The United States Food and Drug Administration has issued a form-483 with two observations to Piramal Pharma's facility in Sellersville in the United States.

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USFDA's pre-approved inspection was conducted between December 19 of last year and January 13 of this year.

The observations have been classified under the Voluntary Action Indicated (VAI) status and do not relate to data integrity.

Voluntary Action Indicated (VAI) means objectionable conditions or practices were found but the US drug regulator is not prepared to take or recommend any administrative or regulatory action.

Piramal Pharma's Sellersville facility is a fully integrated site which is involved in the manufacturing and packaging of solid oral dosage forms, liquids, creams and ointments.

Last week, the USFDA had issued a Form-483 for Piramal Pharma's manufacturing facility in Lexington with six observations. The unit lays emphasis on clinical trial to commercial-scale manufacturing of sterile liquid and injectables.

Piramal Pharma said that the company is preparing a detailed response to the observations, which will be submitted to the USFDA within the stipulated timelines.

Axis Capital had initiated coverage on Piramal Pharma with a buy rating and a price target of Rs 160, citing a potential recovery in the CDMO business and attractive valuations.

Jefferies cited the same CDMO recovery and attractive valuations rationale for initiating coverage on the stock with a buy rating and a price target of Rs 150. Jefferies also said that the headwinds faced by the company over the last 12-18 months are getting resolved.

Since listing, shares of Piramal Pharma have declined over 30 percent.