Glenmark Pharmaceuticals Ltd shares dived nearly 10% in intra-day trade on Monday, i.e. 7 October, after the US health regulator issued a warning letter to the company’s manufacturing facility in Himachal Pradesh.
At 11:24 am, Glenmark Pharma shares were trading at Rs 287.75, down 8.8%, after hitting the day’s low of Rs 285. The stock has corrected by a massive 47% in the past one year.
The Baddi facility is significant as it is expected to contribute $30 million to the company’s total sales in the current fiscal year, which is around 7% of the total US sales.
The US Food and Drug Administration (USFDA) had inspected the Baddi facility between 15 April and 20 April 2019, after which the company had informed that the inspection was classified as ‘Official Action Indicated’ (OAI). OAI means that an FDA inspection revealed significant objectionable conditions or practices and action must be taken to address the issues.
Glenmark Pharma has said that it is committed to work along with the US FDA to implement all necessary corrective actions and is in the process of preparing a detailed response to the regulator within 15 working days. It clarified that the existing manufacturing and the sale of products from the Baddi facility will not be impacted.
“There are no major pending approvals from this facility for the next 12 months and there will be no financial impact on account of this development,” the company stated in a press release.
Glenmark Pharma has eight manufacturing facilities approved by the US FDA – five formulations facilities and three API facilities under Glenmark Life Sciences. Currently, none of these facilities, except Baddi, has any outstanding issues with the US FDA.
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