Cipla stock tanks 8% after USFDA warning over issues at MP unit

Shares of pharma giant Cipla Ltd plunged as much as 8% to hit an intraday low of ₹1165.10 apiece on BSE after the United States Food and Drug Administration (USFDA) issued a warning letter to its Madhya Pradesh unit.

The warning letter stressed "data integrity issues" at the company embedded with product complaints and microbial contamination.

Cipla via a regulatory filing says: “The company has received a warning letter dated 17th November, 2023 from USFDA for the routine current Good Manufacturing Practices (cGMP) inspection conducted at our Pithampur manufacturing facility between 6th – 17th February, 2023.”

The warning letter summarises contraventions regarding methods or controls followed at the facility, which do not conform to the prescribed cGMP regulations and contains directional guidance for necessary corrections.

“The company will respond to the warning letter within the stipulated timelines and work closely with the USFDA to address the concerns in a holistic and timely manner to ensure sustained compliance. We uphold quality and compliance with utmost importance and remain committed to be compliant with the cGMP quality standards,” it concludes.

The pharma giant says it has received a "warning letter" from the USFDA for routine inspection of good manufacturing practices (GMP) at its Pitampura unit between 6-7th Feb, 2023. The US health regulator mentioned repeated observations for Cipla's facility earlier.

The company's Goa facility is under “Official Action Indicated” status, impacting product approvals from the facility meant for the US market. The US regulator has also asked Cipla to take assistance from third-party consultants to address the issue.

During the July to September quarter of FY24, Cipla's income surged 15% at ₹6,854.47 crore against ₹5,951.49 crore in Q2 FY23. The company's income in Q1 FY24 was at ₹6,465.18 crore.

The company’s profit stood at ₹1,155.37 crore, up 43% compared to ₹797.41 crore reported in the September quarter of last year. In the first six months of the year, the company has reported a total income of ₹13,319.65 crore, over 16.53% higher against its total income of ₹11,430.11 crore in H1 FY23.

The company’s share price closed 8.10% lower at ₹1,168.60 today.