Sun Pharma’s Halol EIR, no respite in Fortis saga were key highlights of this week

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26 Aug, 2025 12:21

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This past week saw investors rushing to take advantage of pharmaceutical stocks that were trading at reasonable valuations, aided by some positive newsflow about companies resolving their pending regulatory compliance woes and faster approvals.

The BSE Healthcare index gained 6.28 percent this week, while the benchmark Sensex rose 0.42 percent

The big news this week was Sun Pharma receiving the much anticipated establishment inspection report or EIR – indicating closure of inspection for its Halol facility. Halol is the company's largest manufacturing site and has been under the cloud after the US Food and Drug Administration issued a warning letter on December 2015. Read here to find out how the drug maker managed to get its Halol facility off the US FDA hook.

Dr Reddy’s, which is otherwise bogged down by Form 483s, inspections and resolution timelines jumped into the action after a long gap with the US FDA's nod to sell generic Suboxone sublingual film used in treatment of drug addiction in the US.

The company wasted no time, went ahead with 'at risk' launch on day one of the approval even as the patent litigation was still on. As expected it immediately drew a blowback from innovator Indivior, a spun-off of British consumer goods company Reckitt Benckiser, maker of products ranging from antiseptic brand Dettol to Durex condoms.

Indivior, which has more to lose from the generic entry, got a restraining order from a US court, holding Dr Reddy’s from temporarily selling the product. The hearing is scheduled for June 28.

Fortis – action shifts to June last weekThe week started with Fortis deferring its Q4 and FY18 results for the second time. The healthcare provider cited need for additional time to consider certain aspects of the Luthra & Luthra’s investigation report in its financial accounts.

The board in March has appointed an external legal firm to investigate whether there are any breaches in its internal control procedures in light of the promoters taking out nearly Rs 473 crore.

Luthra & Luthra submitted its report to the board on June 8.
Fortis' board did not disclose details of the internal investigation report, but said it had shared the findings with its statutory auditors.

The company said it will report its Q4 numbers on June 25. The delay in announcing its results also had an impact on the timelines of the bidding process. Fortis now extended the date for submission of bids to June 28. The earlier deadline for submission of bids was on June 14.

Meanwhile Moneycontrol reported that it’s actually the statutory auditor who was held from signing Fortis' Q4 accounts for want of additional information related to certain finding in the Luthra & Luthra report.
Fortis called off the demerger of its diagnostics arm, SRL, citing headwinds for the sector.

The demerger of SRL, which the board cleared in August 2016, was expected to unlock value in its diagnostics business, but it moved at snail’s pace while the circumstances and priorities of the company have altered with the exit of erstwhile promoters and their patrons on the board no more calling the shots.

Analysts tracking the company pointed out that it doesn’t make sense to pursue the demerger when the entire company is up for sale.