Shares of Biocon tanked about 4 percent on Wednesday after allegations of bribing a central government agency that approves drugs in India emerged against a company subsidiary’s official.
The stock traded down 3.66 percent at Rs 313.20 on the BSE. The stocks had hit 52-week low of Rs 313.35 earlier in the week, and it has again slid close to that level.
A media report said a Central Bureau of Investigation (CBI) has arrested five people, including S Eswara Reddy, joint drug controller at Central Drugs Standard Control Organisation (CDSCO), and L Praveen Kumar, associate vice president and head of national regulatory affairs (NRA) at Biocon Biologics.
The CBI is investigating the role of a Delhi-based conduit that played a role in facilitating bribes. The agency alleged that this conduit conspired with Kumar and other executives of Biocon Biologics to pay a bribe of Rs 9 lakh to Reddy for "favourably processing three files" related to the Biocon subsidiary's diabetes injection Insulin Aspart.
According to the FIR, Reddy attended the subject expert committee (SEC) of CDSCO on May 18 and supported the waiver of phase III clinical trial for 'Insulin Aspart injection' of Biocon Biologics.
“We strongly deny the allegations of bribery against the company and its officials associated with the approval process of one of our products in India,” Biocon said in a statement.
“Biocon Biologics follows due regulatory process for all our product approvals by the DCGI. The entire application process in India is online and all meeting minutes can be found on the website of the Central Drugs Standard Control Organization (CDSCO),” it said.According to the news report, it also alleged that Reddy manipulated the minutes of the meeting of SEC on May 18 by changing the word "data" to "protocol" in the recommendations made and "thereby causing wrongful gain" to Biocon Biologics.