Biocon stock tumbles after US FDA slaps 3 observations on Visakhapatnam facility

Despite the fall in today's session, Biocon shares are up 32 percent in the year so far.

Shares of Biocon tumbled over 2 percent on June 18 after the US Food and Drug Administration issued three observations for its Active Pharmaceutical Ingredients (API) facility in Visakhapatnam.

The US FDA concluded its good manufacturing practices (GMP) inspection of Biocon's API facility on 14 June 2024. "Three observations were cited at the end of the inspection, which we will be addressing within the stipulated time. Biocon stands committed to quality, safety and efficacy of the products manufactured," the drugmaker stated in an exchange filing.

At 12.43 pm, shares of Biocon were trading at Rs 328.8, down 1.79 percent on the NSE.

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The US FDA issues observations if it finds divergence from the standards of good manufacturing practices during its inspection of any given facility. In case the US drug regulatory is unsatisfied with the drugmaker's efforts to rectify the observations in line with the standards, then the US FDA classifies the unit as Official Action Indicated (OAI).

An OAI status makes the facility in question vulnerable to an import alert, warning letters, product recalls and delays in approval of new drugs. Hence, the drugmaker needs to address the OAI classification, undertake corrective and preventive actions to rectify the identified issues, communicate these actions to the US FDA, and often undergo a follow-up inspection to demonstrate compliance.

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