Share Market Live

NSE

The United States Food & Drug Administration (USFDA) concluded a pre-approved inspection at Lupin's biotech manufacturing facility in Pune. Following the inspection, the regulator has issued a form 483 with 17 observations.

However, the company does not expect an impact to existing revenues from this facility post the observations. The pre-approved inspection was conducted earlier this month.

Lupin has been under the regulatory lens recently with the company's Tarapur plant receiving a warning letter last month for an inspection conducted between March and April this year. The unit had received an Official Action Initiated (OAI) status in January 2020, followed by four observations on reinspection in April this year.

The company's Goa plant had also received a warning letter in 2017 which was lifted in December last year. Its unit in Somerset, New Jersey received an Establishment Inspection Report (EIR) in July this year with a Voluntary Action Initiated (VAI) status.

Also Read: Pharmaceutical stocks make a comeback — but risks persist

Among other pending regulatory issues for the company, its Pithampur Unit 2 was issued a warning letter in November 2017, followed by six observations during the reinspection in January 2019. Lupin's Mandideep Unit 1 formulation + API unit is also under a warning letter from the USFDA since September 2019.

The management said that it remains committed to resolving the issues with the regulator expeditiously.

Lupin had reported weak results during the June quarter, dragged by a 30 percent sequential decline in its US business, whose sales came in at a multi-year low. The company's margins also fell to single digits during the quarter.

However, the street is estimating a sharp recovery for Lupin's US sales in the September quarter. Operating margin is also likely to improve this quarter due to the potential recovery in the US business along with cost-cutting measures.

Shares of Lupin are down nearly 30 percent this year and rank among the worst performers on the Nifty Pharma index.