Aurbindo Pharma Share Price Slips as US FDA Flags Telangana Unit

Aurbindo Pharma share price tumbled in trading on February 18 after the US Food and Drug Administration  reportedly flagged nine major observations at the company’s Unit 7 manufacturing facility in Telangana. The news rattled investors, sending the stock lower after a brief upward run in the past sessions.

Market Movement Today

On Wednesday, Aurbindo Pharma shares dropped to Rs 1,129.20, ending a two-day winning streak. The fall comes amid concerns about regulatory compliance at the company’s Telangana plant.

• 52-week low: Rs 1,010 (April 7 last year)
• 52-week high: Rs 1,278.60 (April 24 last year)
• Market capitalization: Rs 67,000 crore
• P/E ratio: 19.62

The dip highlights how sensitive pharmaceutical stocks can be to regulatory developments, especially from global authorities like the US FDA.

What the US FDA Found?

The inspection at Aurbindo Pharma’s Unit 7 reportedly revealed serious operational and safety issues. Key observations included:

• Equipment reportedly not cleaned for years, raising sanitation concerns.
• Cross contamination levels measured 380 times above allowed limits, with traces of E. Coli and bird droppings found.
• Staff reportedly had deletion access to raw data, with several unexplained trial runs.
• Instances of backdated microbiology documents were noted.
• A mismatch between electronic dissolution data and physical records was also identified.

These findings have raised concerns about quality control and compliance at the Telangana unit, prompting scrutiny from both regulators and the stock exchanges.

About Aurbindo Pharma

Aurbindo Pharma is one of India’s leading pharmaceutical companies, producing a wide range of generic drugs, APIs, and finished formulations. The Telangana unit plays a crucial role in supplying both domestic and international markets.

Over the past year, the company’s stock has shown significant movement:

• Recovered around 27% from its 52-week low to reach a high of Rs 1,278.60.
• Maintains a strong market capitalization of Rs 67,000 crore, reflecting investor confidence despite operational challenges.

Key Takeaways

The decline in Aurbindo Pharma share price today reflects the market’s sensitivity to regulatory inspections and compliance issues. Investors are closely monitoring the situation, with attention on how the company addresses the US FDA’s findings.

• Today’s fall interrupted a short rally in the stock.
• Regulatory compliance at Telangana Unit 7 is now a focal point for both investors and authorities.
• The stock’s strong fundamentals, including market cap and past recoveries, provide some context to its overall resilience.

In short, the recent US FDA observations have put Aurbindo Pharma in the spotlight. While the stock has bounced back from lows in the past, the current issues highlight the operational risks that can influence its performance in the stock market today.

Source: Moneycontrol