Nomura has maintained its buy call on Glenmark Pharma with a target price of Rs 880 per share despite seven observations received from USFDA by its Baddi unit, Himachal Pradesh.
Form 483 observations for Baddi unit is concerning but observations are not indicating invalidation of high frequency of OOS tests that is a silver lining, the research house said.
According to Nomura, financial impact of observations may be limited.
The research house said there are similarities between Glenmark’s Baddi and Lupin’s Indore & Goa observations. It is concerning as Lupin recently received warning letter for the sites.
"We don't expect escalation into import alert, and number of products impacted is limited," it said. "We don't expect approval from Baddi site until inspection is closed."
Glenmark has received seven observations from the USFDA for Baddi manufacturing unit after an audit. The unit contributes approximately 10 percent of the revenue of the US sales.
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