Granules India shares slipped sharply in trade, down nearly 10% after the company informed that US FDA has classified the inspection at Gagillapur facility in Hyderabad, Telangana as an 'Official Action Indicated' (OAI).
The exchanges were informed about an inspection at the facility on September 7, which had resulted in a Form 483 issuance with six observations. Now, Granules India has said that it has responded to 'all the observations' issued by the USFDA.
This assumes greater significance since the Hyderabad facility is a significant contributor to the company's revenue.
The USFDA had conducted an inspection at the Gagillapur finished dosage facility from
August 26-September 6, 2024. Granules India had earlier said that the impact on the facility will have a 'small spillover' into Q3FY25 as well but the impact on lost sales will be less than what was seen in Q2FY25.
Read More: Granules India faces six observations from USFDA after inspection
"The Company has responded to all the observations issued by the US FDA. Additionally, the
Company has voluntarily undertaken a comprehensive evaluation of the facility for further
enhancements that lead to improvement of the facility. This activity is undertaken in
consultation with external subject matter experts," Granules India added.
The pharma company said it intends to work with the US drug regulator and is confident of securing compliance for the facility soon. "The Company will work with the US FDA on this activity and is confident that it will result in the US FDA approving the Company’s facility at Gagillapur in compliance with its expectations within a short time."
Read More: Granules India Standalone Q2FY25 Sales at Rs 567.99 crore, down 43.73% on year
Granules India in its communication to the stock exchanges has said that it has responded to all the six observations raised by the US regulator. The company added that it has also undertaken a 'comprehensive evaluation' of the facility, to bring in necessary improvements. Granules said it is consulting 'external experts' to further enhance and improve the site.
A drug manufacturing facility that receives 'OAI' requires to re-establish its GMP and quality compliance with the US regulator. After the compliance norms are verified by the USFDA, the facility is inspected once again, before any further action from the drug authority. The latest development may imply the issues related to the Hyderabad facility may take longer to resolve.
In a worst case scenario, the USFDA could escalate the matter with a warning letter, next, or worst, it may issue an import alert on the facility.
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