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Last Updated : Oct 09, 2019 02:00 PM IST | Source: Moneycontrol.com

Aurobindo Pharma receives 7 observations from USFDA; share up 5%

The United States Food and Drug Administration (USFDA) has concluded inspection of the manufacturing facility with 7 observations.

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Shares of Aurobindo Pharma added nearly 5 percent in early trade on October 9 even after the company received seven observations from USFDA.

The United States Food and Drug Administration (USFDA) has concluded inspection of the manufacturing facility with 7 observations.

USFDA conducted a cGMP inspection at the company's unit 7 manufacturing facility from September 19-27, 2019.

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The company believes that none of the observations are related to data integrity and is confident of addressing these issues within the stipulated timeline.

Citi has maintained buy rating on Aurobindo Pharma with a target at Rs 860 per share.

According to Citi, the nature of observations and compliance-related news flow are likely to remain overhang.

If the observations for unit VII not remedied quickly, then the valuations may decline by 4 percent, however, the company may see 8 percent correction if observations escalate to warning letter, said Goldman Sachs.

Escalation to import alert may lead to a 13 percent correction in stock price, it added.

On October 7, the share plunged 19.16 percent to end at a five-year low of Rs 458.50 on BSE after reports that the company had received USFDA's adverse observation for its unit-7.

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At 0919 hrs, Aurobindo Pharma was quoting at Rs 476.65, up Rs 18.15, or 3.96 percent on the BSE.

The share touched its 52-week high of Rs 838 and its 52-week low of Rs 450 on 30 April 2019 and 7 October 2019, respectively.

Currently, it is trading 43.12 percent below its 52-week high and 5.92 percent above its 52-week low.

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First Published on Oct 9, 2019 09:31 am
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