Cipla’s Share Price Drops Over 7% After US FDA Warning

Cipla's Share Price Drops Over 7% After US FDA Warning

VoM News Desk | November 23, 2023 | 02:18 PM IST | Breaking News | Follow on Google News

Cipla’s Share Price Drops Over 7% After US FDA Warning

Cipla’s Share Price Drops Over 7% After US FDA Warning

Cipla’s share price experienced a significant drop of over 7% in Thursday’s trading session, erasing gains from the previous two weeks. This decline followed the release of a warning letter from the US Food and Drug Administration (US FDA) to Cipla’s Pithampur unit, which was sent on Saturday, November 18. Opening at an intraday high of ₹1,272.95 on the Bombay Stock Exchange (BSE), Cipla quickly became the top laggard in the Nifty 50 index for the day.

Technical Analysis of Cipla’s Stock Movement

Technical analysts attribute Cipla’s share price fall to its inability to sustain above the August swing high of around ₹1,280. However, the major influence seems to be the news of the US FDA warning letter. Equity Technical and Derivative Analyst Rajesh Bhosale from Angel One suggests caution, advising against fresh long positions until signs of a base or reversal emerge, with the next support levels identified around 1160 – 1150.

Impact of US FDA Warning Letter

The warning letter from the US FDA, as per Cipla’s exchange filing on November 18, pertains to a routine current good manufacturing practices (cGMP) inspection at its Pithampur manufacturing facility conducted from February 6–17, 2023. The letter highlighted deviations from cGMP regulations and offered guidance for necessary corrections. In response, Cipla has committed to working closely with the US FDA to address these issues comprehensively and in a timely manner.

Company’s Commitment to Quality and Compliance

Cipla maintains a strong stance on quality and compliance, affirming their commitment to adhere to cGMP quality standards. The company plans to reply to the US FDA warning letter within the specified timeframe. The February inspection had resulted in eight inspectional observations, which are now being addressed by Cipla.

VoM News Desk

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