Shares of Granules India extended their losing streak to the third straight session after falling as much as 4 percent in trade on September 13. As a result, the stock has plunged 23 percent over the course of just three sessions, with the fall triggered by the US Food and Drug Administration issuing a Form 483 with six observations for the company’s Gagillapur manufacturing site.
At 09.49 am, shares of Granules India were trading at Rs 548.85 on the NSE.
The observations highlighted are related to cleaning/maintenance, inadequate root-cause analysis, document management, procedures for in-process controls and air purification units. The drugmaker is now expected to implement remediation measures to address the issues.
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Even though currently there is no major product pending for approval from this site, analysts at Motilal Oswal Financial Services still see the regulatory inspection at Gagillapur to be a near-term hurdle for growth in US markets.
The company's Gagillapur facility boasts a production capacity which is more than the combined capacity of the company's other sites in Parawada, Chantilly, and Jeedimetla. Hence, a clearance of this sites remains vital for Granules' growth trajectory.
Aside from this, the company has largely maintained a strong regulatory track record. Since 2009, it has undergone 24 USFDA inspections, with the Gagillapur (Medchal-Malkhajgiri) site being inspected six times. The company has met with the regulatory standards of the USFDA in most cases, largely receiving Voluntary Action Indicated (VAI) or No Action Indicated (NAI) classifications in these inspections.
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