Biggest plunge in 11 years for stock.
By Raif Karerat
Shares of Dr. Reddy’s Laboratories Ltd. took its biggest plunge in 11 years after receiving a “warning” letter” from the U.S. Food and Drug Administration over inadequate quality controls at three manufacturing plants producing drugs for cancer and other diseases.
The warning letter was related to the company’s facilities making active pharmaceutical ingredients in Srikakulam, Andhra Pradesh, and Miryalaguda, Telangana in southern India as well as an oncology products facility, according to Bloomberg Business.
India’s second-largest drug manufacturer said the FDA warning meant it would not receive U.S. approvals for drugs made at the plants until it fixed the problems, a body blow for business at a company that relies on the U.S. for a majority of its sales.
The FDA inspected the company’s Srikakulam, Miryalaguda, and Duvvada drug-manufacturing sites in November, January, and February, and it immediately issued notices asking the group to rectify assorted problems, reported Business Insider.
When company was unable to fix the issues to the satisfaction of the FDA, and it was hit with a warning letter. Such letters are issued by the agency when it finds a manufacturer has “significantly violated” its regulations.
“There is no indication in the warning letter that we need to stop manufacturing, but we will be examining the contents and deciding our strategy,” Dr. Reddy’s CFO, Saumen Chakraborty, told the Indian television news channel ET Now.
The FDA warning is the latest in a string of incidents that have harmed Big Pharma’s reputation and slowed its growth in the U.S., where India supplies more than 40 percent of the generic and over-the-counter drugs.