Cipla shares trade down after FDA inspection at US facility

USFDA inspected the manufacturing facility of InvaGen Pharmaceuticals, a subsidiary of Cipla.

Shares of Cipla slipped 1 percent in early trade on October 12 after the US Food and Drug Administration (US FDA) inspected the pharma giant’s American facility and issued an establishment inspection report (EIR).

The stock was trading at Rs 1,161.0, down 0.84 percent, on the BSE, as of 10.30am. From its intraday high, the stock price has fallen 2.4 percent.

The US FDA carried out the inspection at InvaGen Pharmaceuticals, a wholly owned subsidiary of Cipla, in Central Islip, Long Island, New York.

The facility received the EIR on the classification of this inspection as voluntary action indicated (VIA). An EIR means that the inspection has been completed by the FDA, while VIA indicates that objectionable items were found, but no action is required on the part of the agency. Such a classification is given to those facilities that are in “a minimally acceptable state of compliance with regards to current good manufacturing practice”, according to the FDA.

The Cipla shares underperformed the benchmark Nifty 50 index over the last one year. While the Nifty 50 gave investors 16.6 percent returns, Cipla shares only gained 6.2 percent. The shares see very low volatility, as indicated by the one-year beta of 0.36. The pharma giant's market capitalisation stands at Rs 95,187.7 crore.

As of June 2023 shareholding, the promoters of the company held 33.5 percent. FIIs and DIIs held 25.5 percent and 24.3 percent in the company, while the public owned 16.7 percent.