Cipla Shares Drop 5% But Trim Losses After USFDA Issues Warning Letter to Goa Unit

Goa: Cipla Ltd shares dropped over 5% in opening trade on Wednesday after the US health regulator issued a warning letter to the pharma company for its Goa manufacturing unit.

Cipla shares touched a low of Rs 401 apiece on Wednesday morning on BSE compared with their previous close of Rs 425.80, but later trimmed losses to trade 1.1% lower at Rs 421.10 by 10:31 am.

Notably, the stock has been trading in the negative zone for the last four sessions and have lost over 6% during the period. In a stock exchange notification on Wednesday morning, Cipla said that the company has received a warning letter from the US Food and Drug Administration (USFDA) for its formulations plant at Goa where inspection was conducted during 16-27 September 2019.

The warning letter reportedly said that the pharma company may continue to sell existing drugs from the Goa facility, but newer approvals will be held by the regulator if corrective measures are not taken.

The company said it remained committed to maintain the highest standards of compliance and will work closely with the agency to comprehensively address all the observations.

Last month, the drug maker had informed exchanges that that the USFDA had classified the inspection conducted at its Goa manufacturing facility as Official Action Indicated (OAI). The company had then said that it did not believe that it would have any material impact on the US business at this stage.

Meanwhile, the stock was in focus earlier this week when brokerage firm HDFC Securities had issued a ‘buy’ call on Cipla with a target price of Rs 495 per share.