Dr Reddys Laboratories Share Price Rebounds Despite USFDA Inspection Concerns

Dr Reddys Laboratories Share Price Rebounds Despite USFDA Inspection Concerns

VoM News Desk | December 12, 2023 | 01:06 PM IST | Breaking News | Follow on Google News

Dr Reddys Laboratories Share Price Rebounds Despite USFDA Inspection Concerns Image/Mint

Dr Reddys Laboratories Share Price Rebounds Despite USFDA Inspection Concerns

Dr Reddy’s Laboratories witnessed a robust rebound in its share price, surging up to 2.96% during Tuesday’s morning trades. This positive movement follows a correction of more than 5% observed in the previous trading session, prompted by uncertainties arising from a recent inspection conducted by the USFDA (United States Food & Drug Administration) at some of its facilities, along with the resulting observations received by the company.

The inspection, specifically at Dr Reddy’s formulations manufacturing facility (FTO-3) in Bachupally, Hyderabad, from October 19 to October 27, 2023, led to the issuance of a Form 483 containing ten observations.

Dr Reddy’s has committed to addressing these observations within the stipulated timeline.

Despite concerns expressed by Antique Stock Broking about the severity of certain observations, particularly those related to quality control, faulty equipment, and data integrity, it is worth noting that the facility plays a crucial role in Dr Reddy’s operations.

This site manufactures four of the company’s top 10 products, including generics of Ciprodex, Nexium, Valcyte, and Toprol. Around 70 other products, including commodities, are also manufactured here, contributing approximately 30% to the company’s US revenue (including partnered products).

While regulatory concerns may continue to impact Dr Reddy’s share prices until complete clearance is obtained, analysts suggest that the recent developments do not necessarily indicate a halt in exports from these facilities.

The reaction seen in the stock price during the previous trading session might have been overstated, considering the ongoing situation.

Additionally, the company informed the exchanges about the completion of a GMP and Pre-Approval Inspection (PAI) by the USFDA at their R&D centre (Integrated Product Development Organization or IPDO) in Bachupally, Hyderabad, conducted from December 4 to December 8, 2023.

This inspection resulted in Dr Reddy’s receiving a Form 483 with three observations, which the company plans to address within the stipulated timeline.

The market is closely monitoring these developments, but the rebound in share prices indicates some confidence and positivity amidst these regulatory concerns for Dr Reddy’s Laboratories.

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VoM News Desk

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