Ranbaxy shares crash 30% after US FDA import alert

Daiichi Sankyo controlled pharma major Ranbaxy Laboratories Ltd’s shares crashed over 30 per cent on Monday after US Food and Drug Administration (FDA) reportedly issued an import alert for drugs manufactured at its plant in Mohali.

This is the third laboratory plant of the company banned by US FDA to sell products in the world’s biggest drug market. Apart from this, the two other plants which have received notices earlier for not meeting good manufacturing practices include Dewas in Madhya Pradesh and Paonta Sahib in Himachal Pradesh.

The US drug regulator said that the plant owned by the company in Mohali did not meet good manufacturing practices, as per separate media reports.

In response, Ranbaxy said, “The company has so far not received any communication from the USFDA on this subject. We are seeking information from the USFDA in this regard."

The shares of the company sank almost 35 per cent in intra-day trades on the Bombay Stock Exchange (BSE), hitting Rs 297.25 as compared to Friday’s close at Rs 457.25 before recovering partly to close at Rs 318.85 in a flat Mumbai market on Monday.

Earlier, the Mohali facility had received FDA Form 483 notifying objectionably conditions which might be in violation of the US FDA’s norms, at the conclusion of an inspection in December last year.

In May this year, Ranbaxy pleaded guilty of making fraudulent statements to the US FDA for gaining approvals for its products. The company has to pay a penalty of $500 million to the US Department of Justice (DoJ). The company is undergoing a consent decree with US FDA and DoJ to take corrective measures at its facilities in Paonta Sahib and Dewas facilities.

Ranbaxy, which was earlier promoted by Malvinder and Shivinder Singh, was sold to Japanese drug firm Daiichi Sankyo in 2008. After the company pleaded guilty for making fraudulent statements to FDA, Daiichi Sankyo accused the former promoters of concealing crucial facts about the investing into the company by US FDA.

Leave Your Comment(s)