures. US FDA in its warning letter reprimanded the plant for non-compliance of data standards in lab tests, unauthorized access, and poor record-keeping practices.

The plant supplies active ingredients for Dr Reddy’s captive consumption as well as for meeting its customer needs. The CTO-6 is the largest API manufacturing plant of the company contributing about 10 percent of sales when Dr Reddy’s received the warning letter.

Dr Reddy's said it collectively spent about USD 35-40 million on remediation work that includes legal and professional charges.

The drugmaker March received repeat observations from the US Food and Drug Administration on its Duvvada oncology formulation facility in Visakhapatnam.