Cipla stocks slump 8% after US FDA warning letter

Pharmaceutical giant Cipla on Thursday reassured stakeholders that there was no significant risk to its existing commercial product portfolio after it received a warning letter from the United States Food and Drug Administration (US FDA) following a routine Good Manufacturing Practices (GMP) inspection.   

The company said it is actively implementing a de-risking plan for new products while addressing the observed concerns.  

Meanwhile Cipla on Thursday also witnessed its biggest fall of 2023. The scrip closed at Rs 1168.60 apiece, recording an 8.10 per cent fall. In contrast, the benchmark BSE Sensex settled almost flat at 66,017.81. The pharma major has been buzzing on Dalal Street after the company on November 18 informed bourses that it has received the said warning letter from the US FDA following a routine current cGMP inspection at its Pithampur facility from February 6 to 17, 2023.   

The company in an exchange filing stated that the warning letter received from the US FDA was a continuation of observations received on February 17, 2023, and the inspection classification of the facility as Official Action Indicated (OAI) received on August 5, 2023.  

“We do not see a material risk to our existing commercial product portfolio. The process of executing a de-risking plan for new products and simultaneously addressing the observations is underway. We also assert that we uphold quality and compliance with the utmost importance and remain committed to being compliant with the cGMP quality standards,” Cipla said in an exchange filing on Thursday.  

“The company is in the process of submitting the requisite response to the Warning Letter within the stipulated timelines and shall work closely with the USFDA to address the concerns,” it added.  

The USFDA warning letter outlined violations related to methods or controls at the facility that did not comply with prescribed cGMP regulations. It provided also guidance for necessary corrections. The US drug regulator issued eight observations for the inspection conducted earlier in the year, leading to the facility's classification as OAI in August.   

Cipla responding to the Warning Letter within the specified timelines, said it is collaborating closely with the US FDA to comprehensively address concerns and ensure ongoing compliance. “We prioritise quality and compliance, remaining dedicated to adhering to cGMP quality standards,” company stated.  

Previously, Cipla's management in a Q2 press conference said that US FDA observations at the Pithampur and Goa plants were causing a near six-month delay in product launches. The management had also mentioned the relocation of manufacturing for Advair, the largest product produced at the Pithampur facility, to Hauppauge in Long Island. Advair a drug used in treating asthma and chronic obstructive pulmonary disease is a major product in the company’s portfolio and was expected to improve its financials in the upcoming quarters.   

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