Lupin shares fall 3% as USFDA warns of regulatory action

NEW DELHI: Shares of drug maker Lupin fell over 3 per cent in morning trade on Wednesday, a day after it said the US health regulator USFDA has cautioned that the firm's Pithampur facility may be subject to regulatory or administrative action.

USFDA warned the firm that it may withhold approval of any pending applications or supplements in which this facility is listed.

The company has received a letter from the US Food and Drug Administration (USFDA) classifying the inspection conducted at its Pithampur (Indore) Unit-2 facility in January 2019 as Official Action Indicated (OAI), Lupin said in a regulatory filing.

"The USFDA has stated that this facility may be subject to regulatory or administrative action and that it may withhold approval of any pending applications or supplements in which this facility is listed," it added.

The Mumbai-based drug maker, however, said it does not believe that the classification would have an impact on disruption of supplies or the existing revenues from operations of this facility.

Meanwhile, Morgan Stanley has upgraded Lupin to overweight from equal-weight and raised target price by nearly 40 per cent to Rs 1,094 from Rs 783. After a sharp fall in earnings and stock price over the past four years, Lupin now appears well positioned for recovery, said Morgan Stanley.

Shares of Lupin traded 1.59 per cent down at Rs 850.60 apiece on BSE around 9:45 am.

(With inputs from PTI)